Maryland casino referendum launches big spending

17 September 2012
By the time Maryland voters head to the polls Nov. 6, two casino companies combined might contribute more money to a gaming expansion referendum than was spent during the state's gubernatorial election two years ago.

When the dust settles, either MGM Resorts International will have convinced Maryland voters to approve construction of a hotel-casino complex roughly 10 miles from the nation's capital, or Penn National Gaming's argument that the state has enough casinos will have been heard.

Either way, Maryland voters are going to be bombarded.

So far the scorecard reads: MGM Resorts International, $5.4 million in campaign contributions; Penn National Gaming, Inc., $9.5 million.

And clearly more money is on the way.

MGM Resorts Senior Vice President of Public Affairs Alan Feldman couldn't predict how much MGM Resorts would spend in favor of passing the ballot measure.

"We are prepared to see this through," Feldman said Thursday. "We believe this is an amazing opportunity in Maryland."

Approval of Question 7 on Maryland's ballot allows construction of a new Las Vegas-style casino in suburban Prince George's County and lets the state's five previously authorized slot machine-only casinos add table games. The measure reduces the state's gaming tax, which is now an industry-high 67 percent.

Less than a month after Maryland lawmakers set the stage for ballot measure during a special session, MGM Resorts and Penn National weighed in.

Last week, MGM Resorts wrote a check for $2.9 million to the organizations backing Question 7, adding to the $2.6 million it previously donated.

Not to be outdone, Penn National wrote a $4 million check this week to the groups opposed to the referendum, adding to the $5.5 million it had already contributed.

The total $14.9 million in campaign money from MGM Resorts and Penn nearly equals the $17 million spent in Maryland's 2010 gubernatorial election.

"Both MGM and Penn have upped lobbying efforts heading into the November referendum," Union Gaming Group managing director Bill Lerner told investors. "MGM is planning to open a visitor center at National Harbor on Monday. The center's main goal will be to provide information on MGM's plans to develop an integrated resort in the area."

MGM Resorts has proposed building a $700 million gaming complex in the National Harbor complex, a 350-acre retail, dining, residential and entertainment development along the Potomac River, about 10 miles from Washington, D.C. The Peterson Cos., which developed National Harbor, is a partner in the project.

Penn National owns the Hollywood Casino in Perryville, Md., and would be eligible to bid for the Prince George's license. The company has proposed putting a casino at its Rosecroft Raceway.

However, Prince George's elected leaders back National Harbor as a casino site.

Penn National also owns a casino in Charles Town, W.Va., that stands to lose customers from Maryland if gambling expands.

Penn National officials declined to comment Thursday on the campaign.

Last month, the company placed newspaper advertisements in Maryland, explaining its opposition.

"Despite our company's deep commitment to, and significant investment in, Maryland, the State Legislature recently approved a deeply flawed bill during Special Session that, among other things, will result in a virtual sole source contract for a casino at National Harbor, thus ensuring the demise of Rosecroft and the long-term solution to saving horse racing in Maryland," the ad stated.

Some analysts believe that if Maryland builds all six casinos, the state could rival Pennsylvania for gaming revenue concentration.

Caesars Entertainment Corp. was awarded a license in July for the $300 million Harrah's Baltimore near Oriole Park at Camden Yards and M&T Bank Stadium, home of the Baltimore Ravens.

The casino was being planned for 3,750 slot machinelike video lottery terminals, but Caesars Chairman Gary Loveman said in August that the company would welcome the ability to add table games.

Penn National has opposed gaming expansion in Maryland before. The company spent millions two years ago in a failed effort to defeat a referendum that allowed Maryland Live! to be built in Anne Arundel County.

On Tuesday, Maryland Live!, which opened in June, unveiled an expansion to its slot machine floor that added 1,300 games. The property now has 4,750 slot machines, making it one of the largest casino floors in the country.

The ballot referendum in Maryland is expected to draw increased attention as the November election nears. It is the largest gaming question in the 2012 election cycle. Smaller casino issues will be voted on by voters in Oregon and Rhode Island.

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