ANNAPOLIS — Maryland can support a sixth casino and adding table games would more than make up for the revenue that competing casino operators could lose, representatives from a consulting firm told state lawmakers Tuesday.
Representatives from PricewaterhouseCoopers and the state's Department of Legislative Services presented a report Tuesday to the state's Work Group to Consider Gaming Expansion - a panel of legislators and executive-branch officials charged with deciding whether the General Assembly should hold a special session next month to consider a bill legalizing table games and adding a casino In Prince George's County.
Opponents have argued that adding to the state's five licensed casino sites would oversaturate the market and cut into operators' profit margins, but analysts found that operators stand to make more money with the addition of table games, and per-capita gambling revenues in the state would still be well below those in many other markets.
"The amount of gambling that we would expect to occur here is well within the threshold that has been met or exceeded in other metropolitan areas throughout the country," said Warren Descheneaux, director of the DLS Office of Policy Analysis.
The report detailed that legalizing table games and adding a casino at National Harbor In Prince George's County would generate as much as $538 million in new revenues for the state and casino operators.
According to the report, Maryland's two largest previously licensed casinos - a planned Baltimore site and Maryland Live, which opened last week in Anne Arundel County - would lose as much as $190 million in total annual slots revenue if a competing Prince George's casino opens.
The Anne Arundel site could lose as much as $125 million of its total revenues, or 26 percent, while a Baltimore site could lose $65 million of its projected total revenues, or 17 percent.
Of that money, the operators would currently be allowed to keep 33 percent while the rest would go to the state and is primarily used for public education.
However, analysts said the sites could respectively bring in a total of $68 million and $59 million from legalized table games.
Under proposals being discussed to establish table games, operators could be able to keep 80 percent of that money. According to the study, Baltimore and Anne Arundel casino operators would have a net increase in revenues - $30.8 million more in Anne Arundel and an additional $38.5 million in Baltimore.
Analysts said slotscasinos in Allegany, Cecil and Worcester counties would see no loss in business from a sixth site, but would reap extra table games revenues.
"I think these numbers show that the decision we made in the Senate was defensible," said Sen. Richard S. Madaleno Jr., Montgomery Democrat, alluding to the Senate's passage of a gambling bill during the regular session that died in the House.
The study was performed assuming that the state continues taxing slots at the current rate of 67 percent, with 33 percent going to casino operators.
The study also assumed that the state will take 20 percent of table games revenues, with the other 80 percent going to operators.
Legislation to expand gambling could allow operators to keep 40 percent of slots revenues to protect them from lost business, or as much as 48 percent if they purchase or lease the machines.
The state currently pays for all gambling machines at the three operating slots casinos.
If the assembly passes gambling legislation next month, it would have to be approved in a November referendum.
Supporters are anxious to get the proposal on the ballot as their next chance wouldn't be until 2016, but opponents worry the state could be rushing into gambling expansion without carefully researching its impact.
William Rickman, president of the Casino at Ocean Downs in Worcester County, said the study might prove unreliable and pointed out that state analysts overestimated first-year revenues at his casino by 50 percent.
He said his site would likely need at least half of slots revenues to remain healthy, as table games would require him to hire new employees and possibly build an expansion to his facility.
"I was the only game in town at the time," said Mr. Rickman, whose casino was the second to open in the state in 2011. "Now it's time to be there for me."
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