ANNAPOLIS — As the pressure to pass a gambling bill mounts in concert with a rising vote total in the House of Delegates, the General Assembly appears poised to make a pair of casino operators huge winners in this gambling-focused special session.
Amendments tacked onto HB 1, which legalizes table games such as blackjack and authorizes the construction of a resort casino in Prince George’s County, substantially lower the tax rate imposed upon slot machines at Maryland Live casino at Arundel Mills mall and the future Harrah’s Baltimore in the city.
As a panel of House lawmakers worked into the night to further alter Gov. Martin O’Malley’s gambling expansion bill, the Finance Resources Subcommittee agreed to cut the slots tax at Maryland Live by 8 percentage points, and by 7 percentage points at the Baltimore facility. A Senate bill had set the reduction at 5 percentage points, with the potential for casino operators to apply for an additional 5 percentage points later.
Under the subcommittee’s change, Maryland Live’s operators would still be allowed to request a reduction of another 2 percentage points if they could show their market was adversely impacted by a Prince George’s casino at a rate that justified a greater tax break. The Baltimore casino could request an additional 3 percentage points.
The amendment that altered the tax rate, presented by subcommittee Chairman Frank S. Turner, D-Howard, was not discussed during the public meeting until reporters asked Turner to clarify the amendment’s effect.
Turner did not have an answer for why the amendment was not discussed in greater detail as his panel voted to approve it. Previously a staunch opponent of reducing casino operators’ taxes, Turner appeared to have completed a 180-degree turn on the issue.
“They’re going to take a big hit. … We’re looking for fairness,” Turner said. “We need for all of these guys to be financially sound.”
Lawmakers earmarked the tax reduction for marketing and capital improvements at the casinos, and the break would not come until a Prince George’s County casino opened, if in fact its operation was approved by a majority of Maryland voters in November.
The amendment also increased the tax reduction that Maryland Live would get for buying slot machines to 8 percentage points from 6 percentage points. The Baltimore casino’s compensation for that shift remained at 6 percent.
O’Malley’s legislation calls for the responsibility of buying slot machines to be shifted to casino operators. The state currently buys or leases slots for the operators.
The break would effectively reduce Maryland Live’s tax rate to 51 percent and the Baltimore casino’s rate to 54 percent. The tax on slots revenue is now 67 percent.
The increase in Maryland Live’s compensation was initially the only explanation given for the subcommittee amendment. Turner reasoned that because Maryland Live owner The Cordish Cos. did not own the number of casinos that the other operators did, it would be unable to buy slots at the bulk rate available to a company like Caesars Entertainment Corp., which will run the city’s casino.
“This is really the only facility that they have,” Turner said.
Almost 20 amendments moved briskly through the House subcommittee, with little or no discussion afforded almost every potential change. Onlookers suggested that the swift pace of the proceedings meant that O’Malley and House Speaker Michael E. Busch, D-Anne Arundel, were getting close to the 71 votes needed to pass gambling legislation in the House, and were altering the bill in order to secure the necessary tally.
Both men were pulling lawmakers into closed-door meetings throughout the day in an apparent attempt to round up votes.
One large delegation that appeared to be wholly opposed to gambling expansion, Baltimore, began to break apart late last week. The 18-member city delegation now appears to mostly favor expanded gambling, after an amendment was adopted by the subcommittee that prevents the successful applicant for a Prince George’s casino license from opening a temporary table game facility.
Del. Curtis S. Anderson, the Democratic chairman of the city’s House delegation, also wanted to prevent a Prince George’s casino from opening until the Baltimore gambling site was operating for 30 months. It was unclear whether the House would allow such an amendment to stand.
Anderson, a vocal opponent of the special session and of its casino gambling focus, was mystified by several provisions in the administration-backed expansion bill.
“Did they think we weren’t going to read the bill, or what?” Anderson said to reporters after a delegation meeting in which Baltimore lawmakers agreed to request a handful of changes to the bill.