- The Washington Times - Thursday, October 11, 2012

Supporters of a Maryland ballot initiative to expand gambling are touting the proposal as a way to jump-start the state’s underperforming slots industry, but opponents say that doubling down on gambling would be a losing bet.

According to recent polls,voters appear to be evenly split on ballot Question 7, which would legalize table games at the state’s five designated slots casinos and allow a sixth facility to be built in Prince George’s County.

The General Assembly passed legislation during the summer enabling the vote. Officials including Gov. Martin O'Malley and Senate President Thomas V. Mike Miller Jr., Prince George’s Democrat,predict that expansion would create jobs, add revenue for education and help Maryland compete with border states that already have table games.

But critics say the state made similar projections leading up to the 2008 referendum that legalized a slots program, which has since been hampered by delays and lagging revenues, and they predict that a “yes” vote this year will bring more of the same.

“The program, to date, has been a debacle,” said state Comptroller Peter V.R. Franchot, a Democrat and vocal gambling opponent. “We’re barely in the black after four years and we have a program that is heavily flawed and implemented in an incomplete fashion.”

Maryland has been slow to get its slots program off the ground. So far, just three of five approved sites have opened. In 2007, state analysts expected all five casinos to open by 2011. The casinos were to have been fully operational, with all authorized slot machines in place, by August of this year.

Analysts also estimated five years ago that the casinos would bring $1 billion in total revenue in fiscal 2012 — about half of which would go to the state’s then-newly created education trust fund — and follow it up with $1.3 billion in fiscal 2013, which began July 1.

However, casinos generated just $194 million in fiscal 2012, and have brought in $136 million through the first quarter of fiscal 2013.

Revenues have been bolstered by the springtime opening of the Maryland Live casino in Anne Arundel County — the largest of the state’s five planned facilities — but its arrival has noticeably drawn traffic away from Cecil County’s Hollywood Casino in Perryville.

Worcester County’s Casino at Ocean Downs is also up and running, but facilities in Baltimore and Western Maryland are still in planning stages after concluding long bidding processes this year that attracted few interested developers.

Gambling proponents dispute claims that Maryland has mismanaged its slots casinos, instead saying that the state has been hurt by the economic downturn and other states’ implementation of table games.

Delaware added table games to its slots parlors in 2009, and Pennsylvania followed suit the next year. Maryland did not open its first slots casino until 2010.

Sen. Richard F. Colburn, Dorchester Republican and a gambling supporter, said the state now has a chance to catch up to its neighbors and should seize the opportunity, rather than give up on its investment.

“People that want to gamble will gamble somewhere,” he said. “The question is do we really want to remain competitive, and adding games like blackjack will make our casinos more competitive.”

While supporters say that table games and a sixth site will revive the state’s existing casinos, they have also frequently said that expanded gambling will create thousands of construction and casino jobs and create additional revenue for education.

This has irked critics, who point out that the proposal will also lower tax rates on several of the state’s casinos. With these changes, more than two-thirds of the projected additional $700 million in expected annual revenues would go to casino operators rather than state or local government.

The campaigns for and against Question 7 have been mostly bankrolled by the two casino developers that have the most to gain and lose from a potential Prince George’s casino.

MGM Resorts International, which has expressed interest in building a Prince George’s facility at National Harbor, has given $14.4 million to For Maryland Jobs and Schools — a committee that has spent $17.7 million in support of Question 7.

Opposition has been led by Get the Facts - Vote No on 7, a committee that has spent $18 million and received $21.6 million from Penn National Gaming Inc., which runs the Perryville casino as well as the Hollywood Casino in Charles Town, W.Va., about a 90-minute drive from Washington. D.C.

Analysts have said a Prince George’s casino would compete directly with the West Virginia facility for visitors from the D.C. metro area.

Mr. Franchot accused state officials of kowtowing to billionaire developers. He also contended that added gambling revenue for the education trust fund would not guarantee any added funding for schools.

He said that the state has set funding levels each year for education, and that any extra school money from gambling in the past has been canceled out by an equal reduction in school funding that comes from other revenue sources.

“Whatever money goes into the education trust fund gets backed out on the other end” he said. “Education funding has nothing to do with slots machines. We would still have the education budget we have now.”

Mr. O'Malley, a Democrat who called the special session to pass a bill allowing the referendum, has dismissed assertions that gambling revenue has not helped schools, calling them “crap,” “hogwash” and “a bunch of West Virginia casino hooey.”

O'Malley spokeswoman Raquel Guillory on Thursday called opponents’ arguments “false and inaccurate.”

“Whether it’s for capital projects or new schoolbooks, that money will be used for schools,” she said. “And just as important are the number of jobs it will create.”