The Maryland Lottery and Gaming Control Commission approved the request of two casinos seeking to reduce the number of slot machines and expand table gaming.
The approval for the Maryland Live and Horseshoe Baltimore casinos comes a week after a state Senate committee requested a delay in order to be briefed on how the change would affect projected tax revenue.
Sen. Roger Manno, D-Montgomery, raised questions about the changes during a briefing last week. In an interview Thursday he said he continues to harbor concerns that the changes will result in less money for the state’s Education Trust Fund.
“The whole point was that (legalized gaming) would be a partnership and a benefit to the taxpayers through the Education Trust Fund,” Manno said. “I’m withhold judgement before saying it does or doesn’t work. We just don’t have any data.”
Of concern to Manno is the move by Maryland Live and Horseshoe casinos away from slots, which are taxed currently at a rate of 67 percent after paying out winners, to table games, which are taxed at 20 percent.
“If this is some roundabout way to say, ‘We don’t want a 66 percent tax rate, we want more of a 20 percent tax rate,’ that raises my antennas,” said Manno, who is a member of the Senate Budget and Taxation Committee and co-chairman of the Joint Spending Affordability Committee.
As a result of Thursday’s decision, Maryland Live will remove 300 of its current 4,222 slot machines. Those machines, which were branded as underperforming, will be replaced with 13 table games in a reconfigured casino. The casino is authorized to have up to 4,750 video lottery terminals.
Horseshoe Casino, which opened in August, will replace 300 of its 2,500 slot machines with about 30 table games. The casino is authorized to have up to 3,750 machines.
In both cases, the commission is allowing the casinos a year to fine-tune the number of machines needed at each facility. The reductions approved Thursday become permanent after a year.
Both casinos are expected to eliminate the respective machines before an April deadline that would require them to take over ownership of the machines from the state.
A consultant to the state gaming agency provided a study that said the changes would result long-term in additional revenue for the state by eliminating slot machines that were underplayed and replacing them with table games that are in high demand.
But the short-term impact is less clear.
The estimates provided by the consultant to the gaming commission found that revenue to the state from Maryland Live would initially decrease by nearly $500,000 while revenue from Horseshoe Casino would increase by about $260,000.
Will E. Cummings, the consultant to the state gaming commission, told legislators last week that his estimates are more conservative than those of the casino operators and that he saw positive revenue growth for the state in future years as a result of the changes.
Operators of both casinos told legislators the changes will result in an increase in jobs as they hire more dealers and other employees to staff the additional table games.
Sen. Edward J. Kasemeyer, D-Howard and Baltimore Counties and chairman of the Senate Budget and Taxation Committee, said legislators may want to take a look at how the tax rate on table games.
“That’s way off in the future,” Kasemeyer said. “We’ve got enough to deal with this budget but I think it’s a pattern that we’ve got to look at. It’s something we never thought about when we started this whole thing.”