- Associated Press - Tuesday, December 6, 2016

ANNAPOLIS, Md. (AP) - Two Maryland casinos will keep a higher share of slot machine revenue when MGM National Harbor opens this week, in a deal state lawmakers made years ago to reduce their taxes once the added competition enters the market.

No one knows how Maryland’s gaming revenue will change once MGM opens, but lawmakers are hoping to collect more money overall for the state’s Education Trust Fund and other programs that benefit from this income.

Maryland Live! in Anne Arundel County will increase its share of slot machine proceeds from 41 percent to 49 percent. Horseshoe Baltimore’s share will rise from 39 percent to 46 percent. They are the two Maryland casinos closest to MGM, which will get 44 percent of the slot machine revenue generated at National Harbor.

The larger share of slot machine revenues for Maryland Live! and the Horseshoe means less money from those two casinos for the trust fund, which supports pre-K through 12 public education, public school and higher-education construction, and capital improvements including community colleges. The trust fund will get 36 percent of slot machine money from Maryland Live!, instead of 43 percent. And the fund will get 39 percent of slot revenue from the Horseshoe, rather than 45 percent.

Still, the fund stands to gain overall by getting a new boost from MGM’s casino next to the nation’s capital in Prince George’s County. The fund will receive 41 percent of MGM slot machine revenue.

In another change, 5 percent of table game revenues will now go toward local grants to mitigate the impact of casinos on surrounding communities. That reduces the share that goes to education to 15 percent. Casinos will still keep 80 percent of table-game revenues.

It’s not the first time Maryland has changed the tax rate set in 2008 when voters first approved a constitutional amendment allowing five slot machine casinos. At first, the tax on the first five casinos was one of the nation’s highest, as casinos were allowed to keep only 33 percent of the revenue. But lawmakers adjusted the rates when they expanded gambling to allow the MGM casino and table games like blackjack in 2012. Part of the agreement called for the state’s larger casinos to own the slot machines, an expense initially carried by the state.

The portion of revenues for the Rocky Gap Casino in western Maryland was bumped up from 33 percent to 50 percent, after the casino had trouble drawing a bidder. The share of slot machine revenue for the Casino at Ocean Downs, near Ocean City, was increased from 33 percent to 43 percent in 2012.

The state’s casinos generate hundreds of millions of dollars each year for state initiatives.

When MGM opens, the amount steered toward boosting horse racing purses will drop slightly from 7 percent to 6 percent at five casinos.

Local impact grants from the slot machine portion of revenues will remain 5.5 percent at five casinos and 2.75 percent at Rocky Gap.

The amount directed to help small, minority and women-owned businesses will remain 1.5 percent at five casinos and 0.75 percent at Rocky Gap.

A fund for to help restore horse racing tracks will remain 1 percent at five casinos, with Rocky Gap exempt.

Another 1 percent goes to pay for lottery operating expenses.

In 2019, Maryland Live!, Horseshoe Baltimore and Hollywood Casino Perryville will be able to seek an added portion of gambling revenue, if MGM’s impact on their businesses turns out to be larger than expected. The state’s lottery commission would have to approve further increases. Maryland Live! could seek an extra 2 percent; the Horseshoe could request up to 3 percent more; and the Hollywood Casino could ask for up to 5 percent more.

Copyright © 2018 The Washington Times, LLC.

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