One Year Later, Maryland Lottery Head Talks Slots

BERLIN — The first anniversary of the opening of the Casino at Ocean Downs passed last week with little fanfare, providing an opportunity to look back at the performance of the facility for the first 12 months, and while the jury is still out on the success of the facility, state lottery officials are generally pleased with the progress.

The Casino at Ocean Downs officially opened for business last Jan. 4 amid much celebration, and after a honeymoon of sorts, the gaming facility on Route 589 settled into a pattern that was remarkably consistent. Aside from a couple of months at the height of the summer season when hundreds of thousands of visitors poured into the resort areas nearby and naturally created a spike on the bottom line, the other eight months were essentially flat-lined.

The Casino at Ocean Downs produced right around $3 million in gross revenue in December, a figure that has come to be expected based on how the first year has gone at the facility. The casino produced $3 million in its first month of operation last January, $3.1 million in February, $3.2 million in March, $3.5 million in April, $3.7 million in May and $3.8 million in June.

In July, buoyed by the traditional tourism draw, the figure spiked to $5.3 million, then dropped back down to $4.6 million in August, a reduction blamed on losing an entire weekend when the area was evacuated because of Hurricane Irene. In September, the revenue held steady at $4.6 million before nestling back around the $3 million mark for the last three months of 2011.

While the first 12 months of operation do not provide a large enough sample on which to base future success of the casino, the numbers do provide a glimpse at what can be expected, according to state lottery officials.

“We are pleased with the progress at the Casino at Ocean Downs,” said Maryland Lottery Director Steve Martino this week. “The first year is all about establishing a base line and we’ve been able to do that with this batch of numbers for the first year. We’ll use the numbers to try to identify trends and see where there are possible areas of improvement. I don’t think the casino’s first-year performance surprised anyone.”

Naturally, the casino’s revenue figures reflected the resort nature of the area with spikes in the summer months and flat numbers in the shoulder seasons. Martino said lottery officials anticipated that trend when preparing to open the facility and expect it will likely continue, although there could some gains made in the down months.

“Clearly, it’s going to bottom out somewhat in the winter months, but we expect the figures to ramp back up through the spring and peak in the summer,” he said. “July and August, along with September, maybe, are always going to be the strongest months, just as November and December are probably always going to be the slowest. If you look at the year’s numbers, if nothing else it’s been very consistent.”

Pumping up the shoulder months will continue to be a challenge, but there are plans in place to reverse the sagging offseason numbers.

“There are things in the works that could make the area a broader entertainment hub,” said Martino. “There have been talks about a movie theater or bowling alley, which would broaden the area’s appeal. The live racing in the summer certainly helps, and we definitely saw the benefits of that. Horseracing and the casino go hand in hand.”

Of course, adding table games could enhance the casino’s appeal and level the playing field with gaming facilities in neighboring states. Already, bills have been introduced in the current General Assembly session allowing an expansion to table games in Maryland subject to approval by referendum, and the Casino at Ocean Downs could be adapted to accommodate them.

“Our position is to let the legislature go through its process and adjust and adapt to what comes out of that,” said Martino. “We’re on the regulatory side and not the decision-making side, so we will carry out whatever we’re directed to do.”

Prior to approval of slots in 2008, there was considerable resistance to legalized gaming in the area, resistance tempered somewhat by concessions made to protect neighboring tourism destinations and, of course, local impact grants.

A little over 5 percent of the monthly gross revenue at the casino is set aside for grants to the county, its municipalities and Ocean Pines to mitigate the impact of the facility on the community. In the fiscal year-to-date, which began July 1, the Casino at Ocean Downs has generated nearly $1.4 million in local impact grants.

“My sense is people are very pleased with the local impact grants in that area,” said Martino. “I haven’t heard one government official express concern with the level of funding through local impact grants, so I guess no news is good news. I think the casino has done a very good job of becoming part of the fabric of the community. It’s been a jobs generator and provided another entertainment avenue for residents there.”

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