Editorial: Slots one year later
Posted: 5:13 pm Thu, October 6, 2011
A year after Maryland won the dubious distinction of becoming the latest state to enter the quest for a huge financial windfall in the form of slot machine revenue, the early results are mixed at best.
True, Maryland gathered $88 million in slots income from the casinos at Perryville and Ocean Downs that it would not have had otherwise. That is certainly welcome, especially at a time of fiscal distress, but hardly a difference-maker.
In fact, total revenues are less than 60 percent of original forecasts.
The state expected Perryville, the larger of the two casinos that are operating, to generate about $16 million a month in revenue, of which the state would take nearly $11 million. Instead, total revenue has averaged $9 million, with Maryland’s share about $6 million.
A big reason for that discrepancy is that Perryville has 1,500 slot machines, 1,000 fewer than the number of machines allowed by law and the number on which the state revenue estimates were based.
Meanwhile, the competitive landscape has changed dramatically. When Maryland decided to cast its lot with slots, none of the surrounding states with lotteries were offering table games. Today, there are more than 1,000 table game options in West Virginia, Delaware and Pennsylvania.
And that’s just outside the state. Competition inside Maryland will get dramatically tougher next year when the first phase of Maryland Live! Casino opens in June. By year’s end, it is scheduled to be fully operational with 4,750 slot machines, which already has Perryville casino executives worried.
Meanwhile, progress on finding bidders for the licenses at Rocky Gap Lodge and Resort and in the city of Baltimore has been excruciatingly slow. But the latest round of bidding has produced stronger applicants, and the state hopes to make decisions on both fronts early next year.
Another decision looming is whether to allow table games. This will be on the legislature’s agenda in January and if approved then, would be on the ballot in November because it requires a constitutional amendment.
The vote here on table games is a reluctant yes. With as much time and money as we have already invested in the frantic competition among states for gambling revenue, we can’t afford to fall further behind.