Maryland Gov. Martin O'Malley is banking that a Prince George's County casino and blackjack throughout the state will lead to massive gambling windfalls that will plug soaring budget gaps. But that's hardly a safe bet, according to analysts who reviewed similar gambling initiatives across the nation.
"There's no doubt Maryland will generate additional revenue in the short-term, but it's likely not sustainable over time," said Lucy Dadayan, a senior policy analyst at the Nelson A. Rockefeller Institute who studies state gambling returns. "The pool of gamblers really doesn't expand. It just shifts."
|Maryland gambling returns|
|Gambling source||Fiscal 2012||Fiscal 2011||Change|
|Traditional lottery||$1.795 billion ($556 million contributed to state)||$1.714 billion ($519 million contributed to state)||$.081 billion ($37 million contributed to state)|
|Hollywood Casino Perryville||$118.08 million||$82.6 million||$35.48 million|
|Casino at Ocean Downs||$47.95 million||$20.4 million||$27.55 million|
|Maryland Live Casino||$28.48 million||N/A||N/A|
|Total casino revenue||$194.5 million ($94.3 million contributed to state)||$103.05 million ($50 million contributed to state)||$91.45 million ($44.3 million contributed to state)|
O'Malley has called an Aug. 9 special session for the General Assembly, with hopes of bringing the state's sixth casino to National Harbor and incorporating table games such as blackjack, roulette and poker at each of the gambling facilities. Supporters say the arrangement would spark a gambling renaissance across the Mid-Atlantic, filling a major void in the market for those who would rather not travel to marquee destinations like Las Vegas or Atlantic City, N.J., to place a wager.
The gambling boons projected in the infant stages of similar projects, however, have yet to materialize.
A study by the Pew Center on the States earlier this year showed that of 13 states that legalized casinos or lotteries in the past decade, two-thirds failed to meet projections -- including some that missed benchmarks by more than half.
Maryland officials point to the strong opening of the Maryland Live! Casino last month in Anne Arundel County -- though those profits came at the expense of already established casinos -- and the 15th consecutive year in which the state lottery increased ticket sales as proof that the state should parlay the ever-present appetite for gambling into tax dollars.
Gross revenues would total $1.6 billion if six Maryland casinos were fully operational with table games, according to a state-commissioned study, which found that Maryland could accommodate a new casino in Prince George's County without crippling business at neighboring establishments.
Such optimism, however, is clouded by the annual growth in the state budget, which puts even greater pressure on casino revenue to stem the tide of red ink that has spawned increased taxes and fees in recent years. Maryland is facing a more than $400 million shortfall next fiscal year, after raising income taxes to fill a $1.1 billion gap this year.
Tax rates are mostly higher in states that adopted gambling recently, analysts said, showing that casinos are relied on to raise revenue after other options have been exhausted.
In Atlantic City, the gambling mecca closest to Maryland, returns have dwindled as gamblers cross into Pennsylvania to play in new casinos. Detractors of a Prince George's casino
are concerned that a Washington-area site would merely take business from other Maryland venues.
Some critics, including O'Malley's chief Potomac rival, said the governor should focus on a litany of economic
issues before turning to volatile projects to fill state coffers.
"It's kind of interesting when jobs and the economy and spending and debt are the big issues and the focus in Maryland has been on advocating for gay marriage and benefits for illegal immigrants and now it's expanding to gambling," Virginia Republican Gov. Bob McDonnell told The Washington Examiner. "Some people would call it a volunteer tax."
Maryland's tax collector, Democratic Comptroller Peter Franchot, shares a similar view, calling the expansion of the state's casino network "fool's gold."
As a change to the state constitution, Maryland voters would decide the fate of any gambling expansion -- along with November referendums on same-sex marriage and in-state tuition rates for illegal immigrants.
O'Malley, who originally expressed reservations about gambling growth in the Free State, said economic gains created by casinos are impossible to ignore.
"Progress is a choice; job creation is a choice," he said. "Maximizing the return on Maryland gaming for the benefit of Maryland families -- this, too, is a choice."