Please ensure Javascript is enabled for purposes of website accessibility

Odds stacked against Perryville casino

The operator of Maryland’s first casino is betting that a sharp decline in its June revenue will be short-lived, but odds are the road ahead will be rough for Hollywood Casino Perryville.

The opening of Maryland’s largest casino, Maryland Live at Arundel Mills mall in Hanover, accounted for the lion’s share of a record month for the state’s embattled gambling program.

But June’s revenues — which jumped to $40.8 million from $14.55 million in May, a 180 percent increase — can be wholly attributed to Maryland Live, as business fell month-over-month at the state’s two already-operating casinos in Perryville and Berlin.

Karen Bailey, a spokeswoman for Hollywood operator Penn National Gaming Inc., said the casino just off Interstate 95 in Cecil County saw its business drop 20 percent the day Maryland Live opened. That trend has continued.

“We expected such an impact to our property as a result of the Anne Arundel casino and eventually the Baltimore location,” Bailey said Tuesday, the day the results were released. “We will continue to monitor and manage the impacts to the property as our markets stabilize and mature.”

Bailey did not know how long that would take.

“Everything we and the state have dealt with to date is based on projections,” she said. “Now, we’re able to understand and react to actual impacts.”

Maryland Live’s 3,171 slot machines generated $28.5 million in June, more than Hollywood Casino Perryville and The Casino at Ocean Downs have ever combined to generate.

Hollywood, which has 1,500 slot machines, saw its revenue decrease more than 21 percent from May to June and 9.8 percent year-over-year.

Stephen L. Martino, director of the Maryland State Lottery Agency, said the lottery couldn’t be sure when, or if, Perryville’s casino would rebound.

“It was something that we expected. … That doesn’t make it any easier to take when it happens,” Martino said. “We need to look at where things are at over a couple of months. … I think that the decrease at Perryville is almost entirely attributable to Maryland Live opening.”

Martino said casino-goers may return to their old patterns once the excitement of Maryland Live’s opening dies down. But with the casino set to add a live entertainment venue, 1,500 more slot machines and The Prime Rib restaurant between now and October, Martino said the excitement could continue through the fall.

“Over the number of months they’re going to keep adding things,” Martino said. “That’s going to continue, I think, to encourage and entice” customers.

Overall, Maryland Live’s success is good for the state, Martino said, so he and his agency are pleased.

“I think, with these numbers, we begin to see the casino program fulfill the promise people in the state had hoped it would be,” Martino said. “The casino’s busy. It’s been busy since it opened, and that’s clearly reflected.”

The Casino at Ocean Downs also saw its revenue decrease from May to June, but the 800-slot facility on the Eastern Shore actually posted a 16 percent gain over June 2011.

“Ocean Downs is remote enough from [Maryland Live], it’s not really in their trade area,” Martino said. “They’re not, obviously, advertising as competitively against Maryland Live or really chasing the same numbers. Ocean Downs does a good job in the summer when there’s increased tourism activity.”

Maryland Live is by far the state’s largest casino — and it will get bigger. Casino executives expect a full complement of 4,750 slot machines, the most allowed by law, to be operating by the fall.

Joseph Weinberg, president of gaming for Maryland Live developer The Cordish Cos., said the early success has allowed the company to hire more than 1,200 workers, a number he didn’t anticipate reaching until the casino was 100 percent operational.

But Weinberg said he did anticipate Maryland Live’s big debut.

“We feel like we’re right on target where we plan to be. We’ve been very pleased with the reception we’ve gotten from the regional market,” Weinberg said. “We’ve been drawing very strongly from all over the region — Virginia, [Washington] D.C., Montgomery, Prince George’s, Howard, Baltimore, Baltimore city. We’ve been very happy with the market we’ve been drawing from.”

Maryland’s casinos generated $194.5 million in fiscal 2011. Two-thirds of that revenue goes to the state, including about $94.3 million for the Education Trust Fund.