- The Washington Times - Wednesday, August 8, 2012

ANNAPOLIS — The General Assembly will reconvene Thursday for a special session to consider expanding gambling in the state, but leading Democrats may have some work to do to overcome skepticism from within their own party as well as from Republicans and existing casino operators.

Gov. Martin O’Malley unveiled draft legislation Tuesday that would legalize table games at the state’s five slots casinos and allow a sixth site in Prince George’s County, if approved by voters in a November referendum. The Senate has largely embraced the gambling proposal since this spring’s regular session, but there has been stubborn opposition from House Democrats who worry that a Prince George’s casino would oversaturate the state’s gambling market and interrupt the growth of the state’s fledgling slots industry.

“It has to be done in a way that’s fair to existing operators but isn’t a giveaway to those operators,” said Delegate John A. Olszewski Jr., Baltimore County Democrat. “The question is, how do you strike the right balance between maximizing revenues and minimizing subsidies?”

Mr. O’Malley, a Democrat, dismissed such concerns while speaking to reporters Wednesday and insisted that his proposal will bring a net gain for casino operators and residents.

“This is not so much about what we want; it’s about what we need to get behind us,” he said. “We can create jobs, we can maximize the dollars that come from this.”

The Democratic governor has long been lukewarm on the prospect of expanded gambling but was pressured by Senate leaders into negotiating a compromise in the General Assembly in time to get the issue on the fall ballot. He has spent months trying to resolve a disagreement between Democrats in both chambers that boiled over in April, when the House refused to act on a Senate-approved gambling bill in the regular session’s final days.

Mr. O’Malley initially planned to call a special session last month to settle the issue, but it was delayed when a work group of House and Senate members failed to reach a consensus recommendation on legislation. Since then, talk of a special session — and the tricky issues and interests surrounding it — have dominated policy discussions.

The governor, who said Wednesday that he is “so sick of this issue,” has proposed a bill that includes sweeteners that would lower tax rates on casinos that could lose business to a Prince George’s site, and would establish a gambling commission to determine future tax rates.

It would lower the current 67 percent tax rate on slots revenues at four casinos — the Maryland Live casino in Anne Arundel County, the Casino at Ocean Downs in Worcester County, a planned casino in Baltimore and at a proposed site in Prince George’s County.

Under the bill, the Anne Arundel and Baltimore sites could keep 38 percent of slots revenues rather than their current 33 percent. Both casinos would continue to pay the same amount in taxes and 5 percent would be returned from the state to be used solely for advertising and capital improvements.

The Prince George’s site would be authorized to receive 38 percent of revenues, while Worcester — which has struggled since opening — would get its take bumped up to 43 percent.

Cecil County’s Hollywood Casino would keep its 33 percent of revenues, while the planned Rocky Gap casino in Allegany County would get 50 percent of revenues temporarily to help make the remote site viable. After 10 years, operators would get to keep 43 percent of slots revenues.

All sites except for Allegany and Worcester could also keep an additional 6 percent of slots revenue if they buy and lease their own machines. The state currently buys or leases all machines.

Table games at all six sites would be taxed at 20 percent, allowing the operators to keep 80 percent of revenues.

The bill would also bar casino operators from contributing to political campaigns, a move that the governor implied is in response to operators — particularly Maryland Live owner David Cordish — using their influence to help kill an expansion proposal during this year’s regular session.

Delegate Frank S. Turner, chairman of the House Ways and Means subcommittee that will vet the bill, said it is “a good start,” but he is troubled by different tax rates for casinos. The restriction on campaign contributions may be overkill, he said.

“There are going to be a lot of amendments to tweak the bill,” said Mr. Turner, Howard Democrat. “I’m not a skeptic, but I think we’ll have to look at the bill and debate the bill. I see some things that I’m very concerned about.”

House Republicans are expected to lead opposition to the bill and could be joined by some Democrats who have characterized the legislation and the special session considering it as a hastily crafted effort to pass tax breaks for wealthy casino magnates months after the assembly raised taxes on many middle-class families.

“I think this whole process is disgusting. There is no emergency,” said House Minority Leader Anthony J. O’Donnell, Calvert Republican. “If we’re going to consider this, we ought to do it in a measured way and not make a deal in some back room.”

The Senate Budget and Taxation Committee will hold a hearing on the bill Thursday, and the full Senate could debate and pass it as soon as Friday, chamber aides said.

The House Ways and Means Committee will have its hearing Friday, and floor debate is expected to begin next week.

Delegate Justin D. Ross, Prince George’s Democrat, said he is optimistic that the bill will pass.

“We’ll see where it heads, but it’s trending in the right direction,” he said.

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