ANNAPOLIS - A planned Prince George's County casino that was projected to help the state draw an extra $223 million a year appeared dead Wednesday after a work group created by Gov. Martin O'Malley recommended against a special session to expand gambling in the state.
Members of the commission reached agreements on nearly every issue, but lawmakers in the House of Delegates broke ranks from the governor's staff and state senators on a proposal to reduce the tax rate on slot machines, now set at 67 percent.
Without approval from the General Assembly, residents won't be able to vote on an expansion of gambling in November -- as required by Maryland law -- and another election won't be held for two years.
Del. Peter Hammen, D-Baltimore, said members of the House could not stomach giving casino operators a tax break despite estimates from state analysts that Maryland could earn an additional $223 million a year in education funding if the rate were lowered and a Prince George's casino were built.
All three delegates who were voting members of the work group -- Hammen; Del. Sheila Hixson, D-Montgomery; and Del. Frank Turner, D-Howard -- voted against recommendations to authorize a sixth casino while changing the tax rate.
"As far as the work group would say, there's no sense in moving forward," said Del. Dereck E. Davis, D-Prince George's and an alternate member of the panel.
Members of O'Malley's staff called the work group's conclusion "a lost opportunity."
"For some reason suddenly the House decided they did not want to share on that consensus for reasons that don't make a whole lot of sense to me, and reasons that were not voiced, really, heretofore," O'Malley told reporters in Baltimore. "And so, I can't entirely explain it to you."
He added: "I look forward to hearing back from the speaker of the House sometime."
O'Malley still can choose to call a special session, said Matt Gallagher, the governor's chief of staff.
The work group's decision is a gut-check for Prince George's County, where developers at National Harbor had reached an agreement with MGM Resorts International last week to build an $800 million casino.
But the deal was contingent on the state legislature reducing the tax rates on slots revenue.
Nevada charges its casinos a 6.75 percent tax on gambling, while the tax rate in New Jersey, home to Atlantic City, is 8 percent. Closer to home, Delaware leaves 40.5 percent to casino operators, while Pennsylvania and West Virginia leave 45 percent and 46.5 percent, respectively.
Sen. Nathaniel McFadden, D-Baltimore, said he was disappointed that the state was passing up such a lucrative new revenue source and an opportunity to create nearly 4,000 jobs by authorizing table games at all state casino sites.
And while some lawmakers have repeatedly questioned the accuracy of state analysts' revenue projections, work group Chairman John Morton III said the state would still draw an extra $100 million annually for education even if the estimates were off by 50 percent.
"The notion that we are reducing taxes for operators and increasing taxes for citizens is erroneous," Morton said.
No changes to the state's gambling structure will be made unless a consensus on the Prince George's casino can be reached, members said.