Senate Bill Relaxes Ocean Downs Casino Restrictions

BERLIN — An expansion to table games at approved slots venues in Maryland moved closer to becoming a reality this week as the Senate approved legislation that would put the issue back in front of the state’s voters through the referendum process.

The Maryland Senate last Friday approved Senate Bill 892, which, among other things, would allow for an expansion of gambling at the approved slots locations in the state to include table games such as poker, blackjack, craps and roulette, for example. The bill would also approve a sixth casino in Maryland in Prince George’s County and would alter some of the provisions in the legislation approved by state votes by referendum in 2008, including changes in the revenue distribution structure and changes in the amenities offered at Ocean Downs, for example.

Just three years after the state’s electorate approved the opening of five slots at different locations around Maryland including the Casino at Ocean Downs in Worcester County, it quickly became evident the state would likely need to add table games to continue to compete with neighboring states where games such as blackjack, craps and roulette are already up and running. The bill approved by the State Senate by a 35-11 vote would allow state voters to decide the issue in an upcoming referendum vote. The bill has been cross-filed in the House, but no vote has been taken in that chamber.

Delegate Mike McDermott (R-38B), who represents Worcester and the Lower Shore, said this week he was not surprised the bill passed the Senate and was prepared to support it when it came before the House.

“Once that horse left the barn, it became evident this would be the next step,” he said. “I really don’t have any concerns about it. I’m sure at this point there won’t be a lot of opposition to it. It’s going to happen.”

Just two of the five approved slots venues in Maryland, including Ocean Downs, are now up and running although a few more are now in the planning and development stage. Although the two operating casinos have seen their gross revenues improve slightly over the first year or so of operation, the facilities have fallen short of revenue projections and the addition of table games is regarded by many as a means to level the playing field with neighboring states that already offer them.

“They’ve found the slots aren’t doing as well as they anticipated and table games appear to be the next logical step in the evolution,” said McDermott. “I had a conversation with Mr. Rickman last year and we talked about table games and he said it would be difficult to make the numbers work at Ocean Downs without them.”

Clearly, table games at neighboring states such as Delaware and Pennsylvania are big business and gaming revenues spiked decidedly upward when those states added the games in 2010. For example, the three casinos in Delaware operated 188 table games last year that generated $74 million in total revenue, or an annual average of just over $394,000 per table. In Pennsylvania, 791 table games at 10 facilities across the state last year generated over $508 million, or an average of $678,000 per table per year.

There are other noteworthy provisions in the bill, including the addition of a sixth casino in Prince George’s county that would raise the total number of slot machines allowed in the state from 15,000 to 19,500. The bill would also adjust the revenue distribution formula by increasing the licensee’s share from a maximum of 33 percent to 40 percent. The seven-percent difference would come at the expense of the Educational Trust Fund.

Of local interest, the bill approved by the Senate would relax some of the restrictions put in place on Ocean Downs in the original legislation. Under current law, Ocean Downs is prohibited from constructing or operating a conference or convention center, amusement park or other specified entertainment facility within 10 miles of the casino and is prohibited from offering patrons live music or other forms of entertainment apart from a single piano player or fireworks displays. The bill passed by the Senate last week eliminates those prohibitions.

While McDermott will soon have a vote on the issue, Senator Jim Mathias (D-38) was voluntarily on the sidelines when the issue came up before the Senate last week. Mathias recused himself from the vote after a Washington Post inquiry last week called into question a potential conflict of interest because of his employment with the local company, Royal Plus, which did extensive work at the Berlin facility.

When Mathias took over for the late Bennett Bozman and was subsequently elected to the House, he voluntarily sought an opinion of the state ethics committee on his employment with Royal Plus as it related to anything to do with gaming and Ocean Downs, and not only was he cleared to vote on the issues, he was encouraged to participate on behalf of his constituents. However, in light of recent questions, Mathias said he voluntarily chose to recuse himself to avoid even any hint of impropriety.