The competition to lure gamblers to lose money at casinos in heating up in Maryland, West Virginia and Delaware.
The largest casino in Maryland will introduce blackjack, craps, roulette and other table games next week and stay open around the clock. The moves are expected to keep many Maryland gamblers from traveling to West Virginia and Delaware.
The expanded casino in Maryland is just latest example of the increased competition for gambling dollars. As more and more states legalize casinos, they are finding there is a limited number of gamblers to go around.
The competition also shows how casinos do not attract tourists, but instead depend on repeat local gamblers. Ed Sutor, president and chief executive of Dover Downs in Delaware, said 50 percent of his business comes from Maryland residents. Many of those gamblers live near the Maryland Live casino in Maryland.
Delaware’s slots revenue is already down 25 percent from five years ago, thanks to increased competition from area states. The Maryland Live casinos threatens to hurt business even further, prompting Delaware casino operators to seek tax breaks from lawmakers.
The upshot is – as a result of increased competition – many states can’t depend on gambling as a steady or growing source of revenue. As a result, the states are being forced to reduce taxes, which reduces the amount of revenue the states take in. Like addicted gamblers, state lawmakers are being forced to chase their losses.
Tags: casinos, Delaware, Dover Downs, gambling, Maryland, Maryland Live!, West Virginia
Maryland voters barely approved the expansion of casinos there, but many astute residents there clearly understand the folly of the state trying to gamble its way to prosperity. The Baltimore Sun has been filled with powerful letters from readers highlighting the trouble with a state public policy that promotes more casinos, including this one from Joyce Wolpert of Baltimore:
“Now that the Maryland Live casino is swelling to full force, we can usher in the New Year with the creation of a modern-day Sodom and Gomorrah open 24/7,” Wolpert wrote. “Masses of people are now to be allowed to legally gamble away all their savings, increase their credit card debt, indulge in drink and succumb to other temptations all under one roof.
“Despite the hype that casino profits will be used for the public good, any benefit we receive from them will be nullified by the cost of cleaning up the social and health problems they create. Free training for table dealers is not a way to rebuild a floundering economy. People’s basic needs for healthful pursuits, real community and meaningful work are being denied. The fiddling screeches louder as any hope for a country with justice for all burns to the ground.”
Interestingly, the letter appeared next to an add for a casino on the Sun’s Website. Another letter from Tony Buechner of Baltimore raises a question as to whether casinos are good corporate citizens. “If casinos are such a good deal for a state, lets see how the Atlantic City casinos step up to the plate and provide money for the New Jersey people who have lost their homes,” he wrote.
Tags: Baltimore Sun, casinos, gambling, Joyce Wolpert, Maryland, Tony Buechner
Two Maryland think tanks said the state should charge $500 million for a casino license, rather than practically give it away for $18 million.
The think tanks correctly argue in a study that a casino is essentially a monopoly license to print money. That’s why casino operators lobby so hard to get into a state. Jeff Hooke, who heads the Maryland Tax Education Foundation, said the $50 million MGM spent to back a voter referendum to legalize the casino underscores how lucrative a license is for a company.
Given the value of the license, the state should be charging a premium of at least $500 million. Anything less would be “would be a giveaway, corporate welfare or taxpayer rip-off,” according to the study by Maryland Tax Education Foundation, which published by the Maryland Public Policy Institute.
According to Hooke, the National Harbor Casino, planned to open outside of Washington, D.C., could generate $148 million a year in operating profits, even after all expenses including a 56 percent state tax rate. Most of that money will come from the pockets of Maryland taxpayers, many of whom will likely visit the casino several times a week.
Of course, states would be wise to state out of the casino racket. But at the very least, states that legalize casinos should auction off the licenses to ensure the best and highest price. Christopher Summers, president of the Maryland Public Policy Institute, said Maryland has left $1.6 billion on the table by its failure to conduct auctions for the casino licenses. As such when it comes to casinos, taxpayers get ripped off coming and going.
Tags: casino license, corporate welfare, Maryland, Maryland Public Policy Institute, Maryland Taxpayer Education Foundation, monopoly, National Harbor Casino
When it comes to gambling, the two biggest losers on Election Day were casino mogul Sheldon Adelson and Maryland residents.
Adelson spent tens of millions of dollars in an effort to defeat President Obama and other Democrats. But most of his political bets were a bust. Adelson will not have a direct line to the White House. But he may still hear from the feds, given that his casino company is under criminal investigation for violation of the Federal Corrupt Practices Act.
In Maryland, voters narrowly approved a measure that will allow full blown casinos across the state. A relentless advertising campaign by gambling companies underscored the stakes in the vote.
More than $90 million was spent, mostly by two companies, to influence the vote. Penn National Gaming Inc., which owns a casino in West Virginia near Maryland’s border, opposed the ballot question. Las Vegas-based MGM Resorts International, which wants to build an $800 million casino and resort at National Harbor by the Potomac River in Prince George’s County, spent millions in support of the measure.
The loser in the end will be the Maryland residents who will see an increase in social and economic ills that come with casinos.
Tags: biggest loser, casino, Election Day, gambling, Maryland, Sheldon Adelson
Regular readers of this blog know that casinos bring benefits and costs. No doubt casinos create jobs and generate tax revenue. But lawmakers and casino supporters rarely factor in the economic and social costs that come with casinos.
A number of independent studies show that casinos lead to increased crime, divorce, bankruptcy and even suicide. More alarming, are the studies that show as much as half of the revenue generated by casinos comes from problem gamblers. See a recap of some of the studies here.
In other words, the casinos are not some harmless form of entertainment. In fact, the basic casino business model depends on repeat and problem gamblers. Take away the addicts, and the casino will not survive. That’s all the more reason why it is troubling to see so many state governments rushing to legalize casinos. Lawmakers are sworn to protect citizens, not propose public policies that actually harm them.
The impact of casinos is especially something for voters in Maryland to think about as they get ready to vote Tuesday on a referendum that would add another casino and table games at the existing casinos in the state. The impact of casinos is not a zero sum game. There are winners and lots of losers, as it is almost impossible to beat the house.
Tags: casinos, economic costs, Maryland, problem gamblers, public policy, social costs
Give Maryland lawmakers this, at least taxpayers will get to decide if the state needs more casinos. And by accounts, the vote on Election Day will be close.
Maryland residents are sharply divided over the benefits and drawbacks of more gambling in the state. Sure, the casino will create jobs and more tax revenue. But the casino also diverts money that would have been spent at other businesses; strips wealth from the pockets of taxpayers; creates more repeat and problem gamblers; and leads to increase in crime, bankruptcy, divorce and suicide.
Anyone who takes the time to study the issue will understand the negative effects of casinos outweigh the benefits. Sadly, much of the public is not well informed about the issue. That’s due in part to thinly reported stories like this one in The Baltimore Sun that only scratch the surface of the issue and fail to dig into the deeper social and economic costs that come with casinos. At the same time, it is tough to overcome the misleading ad campaigns by casino supporters.
Despite the lack of information and misinformation, polls indicate voters may still defeat the referendum that would allow another casino and table games at the existing slots parlors. But if the public fully understood all the issues surrounding casinos, voters would overwhelmingly reject the measure.
Tags: casino, Election Day, jobs, Maryland, Prince George's, referendum., slots, taxes
One of the more baffling back stories in the government-backed push to expand gambling is that the elected officials often leading the way are Democrats. (See California, Massachusetts, Pennsylvania and New York.) It makes no sense for Democrats to support casinos and other forms of gambling, considering that those most often fleeced by the casinos are the poor, working class, elderly and minority.
In other words, the Democratic base.
In Maryland, Gov. Martin O’Malley, a Democrat who once opposed the idea of casinos, is now leading the way for more gambling. Washington Post columnist Robert McCartney says an upcoming referendum to add another casino and table games at existing casinos poses a moral dilemma for Maryland voters. Should voters support “expanding gambling to create jobs and raise government revenue (especially in Prince George’s County), even if it tends to pick the pocket of the poor?”
Polls indicate many Maryland voters oppose more gambling, despite millions of dollars in advertising telling the public that gambling is good. Not to mention, the media does a poor job of detailing the economic and social costs of gambling, and instead just regurgitates the talking points raised by lawmakers and casino supporters. Even still many voters understand the money from casinos comes mainly from the pockets of those who can least afford to gamble. In the end, all taxpayers pay for those costs.
Perhaps the reason Democratic lawmakers support casinos can be found in McCartney’s warped rationale. The Post columnist is willing to vote for more casinos even though he knows they are bad.
“On the one hand, I hate that state government is actively supporting an activity that contributes to addiction and extracts money disproportionately from lower-income peope,” he writes. ”Casino companies’ campaign contributions have tainted the political process. Their endless, confusing advertisements befoul the airwaves.
“But I’m willing to cover my nose and support Question 7 for one reason: It’s the only way right now to quickly help the Prince George’s economy. And heaven knows the county needs a boost.”
That is one twisted argument.
Tags: casino, Democrats, Martin O'Malley, Maryland, Prince George's County, Robert McCartney, Washington Post
Baltimore Sun columnist Dan Rodricks makes a good case why voters should reject the referendum that would allow a sixth casino in Maryland and table games at the existing casinos.
Rodricks writes: “Politics is a messy business, but the politics behind the casino referendum should be declared a Superfund site.”
Curt Anderson, leader of Baltimore delegates to the General Assembly, found the process sleazy. “It really makes you feel kind of unclean,” he said in the summer as the governor and legislative leaders maneuvered to get the measure on the ballot.
Rodricks added: “The way this matter became a question on the November ballot — a cynical Senate president manipulating the legislature and governor into a summer session, $5 million spent by lobbyists, backroom deals that muzzled opposition and got the governor the votes he needed, tax breaks for casino companies — represents all that’s wrong with American politics.
“What we have here is an almost total co-opting of representative government, where no issue wins on merits or common sense, and big money rules.”
Well said, Dan.
Tags: Baltimore Sun, casino, Dan Rodricks, Maryland, referendum.
Maryland’s casino industry is just getting off the ground and already some lawmakers want to add more locations and table games. But one of the slots parlors is struggling in the face of competition.
The manager of the Hollywood Casino in Perryville asked the state to eliminate up to 500 video lottery terminals because it has lost 40 percent of its business since Maryland Live! opened in June at Arundel Mills. The steep drop in business does not bode well for the Perryville casino, and is a sign the Maryland gambling market may not be able to support more casinos.
The move comes as Gov. Martin O’Malley has called a special session for lawmakers to add a sixth casino near Washington, D.C. and to add table games like blackjack and poker. Ironically, the owner of Maryland Live! – which is located in a suburban mall – is opposed to adding another casino, arguing the market is saturated. Indeed, all five of the casinos previously approved by lawmakers have yet to open, including a planned location in Baltimore. The early trouble in Perryville may indicate that gamblers in Maryland are tapped out.
Tags: casino, Martin O'Malley, Maryland, Perryville, slots
The battle for casinos in two major cities shows how politics often trumps policy when it comes to gambling. Indeed, lawmakers talk a good game about casinos bringing jobs and tax dollars. But the backroom negotiations show that gambling has little to do with public policy and is often driven by lots of lobbyists wheeling and dealing.
In Baltimore, Mayor Stephanie Rawlings-Blake sent a letter to Baltimore’s house delegation urging them to lay off trading their casino votes for unrelated items. The mayor said such vote dealing could kill the casino. After some delegation members complained that Miller’s position amounted to “hostage-taking,” the mayor shot back: “Everybody’s trying to get something,” she said. “This isn’t hostage-taking. This is negotiation.”
Some negotiation. For good measure, the mayor supports lowering taxes for casinos. That means less money for the government, which supposedly was one of the main reasons for legalizing casinos a few years ago. To make up for the drop in casino tax revenue, the state is looking to add more gambling. In other words, gamblers will have to lose more money in order for the state to break even.
Meanwhile in Toronto, several big casino companies, including the Las Vegas Sands, are busy hiring lobbyists to get the inside track on building a casino there. The manuevering has raised a red flag. In an editorial, The Winnipeg Free Press said: “The influx of Vegas high-rollers - along with their lobbyists – should worry anyone who puts sound city-building ahead of a facile cash-grab.”
The paper accurately summed up the state of play when it comes to the government’s role in the U.S. and other countires in enabling more and more gambling: “Welcome to the brave new world of casino politics. It isn’t a pretty place, but it’s where Premier Dalton McGuinty’s cash-strapped government is intent on taking us. And for one simple reason: That’s where the money is.
Toronto city council should avoid being hustled into playing along.
Tags: backroom, Baltimore, casino, deals, Las Vegas Sands, Maryland, Mayor Stephanie Rawlings-Blake, Toronto, Winnipeg Free Press. lobbyists