Casino operators up the ante to $24m in gambling fight

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Local,Maryland,Rachel Baye

Casino operators have poured more than $24 million into a fight over a ballot measure that would expand gambling in Maryland, the latest campaign finance reports show.

Penn National Gaming spent $3.5 million last week to convince voters to reject the measure, which would allow table games and round-the-clock operation at all state casinos as well as permit a casino in Prince George's County. The company has given more than $13 million to the Get the Facts - Vote No on 7 campaign since late August, making the Pennsylvania company the largest contributor on either side of the issue.

The company owns casinos in Charles Town, W.Va., and Perryville, Md., that will face increased competition if Maryland voters approve the ballot question in November.

Owner of Hollywood Casinos looks to Maryland Live!
Penn National Gaming Inc. is interested in investing in a minority stake of Maryland Live!, the state's largest casino, the Washington Post reported.
That would be tricky given state laws preventing casino operators from owning more than one gambling license in Maryland -- Penn National already owns a Cecil County casino and hopes to bring a casino to Rosecroft Raceway in Fort Washington.
The move could be a power play by Penn National and Maryland Live! owner the Cordish Cos. to make a strong bid for a Prince George's casino license if the referendum passes, according to Frank Fantini, CEO of Fantini Research, a publishing service for the gambling industry.
"Cordish, who is a very influential force in Maryland, could strengthen considerably the chances of Penn National winning that license," Fantini said. - Ben Giles

On the other side of the fight, MGM Resorts International, which has announced plans to invest more than $800 million to operate a proposed casino at National Harbor in Prince George's, has poured $8.4 million into the campaign supporting the ballot measure. The Caesars Entertainment-led CBAC Gaming LLC, which is moving forward with Harrah's Baltimore Casino, has forked over $2.3 million.

The two sides have inundated the Washington and Baltimore airwaves with gambling ads over the last month, and robocalls and direct mailings also have begun.

Though $24 million may seem like a lot -- Gov. Martin O'Malley and former Gov. Bob Ehrlich spent $15 million in their 2010 rematch -- it's not entirely surprising given the high stakes for the companies involved, said Frank Fantini, who studies the gambling industry. With MGM planning to spend $800 million on a casino, for example, $8.4 million is not much to spend on protecting that investment.

However, the amount of cash flowing into the fight is unusual for a state where some gambling is already legal and, as a result, an expansion is likely to pass, said Alan Woinski, president of industry consulting firm Gaming USA Corp.

"The amount of spending that's been done on this is ridiculous. It's like throwing money away," Woinski said. "The amount of money Penn [National] is spending makes even less sense."

Still, Penn National has been successful with two referendum efforts in Ohio. In 2008, the company defeated efforts to open a casino in Wilmington with campaign contributions totaling $37.9 million. Two years later, Penn National backed a gambling expansion measure there and got it passed.

"They must think they have some angle to this because it's not like them to do this if [the measure passing is] a sure thing," Woinski said.

In addition to the statewide vote, Prince George's County voters must approve the ballot measure for the casino to be built.

Penn National also owns Rosecroft Raceway, which could bid for the Prince George's casino. But most observers expect National Harbor to win the license since County Executive Rushern Baker supports it.

The influx of cash for negative television ads can't hurt Penn National's odds, Fantini said. "It's to Penn National's benefit to get every no vote that they can."

rbaye@washingtonexaminer.com

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Rachel Baye

Staff Writer - Education
The Washington Examiner