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Ballot battles rife with rhetoric

As an unprecedented stream of early voters finished having their say late last week, partisans on both sides of an equally unprecedented pool of state ballot initiatives struck out on last-gasp tours to stoke or stem support for Maryland’s quartet of controversial referenda.

James Murren

James J. Murren, chairman and CEO of MGM Resorts International Inc. (Maximilian Franz/The Daily Record)

With more than $70 million spent to influence voters’ opinion on an expansion of casino gambling (Question 7), plus a few million dollars spread across efforts to influence voting on the DREAM Act (Question 4), congressional redistricting (Question 5) and gay marriage (Question 6), the race toward Election Day has been rife with rhetoric.

But, just as the question of gambling expansion dominated the final days of this year’s regular General Assembly session, leaving a budget agreement in tatters and stacks of other bills unresolved, the gambling referendum has dominated election-related advertising — and thus discussion — in Maryland leading up to Tuesday.

“It’s a battle between two casino companies,” said James Karmel, a casino industry expert and history professor at Harford Community College. “I think it really boils down to MGM Resorts versus Penn National. … That’s the main thing.”

On a stop in his final tour of the state before voters decide the fate of Question 7, MGM Resorts International Inc. Chairman and CEO James J. Murren said he was shocked at how contentious — and expensive — fighting over gambling expansion has become. Penn National Gaming Inc., the only company financing the opposition, warned months ago it would use all available resources to stop the expansion.

“They’ve been true to their word,” Murren said. “I don’t think anyone predicted, on our side at least, that we’d have to spend the kind of money we’ve been spending, just to match on a point basis the kind of money Penn National’s been spending. We’re not frequent political campaigners. We build resorts, that’s our business model. They’re more experienced in the guerilla warfare of a state-by-state political campaign. They’ve done it in a bunch of states.

MGM has spent $29.5 million trying to convince voters that Question 7 means more money for public education and thousands of permanent jobs at casinos across the state, including 4,000 at the one Murren wants to build at National Harbor in Prince George’s County. Others, including the Caesars Entertainment Corp.-led group that is licensed to build a casino in Baltimore, have combined to add almost $5 million to that total.

Meanwhile, Penn National — which in 2010 opened Maryland’s first casino in Perryville and has one of the most successful facilities in the country in Charles Town, W.Va. — has spent $41.5 million to protect revenue at both.

And, despite gambling expansion being blessed by Democratic Gov. Martin O’Malley and the Maryland Democratic Party in a very Blue state, the company has found some support from members of Maryland’s ruling party.

State Comptroller Peter Franchot, a highly visible Democrat and likely candidate for governor in 2014, abandoned the party stance on casino gambling because of the deals worked out with casino operators and elected officials behind closed doors before and during a special legislative session in August. Opponents, including Franchot, have also cited the tax breaks offered to casino operators as a reason to oppose gambling expansion.

But Murren is quick to point out that Maryland’s tax — 67 percent — is the highest in the nation. And Karmel, the industry expert, said the tax cut — which creates a range of rates between 49 and 62 percent depending on the casino — is appropriate to make the state competitive in the industry.

“The break in the slots tax is a good thing, that really helps the industry,” Karmel said. “The win for the industry is really a win for Maryland. … A healthy casino industry is healthy for Maryland.”

Still, Franchot and other Vote No on 7 campaigners scheduled their own weekend mini-tour, an effort to get out the vote against casino expansion. Kevin McLaughlin, who has managed Penn National’s campaign against gambling expansion, has argued gambling money promised to go to public education won’t necessarily make it to classrooms.

MGM Resorts International Inc. CEO James J. Murren on Question 7

Murren says history has shown otherwise, as education spending has increased each year O’Malley has been in office. He also added that it would take 2,000 construction workers 3½ years to build the $800 million resort casino he envisions. Once open sometime in 2016, MGM would employ 4,000 permanent employees, Murren said.

All told, he estimated several billions of dollars would be spent by Maryland casino companies, from MGM’s construction and operation to capital improvements necessitated by the legalization of table games at every other state gambling site.

Executives with Caesars, which leads a group licensed to build a casino in Baltimore, and Maryland Live Casino at Arundel Mills mall have both said they would hire several hundred employees if table games are made legal.

Such games, some say, are the real crown jewel of Question 7. Surrounding states with casinos already have table games, making Maryland’s facilities inadequate in comparison.

“The region’s left you behind,” Murren said. “You’ve had table games in West Virginia, you’ve had table games in Pennsylvania, you have table games in Delaware. And it is factually true that a half a billion dollars leaves your state from people that live in the state to go to those casinos. … Those are public companies, they report the numbers, we can prove those out.”

Karmel, the industry expert, backed up that claim.

“I think it would be a significant loss for Maryland to have table games set back for two more years,” he said.

It seems the electorate is leaning toward voting down the expansion plan. A poll conducted by The Baltimore Sun found 53 percent of Marylanders were opposed to Question 7, with 39 percent in favor. Another recent poll, conducted by The Washington Post, found 48 percent opposed gambling expansion while 46 percent supported it.

“If this fails, if Question 7 fails, I will go back home,” said Murren, who lives in Las Vegas. “We will take this like adults and we will not build, and this will not come up again for probably a decade.”

He already passed on the state once, in 2008, when Maryland approved a slots-only casino program that would continue to exist if Question 7 fails.

“It really is not gaming in my definition of it,” Murren said. “That doesn’t make it a bad model. It’s just not a model we wanted to participate in.”