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ANNAPOLIS — After days of intense bargaining behind closed doors in the State House, governor’s mansion and General Assembly office buildings, the legislature found the political will to allow an expansion of Maryland’s casino gambling program.
House of Delegates leadership – in need of 71 votes to pass the Senate-approved gambling bill – worked late into Tuesday night to secure the votes necessary for passage.
Just before midnight, the House passed the bill by a vote of 71-58. Less than a half-hour later, the Senate accepted House amendments to SB 1, which allows the construction of a casino in Prince George’s County and legalizes table games, such as blackjack and poker, in all state casinos.
The bill passed in the Senate, 32-14. Gov. Martin O’Malley will sign the bill Wednesday at 10 a.m.
“I hope that what we’ve done has protected the state’s interests,” said a visibly exhausted Del. Frank S. Turner, a Howard County Democrat and reluctant casino supporter who chairs the House’s subcommittee on gambling issues.
The bill’s passage ends a contentious political saga that began during the legislature’s regular session, as a gambling expansion bill became entangled with the state’s fiscal year 2012 operating budget and ultimately torpedoed a budget agreement among Democratic leadership on the final night of the 90-day session, forcing O’Malley to call the year’s first special session to complete that agreement.
The legislation’s approval now puts the onus on Maryland voters, who still must approve the expansion in a November ballot referendum.
Senate President Thomas V. Mike Miller Jr., D-Calvert and Prince George’s, the longtime presiding officer who has been the most forceful proponent of gambling expansion in the legislature, said was thankful O’Malley and Speaker Michael E. Busch, D-Anne Arundel, became invested in the bill’s passage after being cool to gambling in the past.
“He had a much more difficult path than myself,” Miller said. “It was a landslide in the Senate, as it has been for several years. We’re just very grateful that the House passed the bill.”
Busch said he felt all along, after the special session was called, that he would have the votes to pass the gambling bill, despite his chambers’ reluctance to approve gambling measures in the past.
Education Trust Fund revenue increase less than predicted
Not only did the House support gambling, it substantially lowered the tax rate on some casino operators.
A decision by a House panel to further cut taxes on two Maryland casino owners gives the state $32 million less by fiscal year 2017 when compared to the bill’s posture when it passed the Senate.
A fiscal analysis of SB 1 shows that Education Trust Fund revenues would still increase in fiscal 2017, but only by $174 million. Gambling bill proponents had previously touted an increase in excess of $200 million to fund public school construction and improvements.
That changed when the Ways and Means Committee decided to effectively reduce the slots tax for Maryland Live Casino at Arundel Mills mall to 51 percent and the rate at a future Baltimore facility to 54 percent by 2016.
Later adjustments authorized by the committee could reduce Maryland Live’s tax rate to 49 percent and Baltimore’s to 51 percent. The current slots tax is 67 percent of gross slots revenues. Table games are taxed at a 20 percent rate.
Miller attributed the reduction to the influence of The Cordish Cos. chairman and Maryland Live owner David S. Cordish. The Baltimore developer lobbied against the construction of a sixth casino in the state for months, saying his facility would suffer from the unexpected competition.
“Mr. Cordish had a great deal more influence in the House than he did in the Senate,” Miller said. “He had his way. … He was able to get a couple of other … percentage points.”
Education funding still receives a boost under the legislation because of the addition of a sixth casino, in Prince George’s County, and the legalization of table games such as blackjack at all state casinos.
Almost half of all slot revenues goes to the Education Trust Fund. Compared the Senate bill, the House bill reduces revenue for education by $5 million in fiscal year 2014 and $11 million in fiscal year 2016. That amount jumps to $32 million for fiscal year 2017 because some tax reductions for Maryland Live and Baltimore casino do not go into effect until after a Prince George’s County casino opens. Legislation allows for that facility to open no later than mid-2016.
The analysis predicts that the gambling bill could generate revenue and savings in excess of $1.91 billion by fiscal year 2017. By that year, the Education Trust Fund could receive $753.4 million, while the six casino operators could net $925 million.
Not always an issue determined down party lines, the gambling bill received less support in the House than it otherwise might have because of the Republican leadership’s anger over how the special session was called and then run.
“The process we’re using in this [session] to make decisions is horrendous,” said Minority Leader Anthony J. O’Donnell, R-Calvert and St. Mary’s.
Separately, the Senate did not accept House changes to a bill that would have undone a Court of Appeals ruling calling pit bulls “inherently dangerous,” instead allowing the legislation to die at adjournment.
The pit bull bill was the only other legislation given serious consideration during the special session.
