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Maryland casino revenue up slightly in May

On the eve of the opening of Maryland’s third casino, the state said Tuesday that the two existing slots parlors pulled in more than $14.55 million in May, a slight increase from April’s $14.54 million revenue total and a marked increase over the corresponding month last year.

The total was still less than the two facilities generated in February and March 2012.

The modest month-to-month gain was due to a small increase in revenue at the Casino at Ocean Downs in Worcester County, which enjoyed its best month since September 2011. The casino generated almost $4.5 million in May, about $700,000 more than April’s $3.8 million total. The casino’s revenue also jumped 21 percent from May 2011.

Stephen L. Martino, director of the Maryland State Lottery Agency, said Ocean Downs was gaining trust from area residents, which are starting to see the 800-slot facility as an “active participant in the business community.”

“I think that they’re doing more aggressive marketing in the community, and that is paying some dividends,” Martino said. “I think that facility has probably had to introduce itself to the community and prove it is a good neighbor.”

He also said Ocean Downs should see its revenue increase over the next several months as the busy season for tourism begins.

“I think the challenge at Ocean Downs, quite frankly, is it looks like the valley is a little deeper and longer than the peak is higher and longer,” Martino said. “The peak really starts in May and June. July and August are going to be their best months.”

Casino management did not respond to a request for comment.

The increase in revenue at Ocean Downs was offset by a decrease at the 1,500-machine Hollywood Casino Perryville, which generated about $600,000 less than it did in April. Still, the facility’s $10.1 million in May revenue represents a 5 percent increase over May 2011.

“I think what we tend to focus on is … the year-over-year number,” Martino said. “I think [that is] the best comparative metric for us.”

The drop at Perryville, though, comes just before Martino said he expects the casino to experience a 20 to 25 percent reduction in revenue as excitement over the Wednesday night opening of the Maryland Live! casino next to the Arundel Mills mall in Hanover drives would-be Cecil County gamblers to Anne Arundel County. How long the dip will last is uncertain, Martino said.

James Karmel, a gambling analyst and history professor at Harford Community College, said he would be surprised if Maryland Live! caused any dip at all.

“I think Hollywood Perryville is competing mainly with the Delaware and Pennsylvania casinos,” Karmel said. “I don’t think Maryland Live! will cut into it a lot.”

Also uncertain is how much revenue Maryland Live! will generate in its first month of operation — though Martino admitted the number would likely be an aberration. New casinos tend to open strong, he said, before stabilizing.

“I don’t think anyone is really going to know until Maryland Live! opens,” Martino said.

With one month left in fiscal 2012, the state’s slots have generated $153.7 million, with $74.5 million going to the Education Trust Fund. Casino operators have kept $50.7 million and the horse racing purse account has received about $10.8 million.

Legislation passed by the General Assembly in a 2007 special session and ratified by Maryland voters in 2008 projected slot machines would gross more than $1 billion this fiscal year.

But those projections were based on the assumption that each of the state’s five casinos would be operating by 2011. The Maryland Live! casino will be the state’s third — and largest — facility, with 3,200 slot machines initially and another 1,550 set to be installed by the fall. The casino’s 4,750 slot machines will give it the sixth-most electronic gambling games in any facility in the country.

A license has been awarded for a casino at Rocky Gap Lodge and Golf Resort in Allegany County, and a Caesars Entertainment Corp.-led group bidding on the license for a Baltimore casino could be awarded this month.