Hollywood Casino Perryville has made $35.3 million since its September opening, but the town of Perryville itself hasn’t seen a dime.
According to state law, 5.5 percent of the gross gaming revenues from Maryland’s casinos goes to local governments. But how — and when — that money gets from the state to towns like Perryville has been an issue. And in Cecil County’s case, the state law leaves it to the local jurisdictions to decide on how to split the money. But the law isn’t the same for all the state’s casinos.
Perryville has spent about $500,000 of its $4.5 million operating budget to move a public works facility closer to Maryland’s first casino, said Mayor James Eberhardt. Projects surrounding the casino, as well as increased police and fire department services, have put a strain on Perryville’s finances, he said.
But the mayor says he hasn’t seen any money to make improvements.
“They want me to spend more money and resources on working on signage so the casino can get more revenue, when I haven’t seen any of that revenue,” Eberhardt said. “But we’re constantly dealing with the impacts on our staff from the casino.”
As part of the state law, Cecil County had to create a council that approves and makes recommendations on how its money will be spent. The council has 45 days to approve plans submitted by the town and the county, but it hasn’t met since its formation in September.
In 2009, Cecil County and Perryville worked out an agreement on how to split their share of the casino money, with the county getting 65 percent and the town getting 35 percent. So, of the nearly $1.2 million that Cecil County is due from casino revenues since September, a little more than $406,000 is supposed to go to Perryville, said County Budget Manager Craig W. Whiteford.
While Perryville has created and submitted its plan, the county has yet to create its plan for what to do with the revenue, said Vernon Thompson, executive director for Cecil County Office of Economic Development.
Slow coming in
On top of that, the casino money Cecil County is owed has been slow in coming. The state law doesn’t indicate how often the Department of Labor, Licensing and Regulation is to dispense that money, and Cecil County hasn’t received a payment for any revenue past November.
“Admittedly, everyone’s learning on the fly,” Whiteford said. “They never told us when we’re supposed to get the money.”
The Maryland Lottery Agency collects money from the casinos daily. Once the casino account is audited by the agency, the money is transferred to the Maryland Racing Commission, which is under the authority of DLLR. The racing commission then transfers the money to the different parties.
Lottery Director Stephen Martino, the state’s top gaming regulator, said his agency does not oversee the transfers after the Department of Labor, Licensing and Regulation receives the money.
“To my knowledge, distributions are being made in accordance with the law,” Martino said.
Whiteford said that since the casino opened, the county has received three payments: once in mid-October, and once each during the first weeks of November and December.
J. Michael Hopkins, the racing commission’s executive director, said January’s snowstorms delayed payments to the county, and wire transfers to county accounts take a week and a half. Hopkins said he transferred December’s revenue to the county’s account last week, and that he initiated payment for January’s revenue Monday.
Whiteford said the county’s budget department has not seen any notification of impending wire transfers or unapplied funding on the way. Between December and January, Cecil County was due $783,983.
Worcester County, home to the Casino at Ocean Downs, which opened Jan. 4, has not yet provided bank account information to the racing commission. The county is to receive $166,948 for its first month of revenue.
Nature of the beast
“When there are hiccups, there’s always a delay,” Hopkins said. “That’s just the nature of the beast when you start transferring money from one account to the next.”
Cecil County is waiting for its new fiscal year on July 1 to spend its money, Thompson said. But Eberhardt said Perryville can’t afford to wait until then to replenish its operating fund. The development council was scheduled to meet with Perryville officials and the public in November, but had to reschedule. The council was scheduled to have a public hearing Thursday night, but has already rescheduled twice this month, the mayor said.
Cecil County head commissioner James T. Mullin did not return messages seeking comment.
“The [state] law is flawed, in my opinion,” said Thompson, of the Cecil County economic development office. “It doesn’t address a number of topics about funding and the local [Video Lottery Terminal] development council.”
Thompson said he consults with the 15-member council but is not part of it. The county’s biggest concern is making sure the money is used appropriately, since the law says the money can be spent in six broad categories, Thompson said: infrastructure improvements, facilities, public safety, sanitation, economic and community development, including housing, and other public services and improvements.
The council includes four business members, seven resident members, three legislators, and one executive from Penn National Gaming, which owns the casino. The business members are Mary Martin, George Coudon, Eric Grubb and Carol Brown. Residential members are George Patchell, Kevin Morton, Dale DeWeese, Bob Amato, Sarah Colenda, John Reinhart and Ann Jackson. Himbert Sinopoli, vice president and general manager of Hollywood Casino Perryville, is the designated Penn National member. Harford County Sen. Nancy Jacobs, Harford Del. Mary-Dulany James and Cecil Del. David Rudolph also serve on the committee.
The council is co-chaired by Patchell and Rudolph.
“I’m not in charge of setting up the meeting times,” Sinopoli said. “But I can appreciate where the mayor’s coming from to get those funds and start extending them. I personally hope that when the commission meets it will move quickly on this. We need to be getting this approved as quickly as possible.”
Martin, who owns an antique shop in Perryville, said she didn’t know what to expect during the council’s first official meeting. Members of the council said it hasn’t met because of snowstorms in January and damage done to the meeting venue at Perryville Outlet Center.
The council’s co-chair, Patchell, said the law gives no guidelines to the council on how to review the plans or what it should be looking for when approving plans.
“You don’t want to say [the council] is pointless, but there’s not a lot of teeth in it,” said Patchell, executive director of YMCA of Cecil County Inc. “We really have no authority.”
Jacobs, James and Rudolph did not respond to multiple requests for comment.
Different at Ocean Downs
The state law is different for the Casino at Ocean Downs. Where the money will go — and the exact percentages — are spelled out. Legislators wanted to ensure communities around the casino would not be negatively affected without some form of compensation.
From the money that goes to local grants from Ocean Downs, 60 percent goes to Worcester County, 20 percent to Ocean City, 10 percent to the town of Berlin and 10 percent to the Ocean Pines Association. Worcester County also has to create a local development council to make recommendations on the use of the money, but the towns are expected to get their money even without a plan. The council has been appointed, but it has yet to meet.
Anthony J. Carson Jr., Berlin town administrator, said his town plans to use its money on increased police department services and other first-responder services. Berlin, the town in which the casino is located, has set up a separate account for the casino revenue.
“We want to let the money build,” Carson said. “We want to be able to use this for larger projects rather than an ongoing basis, since the language is kind of broad on how we can use it.”
For a casino in Allegany County, local impact grants would be used for services throughout the county, and to pay down debt incurred by the county in the construction and related costs for the golf course and lodge at Rocky Gap.
State law that would apply to Maryland Live! Casino at Arundel Mills mall, which is to open a temporary facility by the end of this year, has no specified percentages for local impact grants.
Thompson, the county economic development director, said he doubted Cecil County officials and legislators would consider trying to have the law’s language amended to clarify it any time soon.
“I’ve had the same question repeatedly over the last year,” Thompson said. “But some don’t want to open the subject again because of new locations, table games, the things that might come up. But I think the cat’s out of the bag.”