Public hearings on Prince George’s casino slated for fall

State regulators still expect to award a casino license to one of three applicants to operate a casino in Prince George’s County, and the schedule for that process is starting to materialize.

The Maryland State Lottery and Gaming Control Agency is currently conducting background investigations into all three applicants — MGM National Harbor LLC (led by MGM Resorts International Inc.), Maryland Casino LLC (led by Greenwood Racing Inc.) and Prince George’s Racing Ventures LLC (led by Penn National Gaming Inc.) — and those investigations are expected to be finished in September.

After that, members of Video Lottery Facility Location Commission will visit all three potential sites — including National Harbor, an empty lot in Fort Washington and Rosecroft Raceway — and then hold public hearings on each proposal in late September or October. The final decision will be made in December.

MGM Resorts has proposed a resort casino with 3,600 slot machines and 140 table games to be built at the sprawling National Harbor mini-city near Oxon Hill. Penn National has proposed building a casino at Rosecroft Raceway that includes 140 table games and “at least” 3,000 slot machines — though the company only paid an initial license fee to cover 500 slots.

The surprise bidder was Greenwood Racing Inc., the owner of Parx Casino near Philadelphia. That company has proposed building a resort casino near the intersection of Indian Head Highway and Old Fort Road in Fort Washington with 4,750 slots and 170 table games.

Gambling proponents’ campaign account surpasses opponents’

Proponents of expanded gambling have for the first time moved ahead of opponents — at least when measured by the size of their campaign accounts.

MGM Resorts International Inc., which wants to build a resort casino at National Harbor in Prince George’s County, pumped another $3 million into a ballot issue committee supporting Maryland’s expanded gambling voter referendum, Question 7.

MGM has spent $17.4 million to support the construction of a Prince George’s County casino and the legalization of table games at every Maryland gambling site.

CBAC Gaming LLC, the Baltimore casino licensee led by Caesars Entertainment Corp., National Harbor developer The Peterson Cos. and apartment developer Bozzuto & Associates Inc. have combined to pump $22.1 million into For Maryland Jobs and Schools Inc., which has spent $17.8 million of that money on pro-referendum advertising.

Bozzuto joined the fray Thursday with a $10,000 contribution.

Penn National Gaming Inc., the only company opposing an expansion of Maryland’s casino gambling program, has given $21.6 million to its ballot issue committee, Get the Facts – Vote No on 7. The committee has spent just over $18 million of that money.

Each side is protecting its business interests. MGM wants to develop prime real estate at National Harbor and Caesars wants to be able to offer table games such as blackjack and poker at a future Harrah’s Baltimore casino on Russell Street.

Penn National, believes it won’t be given a fair chance to build a casino at Rosecroft Raceway in Prince George’s County and fears a facility at National Harbor would financially damage Hollywood Casino at Charles Town Races in West Virginia.

‘Special session fatigue’ sets in for state lawmakers

House Minority Leader Anthony J. O'Donnell, R-Calvert and St. Mary's

Persistent bullying by the General Assembly’s Democratic super-majority hasn’t stripped a sense of humor from the House of Delegates’ Republican leader.

Addressing the media hours after the Supreme Court delivered its ruling on the Affordable Care Act Thursday, Minority Leader Anthony J. O’Donnell began a press conference by thanking reporters for meeting with him “on the eve of the special session.”

It seems talk in Annapolis has centered on one special legislative session or another since lawmakers failed to pass a complete budget package on the final day of the regular session in early April.

One special session was held in May to pass the two bills that didn’t make it, and Gov. Martin O’Malley is mulling calling another session to expand the state-run gambling program.

So, excuse O’Donnell for poking fun. Jokes aside, the minority and majority leaders’ feelings on another special session are — perhaps astonishingly — not so different.

House Majority Leader Kumar P. Barve, D-Montgomery

“We’ve had so many special sessions since [former Gov. Robert L.] Ehrlich [was] governor, there’s nothing really special about them anymore,” said Majority Leader Kumar P. Barve, a Montgomery County Democrat. “Putting aside the merits of the argument themselves, I think a lot of people are suffering from special session fatigue.”

Plenty of reasons for why a special session is  opposed by House members were articulated in Friday’s paper.

But Barve thinks lawmakers have simply lost interest, too.

“I think if you could have assurance that it’s going to be on this day, we’re going to have a super-majority [vote] to hear a bill twice in one day, and be in and out in one day, two days at max, people would be able to deal with that … I think people would say let’s get it over with.”

But, for the many reasons articulated in Friday’s paper, a deal that might allow such a swift pace is improbable, at best, he said.

“Let’s say, for the sake of argument, we call ourselves in on [Monday, July 9], and they didn’t have anything done by Tuesday,” Barve said. “You’d see a very high attrition rate by Thursday.”

For now, the chances of a special session appear remote. But before leaving Annapolis, O’Donnell couldn’t help but get one more jab at an O’Malley priority after playfully asked to talk about a special session.

“OK, the special session will start tomorrow,” O’Donnell said. “We’ll be raising gas taxes.”

Baltimore lawmaker says city casino can compete with Maryland Live!

At the glitzy opening of the Maryland Live! casino at Arundel Mills, a Baltimore legislator said a future city casino would be able to compete with Hanover’s mega-facility.

Del. Keith E. Haynes said Maryland Live! — about 11 miles south of a facility that could be built on Russell Street near M&T Bank Stadium — should serve as encouragement for a future licensee to build a casino in Baltimore of the highest quality.

CBAC Gaming LLC — a group led by Caesars Entertainment Corp. — could be granted a slots license by the state’s Video Lottery Terminal Location Commission this month. The group wants to build a Harrah’s Casino with 3,750 slot machines.

If Caesars wins, Haynes said they don’t have to look far to see the new standard set by the casino at Arundel Mills mall, which doubled the number of slot machines in the state when it opened Wednesday.

“We’re anxiously waiting to get up,” he said. “We were looking at the higher end” of casinos even before The Cordish Cos.‘ facility opened.

Haynes said he was still unsure about voting for legislation that could allow the state’s sixth casino to be built at National Harbor in Prince George’s County. He said members of the city delegation were anxiously waiting for the recommendation of a work group that is studying what impact the casino — coupled with the legalization of tables games — would have on other state facilities.

“There was a concern, I think, in the delegation, because we’re not up and running,” he said. “We are waiting to see. This time around, what you have is another level of knowledge. I think that will be helpful.”

Haynes said a Baltimore casino would probably do well regardless, because it would be located in a “large, vibrant city” with year-round professional sports and the Inner Harbor giving casino-goers quick options they don’t have at Arundel Mills and wouldn’t have at National Harbor.

National Harbor group couldn’t build a billion-dollar casino

National Harbor in Prince George's County

Advocates for a National Harbor casino said the state wouldn’t be able to lower taxes enough for a billion-dollar facility to be built on the Potomac shore.

Andrew Moody, principal of Business Research & Economic Advisors, said a $750 million casino at the sprawling Prince George’s County development could be possible if slots were taxed at a 52 percent rate and table games were taxed at a 10 percent rate.

Senate President Thomas V. Mike Miller Jr., D-Calvert and Prince George’s, and Prince George’s County Executive Rushern L. Baker III (D), have both talked of a billion-dollar resort casino being built at National Harbor. But Moody, who also completed a study for Prince George’s County during the regular legislative session, said the state’s effective tax rate would have to be a cumulative 32 percent for a developer to invest $1 billion into a casino.

Even with a smaller casino — with 3,000 slot machines and table games — Moody estimated the facility could gross $700 million annually.

Moody also estimated that by lowering the state’s 67 percent tax rate on slot machines and adding table games to accommodate a National Harbor facility, the state’s five other casinos would actually see their net take increase, despite a loss of gross revenue caused by whatever market share a new casino would take.

But Joseph Weinberg, president of gaming for Maryland Live! developer The Cordish Cos., called the National Harbor data “propaganda.” Weinberg and David Cordish, chairman of The Cordish Cos., estimated a National Harbor casino would reduce revenue at Maryland Live! by 40 percent.

Gary Loveman, CEO of Caesars Entertainment Corp., the lone bidder on a Baltimore slots license, agreed that some business would be taken away from Maryland Live! and the Harrah’s casino Loveman would like to build on Russell Street. But, if the state lowers the tax rate on slots and adding table games, he said his casino would be in a stronger position to attract players from out of state.

A soon-to-be completed study by PricewaterhouseCoopers, commissioned by the state, is slated to be discussed at the June 12 meeting of work group formed to study an expansion of gambling in Maryland.

Cordish: Maryland Live! won’t hurt Hollywood Casino for long

David Cordish at The Cordish Cos. office in Baltimore. (Photo: Maximilian Franz)

A few items didn’t make it into today’s story about what developer David Cordish called an oversaturated casino market in Maryland.

Stephen L. Martino, director of the Maryland State Lottery Agency, said casino business is already starting to overlap. When Maryland Live! opens on June 6, Martino said business at Hollywood Casino Perryville is expected to lapse by 20 to 25 percent.

But Cordish doesn’t think the problem at Perryville will be a permanent one.

“I would be very surprised if, after the first three months, we have had a significant impact on Perryville,” Cordish said. During its first three months, a casino is going to attract lots of customers because it is new, he said, but eventually that levels off and stabilizes.

Cordish opposes the construction of a casino in Prince George’s County — something the legislature could discuss in a July special session — in part because it would hurt the market for his casino.

He said it’s important to give a casino time to develop a loyal customer base, an assertion backed by James Karmel, a gambling analyst and history professor at Harford Community College.

Karmel said much of the casino industry is built on establishing a loyal customer base and that process would be interrupted at Maryland Live! and at a proposed Baltimore casino if another facility was built at National Harbor before those casinos had time to settle in.

“I do think that’s a problem, especially when you add another [casino] without allowing the first two to build up a customer base,” Karmel said. “You want to give time to build up that customer base, maybe before introducing another option in the market.”

O’Malley names gambling expansion work group

A special legislative session to expand gambling in Maryland could take place the week of July 9 if an 11-member work group recommends convening such a session.

Gov. Martin O’Malley named the work group Monday evening, less than a week after he told reporters he expected to call a second special session of the General Assembly, where lawmakers would consider creating a sixth state slots license for use in Prince George’s County and adding table games to existing Maryland casinos.

John Morton III, a former Bank of America executive and current chairman of the Maryland Stadium Authority, will lead the work group, which includes six legislators, two members of O’Malley’s cabinet and a pair of administration staff members but no private-sector gambling experts.

“It became evident in the 2012 legislative session that the issue of gaming should be examined in more detail,” O’Malley said in a statement. “We are pleased to announce the members of this work group to consider the issue of gaming in our State. We are confident that their expertise and guidance will help us move toward consensus on this issue.”

Other members of the work group are:

  • Matthew Gallagher, O’Malley’s chief of staff
  • T. Eloise Foster, secretary of the Department of Budget and Management
  • Jeanne Hitchcock, secretary of Appointments
  • Joseph Bryce, Senior Policy and Legislative Advisor
  • Sen. Edward Kasemeyer, chair of the Budget and Taxation Committee
  • Sen. Nathaniel McFadden, vice chair of the Budget and Taxation Committee
  • Sen. Richard Madaleno, chair of education, business & administration subcommittee
  • Del. Sheila Hixson, chair of Ways and Means Committee
  • Del. Peter Hammen, chair of Health and Government Operations Committee
  • Del. Frank Turner, chair of finance resources subcommittee

The group intends to meet three times. The first meeting is scheduled for June 1.

Maryland Live! may hurt Hollywood Casino’s take

When the Maryland Live! casino opens at Arundel Mills mall on June 6, the state’s biggest gambling facility will be on line.

But that facility is likely to take a big chunk out of Hollywood Casino‘s business in Perryville.

Stephen L. Martino, director of the Maryland State Lottery Agency, said that Maryland Live! could take more than 20 percent of Perryville’s business. He couldn’t predict how long that slump would last.

“We expect Perryville’s numbers to go down,” Martino said. “I think the question is, we don’t know how long that’s going to last. I would expect an initial decline in the 20-to-25 percent range as new competition comes on line. Then we’ll have to see.”

The Perryville casino generated $10.7 million in revenue in April, according to numbers just released by the lottery agency. A 25 percent hit would reduce that total to just over $8 million.

Martino said the lottery agency expected the casino at Arundel Mills would have a greater impact on Hollywood Casino than at Worcester County’s Casino at Ocean Downs in Berlin.

Debate in the General Assembly over a potential sixth state casino — in Prince George’s County, likely at the sprawling National Harbor development — centered on how much, if any, business such a facility would take from Maryland Live! and a casino that could be built in downtown Baltimore.

The facility at Ocean Downs and a future casino at Rocky Gap State Park are considered to be far enough away from other facilities to not significantly feel the impact of the others, which all sit just off Interstate 95 up and down the central portion of the state.

Prince George’s casino would compete with Arundel Mills, Baker says

Rushern L. Baker III (Photo: Maryland State Archives)

Prince George’s County Executive Rushern L. Baker III said a billion-dollar casino at sprawling National Harbor would take some business away from the Maryland Live! facility at Arundel Mills mall but would “complement” a downtown Baltimore casino.

Baker made the comments Tuesday as a guest on Midday with Dan Rodricks on WYPR. A casino on the banks of the Potomac would draw “people from all over the world,” he said, and was far enough south to not bother a Baltimore facility.

“Will we pull some away from Arundel Mills? Sure,” Baker said. But most of the business in Prince George’s would likely come from visitors to the District, or residents of Northern Virginia, he said.

He also said developer David S. Cordish who has opposed a National Harbor casino and is is building the Anne Arundel facility, should have known additional slots licenses could be created by the state.

Baker, who just recently completed his first year in office, said a facility at National Harbor would be twice the size of the $500 million Arundel Mills facility.

“It will be much bigger … it’s a billion-dollar development,” Baker said. “Our base is what you see in Las Vegas.”

A bill that would have allowed the facility to be built at National Harbor — pending a fall voter referendum — failed in the waning hours of the 2012 General Assembly. The legislation would have created a sixth state slots license, for Prince George’s County, and allowed table games, like black jack, in all state gambling facilities.

It’s likely a special legislative session will be called in August for lawmakers to revisit the proposal. If approved, the casino would be built in 2016, Baker said, per an agreement Prince George’s County lawmakers made with the Baltimore City delegation in Annapolis.

Baker, who said he does not gamble and voted against slots when he was a member of the Maryland House of Delegates, changed his tune when his office studied the issue and decided a casino at National Harbor could raise $69 million for the county.

The county executive joked that he made Senate President Thomas V. Mike Miller Jr. mad when he did not immediately support the casino. But the study convinced Baker that the facility would be beneficial.

“It would make Maryland and Prince George’s County competitive in the Washington region,” Baker said.

Slots commission eyes late-April decision on Rocky Gap license and other gambling news

The state slots commission could decide on the licensee for the state’s fourth slots parlor this month.

The Video Lottery Terminal Location Commission will meet April 26, and could make a decision on the license for a slots parlor at Rocky Gap Lodge and Golf Resort at that time.

A major hurdle was cleared last week when the Allegany County commissioners came to agreement on a payment in lieu of taxes with Evitts Resort LLC, the lone bidder for the license. Because the resort is in Rocky Gap State Park, the county cannot collect property taxes from tenants. The agreement calls for Evitts to pay the county the equivalent of what property taxes for the site would be.

All that remains is the completion of a lease agreement between Evitts, the Maryland Economic Development Corp., which owns the resort and the Maryland Department of Natural Resource, which owns Rocky Gap State Park.

Donald C. Fry, chairman of the slots commission, said he expected that lease agreement to be completed in the next week.

“I’d still believe we’re in a position to make a decision on Rocky Gap by the end of this month,” Fry said. “I think the Allegany County commissioners, them moving forward, is a significant step.

“We need to make sure the lease is ready to go. But you’ve got a lot of different players. We’re down to a couple of issues.”

The award for a Baltimore facility could take a bit longer, Fry said, though he expected the commission would make a decision on that license before the end of June. The Maryland State Lottery Agency is still working on its background check of a group led by Caesars Entertainment.

“My target date is still the end of the fiscal year,” Fry said.

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