Maryland lottery, casinos combine to pay $929.74 million to state

Maryland's lottery and casino industries generated $929.74 million for the state during the last fiscal year, the regulatory body that monitors both announced Wednesday.

Traditional lottery sales decreased 2.2 percent, the Maryland Lottery and Gaming Control Agency reported, but gains from four casinos contributed to a total increase of 35.1 percent over what the state received during the previous fiscal year.

"We fully expected the lottery number to drop given the increased access for our consumers to casinos," the agency's director, Stephen Martino, said. "It's our job to get the lottery numbers back up, certainly, but overall, we're happy with the increase in how much the state of Maryland received."

Money earned from the lottery — $545.2 million during the period that ended in June — goes to the state's general fund. Though lottery revenue for the state fell only $200,000 short of reaching Board of Revenue Estimates projections, Martino has commissioned a study to pinpoint the cause of the slip.

"We've got some work to do in addressing the decline in the traditional lottery," he said. "I think the study will show us why it has happened, maybe confirm that it has been a result of the casinos and help us come up with a plan for changing the trend."

Lottery revenue did not drop in Pennsylvania when the state introduced casinos in 2007, said David Schwartz, director of the University of Nevada-Las Vegas' Center for Gaming Research, but it did level off for several years.

"It was pretty static until 2011, when the economy started coming back," he said. "It's difficult to tell if that was purely because of casinos, but you could certainly see how that would be the case."

Martino said sales figures for stores nearest the state's largest casino, Maryland Live in Hanover, fell more than at other places in the state. With casinos slated to open in Baltimore in 2014 and Prince George's County as early as 2016, traditional lottery products like scratch-off tickets and video Keno may continue to see slower sales, he said.

"At the end of the day, it may shake out that this is the new normal," Martino said. "We may find that there's been a permanent cannibalization of the traditional lottery by casinos."

The state's casinos generated more than $608.3 million — $76.8 million more than projected — including $284.3 million paid to the education trust fund meant to support early childhood, elementary and secondary education and fund school construction and capital improvement projects across the state.

About $39.1 million went toward bolstering horse racing purses in the state, and $10.8 million was set aside for racetrack improvements. Casino money also went toward local impact grants ($30.7 million) the gaming control agency ($11.2 million) and to support small, minority- and women-owned businesses ($8.4 million).

Maryland Live opened less than a month before the beginning of the 2013 fiscal year, while the casino at Rocky Gap in Allegany County opened near the end of it. Three casinos also began offering table games, made legal by the passing of Question 7 in the November election, during that period.

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