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Maryland Lottery Agency negotiates way around ban on ‘freebies’ at casinos

Hollywood Casino Perryville

Maryland’s gaming growing pains could ease next month when the state gets its first taste of a staple of the casino industry — booze and a seat at the buffet, on the house.

The state’s gaming law prohibits casinos from handing out free drinks and food, or “comps,” but the Maryland Lottery Agency, working with Hollywood Casino Perryville, say they have negotiated a way around the ban.

“In talking with Penn National, they felt strongly that not addressing this issue could negatively impact their revenue,” lottery Director Stephen Martino said Tuesday. “We realize that people can go down the road and visit casinos in Pennsylvania, Delaware and West Virginia.”

Those alternate gaming destinations may be responsible for Perryville losing some of its new casino sheen as its revenue slumped in November, falling well below both October’s performance and state expectations.

But, starting next month, the casino owned by Penn National Gaming Inc. will allow gamblers to trade in points earned on their Club Hollywood cards for food. And those with the second-tier Celebrity cards will be able to use theirs for drinks and merchandise.

Gamblers earn points by playing the slots, Perryville marketing director Marc DeLeo explained. He would not disclose the dollars to points exchange rate.

“At the end of the day, the customers still go to Atlantic City, they still go to Pennsylvania casinos and Delaware Park,” he said. “They’re trained they get free drinks and comped food. They expect it.”

DeLeo said the casino has made other changes since opening with little notice on Sept. 27. Casino and state officials — the state owns the 1,500 slot machines there — stirred the slot mix on the gaming floor, adding more quarter and $1 machines at the expense of lower denominations.

And Penn National is planning a more aggressive marketing campaign in the new year, DeLeo said.

But those drink and food comps, he said “puts us on a level playing field. It gives them a reason not to drive the extra half hour to Delaware.”

The casino will need a boost, whether it comes from giveaways, promotions, the weather or the season, if it is to rebound from November. Its slot machines averaged $169 in revenue per day, far less than the $246 in October, but, perhaps more importantly, shy of the $210 the state expects.

“We had a really busy September and October, but then newness wears off a bit,” DeLeo said. “And I think it’s also the time of the year.”

Martino, too, urged caution.

“November and December tend to be down months for the casino industry as people start buying gifts, getting ready for the holidays, and they have fewer discretionary dollars,” he said.

Martino said he wants to watch the revenue figures come in at least through March before reading into the trend.

Nearby, Pennsylvania’s casinos have also slumped in the holiday months, though not as severely as the dip in Perryville. In each of the last four years, wagering declined in both November and December in Pennsylvania. This year, gamblers wagered $2.29 billion in slot machines there, 8 percent less than was bet in October, the largest such decline since the state legalized gambling.

Pennsylvania, however, has also shown a consistent bounce leaving the holiday season, recording wagering increases every January. The first month of 2010 saw the largest bump — 16.8 percent — top $2.47 billion wagered.