ANNAPOLIS — Maryland’s gambling market can absorb a sixth casino — and already-approved facilities will make more money — if the state also legalizes table games, according to a joint study by state fiscal analysts and PricewaterhouseCoopers.
A casino at National Harbor in Prince George’s County with 3,000 slot machines and table games would generate $460.7 million in gross revenue for the state annually, the study said. Combined with the five already-approved casinos, overall casino revenue would increase $246.1 million, to almost $1.6 billion.
The study was presented Tuesday by the state Department of Legislative Services and PricewaterhouseCoopers at the second meeting of Gov. Martin O’Malley’s work group considering expanded gambling.
Warren G. Deschenaux, director of the state Office of Policy Analysis, said analysts could not be certain, though, that their projections would be spot-on because of multiple variables, including whether the state chooses to alter its tax on slot machines.
But even with that uncertainty, Deschenaux said the state should pull in at least an extra $100 million annually if the sixth casino and table games are authorized.
Further complicating the analysis, he said, was that the study was conducted in “a kind of peculiar environment.”
“We are estimating revenues for three facilities, only one of which has been open,” Deschenaux said.
Joseph Weinberg, managing partner and president of gaming for Maryland Live casino developer The Cordish Cos., said that made the study deeply flawed.
“What you’re seeing is an admission that every number presented is uncertain,” Weinberg said. “You must get the existing facilities up and running and get actual data. That is the only way to know.”
Weinberg said it would be wise for the work group to recommend the legalization of table games, which the joint study determined could draw an additional $50 million annually if allowed at the five authorized casinos. Weinberg said there was little risk in legalizing the games, like blackjack and roulette, and called it a “slam-dunk guarantee” revenue generator.
Meanwhile, Milton V. Peterson, chairman of The Peterson Cos., which owns National Harbor, said the state underestimates how much revenue a casino at the sprawling development could generate. He said gross revenues should top $740 million annually, almost $300 million more than the state’s projections.
Peterson, confident the state was realizing the profitability of his plan, said he might name a potential operator for the casino as early as Thursday.
“We ain’t gonna denigrate what we built by building a … slots barn,” Peterson said, adding that the facility would be “high class” and include a hotel and other amenities. He said the casino’s location, on the banks of the Potomac River, would generate far more revenue than the state’s largest casino, Maryland Live at Arundel Mills mall.
“Arundel Mills is behind a shopping center, next to a Burlington Coat Factory,” Peterson said.
The study indicated that slots revenue would decrease at Maryland Live and at a proposed casino on Russell Street in Baltimore if a casino were built at National Harbor. But, when combined with the additional revenue generated from table games, Maryland Live would see a 19.5 percent increase in owner revenue and Baltimore would see a 30.3 percent increase.
The state would receive $161 million in additional revenue each year from the six casinos, the study said, with $97 million of that additional revenue going to Education Trust Fund.
The revenue figures are based on the state’s existing slots tax rate — 67 percent — and a 20 percent tax on table games.
Maryland could also save about $133 million by fiscal 2016 by shifting the purchasing of slot machines to licensees, but operators would likely ask for a reduction in the tax rate in order to absorb that cost.
The savings are important because the state is spending more on its slots program than it is making, partially because the full arsenal of authorized slot machines are not installed. About 14 percent of slots allocations to the Education Trust Fund and elsewhere are being subsidized by General Fund revenue, the study said.
John W. Morton III, chairman of the work group, said the group would decide between now and June 20 “how do we put all of this together.” He said if the group reached consensus on a plan to expand gambling, it would recommend that Gov. Martin O’Malley call a special legislative session. The governor has said that session would begin the week of July 9.
Despite results that appear to favor expanded gambling, Weinberg said he did not feel like a National Harbor casino was a done deal. He cited apparent skepticism expressed by some members of the work group, who were concerned about the hypothetical numbers on which the study depended.
“I think there’s a very serious debate here,” Weinberg said.