Md. Gaming Panel Reaches Impasse, Advises Against Special Session

OCEAN CITY -- A tentative General Assembly special session on gambling proposed for next month appears dead in the water this week after a panel appointed by the governor to study an expansion to table games in Maryland and a sixth casino site in Prince George’s County reached an impasse after a marathon meeting late Wednesday.

In May, Governor Martin O’Malley and the Senate and House leadership announced a special work group had been formed to study an expansion to table games at the state’s five authorized casinos, including the Casino at Ocean Downs in Berlin, and the addition a sixth casino at the National Harbor complex in Prince George’s County. The work group was also instructed to study a proposed reduction in the current 67-percent tax on gaming revenue.

The 11-member panel met on Wednesday for the final time and was expected to emerge with a list of recommendations for the governor, who was expected, in turn, to convene a special General Assembly session in early July so state lawmakers could begin considering legislation to get the issues in front of state voters through referendum on the November ballot. However, the panel announced on Wednesday it had reached an impasse on certain salient points and told O’Malley through a letter it did not recommend a special session until the stalemate could be resolved.

“After thorough and exhaustive discussion, it became clear that these members’ reservations were insurmountable,” the panel’s letter to the governor reads. “Additionally, many in the majority of the work group would not support any legislation that excluded the possibility of a sixth site in Prince George’s County given the potential benefit to the state.”

Without a special session, state lawmakers will not have the opportunity to debate and approve legislation on expanded gambling until the regular General Assembly session next year. Consequently, it appears an effort to get the issue in front of state votes with a referendum question on the November ballot appears to be in serious jeopardy. With the clock ticking on this election year, the next opportunity might be the 2014 general election.

“It’s our recommendation that a special session not be called until a consensus can truly be reached,” said panel chairman John Morton following Wednesday’s meeting.

While the 11-member panel, including governor staffers, cabinet members, Senators and Delegates, did reportedly give unanimous support to some of the issues in front of them, the issue of a sixth casino at National Harbor in Prince George’s County and a proposed reduction in the 67-percent tax rate on gaming revenue proved to be its undoing. The panel voted 8-3 in favor of the Prince George’s facility and the proposed tax reduction with the three Delegates in the group opposed.

Without a clear consensus, it appears unlikely O’Malley will call a special session as planned in July. The governor has said publicly he would not call a special session without a reasonable expectation of getting legislation passed, and the panel’s 8-3 vote on Wednesday appears to be a microcosm of the larger General Assembly.

Meanwhile, the panel’s lack of consensus on the proposed sixth casino in Prince George’s County and the proposed tax reduction presents a speed bump for the proposed facility at National Harbor. The owners of the entertainment complex have reached an agreement with MGM Resorts International to develop a world class destination casino on the site, but Wednesday’s action, or inaction, by the panel did not dissuade the gaming giant from pursuing the project.

“MGM Resorts is committed to Maryland and our interest in National Harbor is unabated,” said MGM Resorts CEO Jim Murren after Wednesday’s announcement. “MGM remains keenly interested in building a world-class destination resort at National Harbor.”

The other major issue on which the panel could not reach a consensus was a proposed reduction in the tax rate on casino revenue from 67 percent. MGM has said it could not build a world class destination resort and make a profit at that tax figure. It’s a problem from which several of the other proposed or existing casinos in Maryland, including the Casino at Ocean Downs, have asked for relief. Ocean Downs owner William Rickman, Jr., has said in recent weeks his new casino lost $2.5 million in its first year and blamed the high tax rate along with the current casino share.

Under the current state law, the casino share is 33 percent of the gross revenue, but Rickman said he can’t make a profit at that level. He has asked the state to consider an increase to 45 percent, which would allow the Casino at Ocean Downs to “limp by,” but has asked for consideration of an increase in the casino share to 50 percent.

One company pleased with the gaming work group’s impasse is the Cordish Company, which recently opened the Maryland Live casino in Anne Arundel County not far from the proposed National Harbor location.

“Any expansion of gaming facilities in Maryland before the five designated sites are open and performing is premature and not in the best interest of the state,” said Cordish spokesman Joe Weinberg in a statement following Wednesday’s impasse.