Editorial: A clear winner in gambling debate

In case you were wondering who won the Great Gambling Debate of the 2012 regular session of the Maryland General Assembly, the results are in, and there is a clear winner – lobbyists.

Their earnings for the six months including the 2012 regular session skyrocketed 38 percent above their earnings for the similar period a year ago.

Nine of the top 10 earners represented companies with gambling interests, according to statistics from the State Ethics Commission.

As The Daily Record’s Alexander Pyles wrote in his Eye on Annapolis blog, “Every organization that holds a slots license in Maryland — and one that remains the lone bidder for a Baltimore license — spent huge sums in Annapolis.”

Penn National Gaming Inc., operator of Hollywood Casino Perryville and owner of casino wannabe Rosecroft Raceway, emerged as the top-spending employer by about $375,000, plunking down $877,432 for lobbying between Nov. 1, 2011, and April 30, 2012.

Behind Penn National came CBAC Gaming LLC (the Caesars group vying for the Baltimore license), $163,309; Casino at Ocean Downs, $132,618; PPE Casino Resorts Maryland LLC (a subsidiary of The Cordish Cos., developer of the Maryland Live casino at Arundel Mills mall), $86,542, and Evitts Resort LLC (the group just approved to operate the casino and resort at Rocky Gap), $65,875.

All told, the gambling industry dropped $1.3 million on lobbyists during the six-month period. In case you were wondering just how high the stakes were in Maryland’s casino gambling debate, now you know.

The bulk of Penn National’s spending went toward promoting slot machines for Rosecroft Raceway, a down-at-the-heels harness track in Prince George’s County that the company bought from its bankrupt operators last year in hopes that a healthy dose of slots revenue would revive the track.

But as events unfolded during the legislative session, those hopes were steamrolled by National Harbor, where plans to build a gleaming casino on the banks of the Potomac won the support of Senate President Thomas V. Mike Miller Jr. and Prince George’s County Executive Rushern L. Baker III.

The location of a sixth casino – or whether we will have one at all – remains undecided as Mr. Miller, House Speaker Michael E. Busch and Gov. Martin O’Malley continue dancing around the question of whether to convene a special session this summer to pass legislation placing the issue on the November ballot.

In short, the stalemate that torpedoed the end of the 2012 regular legislative session still exists. The House and the Senate are at odds and the governor seems unwilling or unable to broker a deal.

Enough already. We see no reason to prolong the agony through the long, hot summer, and we urge all parties to abandon the notion of a special session on gambling this year.

The economic viability of the state’s original five-casino plan is far from proven. The casinos at Perryville and Ocean Downs were doing fairly well, but Maryland Live’s strong launch put a sizable dent in Perryville’s proceeds, which were down more than 21 percent from May to June.

Rather than stampeding to add a sixth casino, we think the wiser course for the state and its taxpayers is to wait while analyzing the financial performance of the existing facilities and their projected impact not only on each other, but also on the Baltimore casino, which now looks unlikely to open before 2014.

Speaking of taxpayers, the other part of this proposed deal that gives us heartburn is the tax cut for casino operators. The Senate bill that died at adjournment of the regular session would have cut the rate from 67 percent to 52 percent. The gambling work group’s recent report recommended 62 percent for National Harbor and 62 percent for Maryland Live and Baltimore once National Harbor opened.

What message would either move send to taxpayers in the same year that income taxes were raised for about 14 percent of Maryland residents?

We think Maryland would be better served if a decision to expand gambling is delayed until 2014, when there actually may be enough information to make an informed decision.

In the meantime, we urge the legislature to move quickly to implement one thing the gambling work group agreed on — creation of an independent, professional regulatory body for gambling modeled after the Public Service Commission.

Such a move would allow professional regulators, not politicians, to make complex decisions about a complex, multinational gambling industry. And it might save those companies a few bucks on lobbying fees.