Lost on the debate over an expansion of gambling in Maryland are efforts by casino operators to reduce the share of revenue collected by the state from slot machines, which some call an "unsustainable" tax on the casino business.
While a panel of Gov. Martin O'Malley's staff and state lawmakers consider legislation that would allow table games and a casino site for Prince George's County, the officials have not begun debate on how a change in the split of slots money would affect the state's revenues and the financial well-being of casino operators in the state.
Officials at the Peterson Cos., developer of National Harbor, have made no qualms about their desire to alter the share of revenues so casino operators get a bigger cut.
The state currently collects a 67 percent share that helps fund education, the state lottery and the horse racing industry.
The remaining 33 percent is left to casino operators -- an amount that developer Milt Peterson says wouldn't be worth his time to build a casino along the Potomac, and is far less than what is collected by casinos in nearby states.
Delaware leaves 40.5 percent to casino operators, while Pennsylvania and West Virginia leave 45 percent and 46.5 percent, respectively.
The owner of Ocean Downs casino in Worcester County says something must change or his casino will go out of business. Adding table games would help some, William Rickman said.
"For us to be a healthy company without table games, we would need 50 percent as you did for" the Rocky Gap slots site in Western Maryland, he told the gambling commission. "We could get by on 45 percent, but the 33 percent is definitely doomed for failure."
Even if the state collects a smaller percentage of revenues, Maryland could earn more from casinos if a high-end destination casino were built in Prince George's and if table games were authorized, making all state casinos more attractive, Peterson said.
State analysts estimate Maryland would earn at least $100 million extra a year if a gambling expansion were approved.
Operators of the state's newest casino, Maryland Live! at Arundel Mills mall, oppose any expansion of gambling beyond the authorization of table games, and said their business estimates are strong enough to maintain the current revenue splits.
Maryland lawmakers, particularly those in the House, may be wary of handing a bigger piece of casino revenues to the operators. But the question the panel first must consider is whether an expansion of gambling should occur at all, said Sen. Douglass J.J. Peters, D-Prince George's -- revenue splits can be determined later.
"The timing of the ballot question is key," he said. "If we can get a question on the ballot, yes or no by voters to table games and a sixth casino in the county, that would be the most important thing."
