MGM National Harbor Casino Announces Dec. 8 Grand
Opening
An artist's rendering of MGM National Harbor, which will open Dec. 8. (Courtesy
MGM)
MGM National
Harbor will have its grand opening Dec. 8, officials announced Monday. The $1.4 billion casino resort will debut
just in time for the holiday season, and in the next few months will announce
an array of inaugural events and functions at its live entertainment venue. Casino executives promise an experience unlike
that offered by their other properties — a boutique-style hotel, integrated
3,000-seat theater, conference center, art, myriad dining options at different
prices, and a conservatory with flower sculptures that officials hope will
become a must-have backdrop for selfies. Oh, and then there is the casino. “When people come see it, they are going to
be awestruck,” said Bill Boasberg, the resort’s general manager. “There is
going to be something for everyone in this resort. We are not just targeting
casino customers.” The resort will begin
taking reservations Monday to stay at the property beginning Dec. 10.
If table games
and slot machines on a 125,000-square-foot casino floor don’t appeal to you,
Boasberg said, there are plenty of other entertainment options for tourists and
Washington-area residents alike, not to mention an outdoor patio space for
viewing sunsets. The resort’s design allows guests looking for dining or
entertainment to avoid the casino altogether.
“When we go around the region to speak, people get very excited for
these different offerings,” Boasberg added.
The 24-story
luxury hotel promises to offer style and exclusivity, officials said. With more
than 300 rooms — compared with MGM Grand’s 5,600 in Las Vegas — the
floor-to-ceiling glass-windowed suites will run between $399 and $599 per
night. The complex’s construction took
longer than expected in what was a complicated build on a 23-acre parcel of
land overlooking the Potomac River. It involved hauling hundreds of thousands
of cubic yards of soil and updating plans to fit the aesthetic that casino
officials were looking for, Boasberg said. Costs increased half a billion
dollars over the original estimate. Under
an agreement with the Maryland Video Lottery Facility Location Commission, MGM
was obligated to open in August, but the panel granted the company a six-month
extension, giving it until February to begin operations.
Boasberg said
officials don’t have estimates yet for how many people to expect during opening
week, ut he said the roads will be ready for the traffic influx — a worry for
nearby Prince George’s County residents. Vehicle traffic to National Harbor could more
than double when the resort opens, according to projections. If estimates hold
true and up to 20,000 daily visitors frequent the gambling resort, there could
be backups with heavier volumes on Interstate 95 around the Woodrow Wilson
Bridge on the Maryland-Virginia border. Late last month,
National Harbor and casino officials announced $10 million in road improvements
— from road widening to new interstate access — to be completed before the
resort’s opening to help improve traffic flow in one of the most congested
areas in the region. National Harbor and nearby Tanger Outlets draw thousands of visitors each weekend, putting a strain on Oxon Hill Rd. and Monument Ave., where a new traffic signal will be installed. New inbound and outbound lanes from I-295 and the Wilson Bridge will ease the flow of vehicles into the resort complex, which will be open 24 hours. “Residents are looking forward to having another entertainment venue to go to, not just for the gambling, but the performances that are expected to be there and the restaurants and shopping venues,” said Zeno W. St. Cyr II, a Fort Washington resident and community leader. “But along with that anticipation for the opening, there’s also a little apprehension and the apprehension is for the traffic that is expected, especially in the days and weeks after opening.”
But it’s not just
the guests. The new entertainment venue will bring thousands of commuters to
the area for work. Boasberg said the complex has hired about 350 employees and
has extended employment offers to more than 2,200 people. Of those hires, about 40 percent must be
Prince George’s residents, according to the commitments MGM made to the county
in winning the sixth and final casino license in the state. Boasberg said MGM
has met those goals. As of June, MGM
National Harbor paid more than $220 million to minority businesses and
awarded 148 firms contracts during the construction. Prince George’s businesses
received $170 million in payments and 88 local firms won contracts —
exceeding the benchmarks outlined in a community benefits agreement that elected
leaders negotiated with the company, officials said. MGM officials said more opportunities are
ahead for local businesses, from their artistic displays to supplying many
culinary offerings.
[Here’s a look at the luxury suites and
other interior pieces of the $1.4 billion MGM National Harbor]
The hotel
resort’s centerpiece will be a two-story glass-covered atrium featuring a
horticultural showcase composed of more than 70,000 flowers designed into art
pieces. The company also commissioned works from local artists and a piece by
music legend Bob Dylan. In one of the
resort’s celebrity restaurants, chef José Andrés plans to incorporate local
Chesapeake Bay fare into his new seafood restaurant — also expected to open in
early December. Many of the menu offerings will be familiar to East Coast
residents — clam chowder, Crab Louie — but will feature culinary touches of
Andrés’s native Asturias, a region in Spain.
“The outdoor terrace will be neat place where we will re-create the
crab-house experience when the weather is warm,” Andrés said. “I will also
bring in what I love, which is eating seafood with cider. . . . It will be a
Spain-meets-Maryland experience.”
Andrés plans to
offer local ciders and import his Spanish favorites. Small plates — a chef
speciality — will have a place on the menu, as will an oyster recipe he has
been working on for five years. He said he also wants to serve Snakehead, an
invasive species of fish taking over local Bay ecosystems, to expose diners to
an environmental problem that can also be a tasty dish. “There are plenty of good fish people haven’t
tried before,” Andrés said. “It’s about restaurants giving it an opportunity.”
Boasberg offered
few other details about MGM National Harbor’s debut, saying much of it is still
in the planning phase. But he has no doubt that the resort’s timing (near the
holidays), location (at the locus of three major population centers) and
amenities will make this property one of MGM’s most successful. “Given our extensive investment, we are
extremely excited and very positive on what we are going to do,” Boasberg said
about the casino’s future revenues. “We are not giving out specific numbers,
but we think we have the best location and think it’s second to none. We
couldn’t be more excited. For
reservations, call 844-646-6847.
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SWAT Team Raids High Stakes Great
Falls Poker Game, Seizes Cash, Terrifies Players
(By Tom Jackman, Washington Post, 27 January 2015)
On a quiet
weeknight among the stately manors of Great Falls, ten men sat around a table
in the basement of a private home last November playing high stakes poker.
Suddenly, masked and heavily armed SWAT team officers from the Fairfax County
Police Department burst through the door, pointed their assault rifles at the
players and ordered them to put their hands on the table. The players complied.
Their cash was seized, including a reported $150,000 from the game’s host,
and eight of the ten players were charged with the Class 3 misdemeanor of
illegal gambling, punishable by a maximum fine of $500. The minimum buy-in for
the game was $20,000, with re-buys allowed if you lost your first twenty grand.
This was not your everyday cash game with the neighbors. The
buy-in was twice what it costs to enter the World Series of Poker’s main event
in Las Vegas (though the Great Falls players did not have to pay the whole
$20,000 up front). Two established poker pros were at the Great Falls table and
another was hosting the game, taking a roughly 1.5 percent cut from
the buy-ins to pay for two dealers and two assistants to make coffee
runs or give massages to the players. “Taking a cut” is what elevates a poker
game, in the minds of the Fairfax police, into a criminal enterprise. But the
host has not been charged and the search warrant used to raid the house remains
sealed. The host declined to comment.
One regular at the game said he glanced out the French
doors in the basement, and “I saw these helmets bobbing up and down” in the
darkened backyard. The shadowy figures yelled that they were Fairfax County
police with a search warrant, then opened the door and about eight officers in
black marched in. “They were all yelling, ‘Does anybody have a weapon?’ and
‘please don’t move’” at the seated players, the player said. “One pointed
his assault rifle at me and said, ‘Hands up.’ And I can’t believe this is
happening.” There were no guns at the
table, and no resistance, the player said. “They could’ve sent a retired
detective with a clipboard and gotten the same result,” he added. He requested
anonymity so as not to jeopardize the case against him or his professional
career.
Raids by Fairfax police on private poker games are not
new — a similar game in Great Falls was raided in 2005. But in 2006, a SWAT team was called in to
arrest a single suspect accused of betting on football games, and Officer Deval
Bullock accidentally shot and killed optometrist Salvatore J. Culosi Jr. After that, the Fairfax police said they would use their tactical teams
more judiciously. Still, the Fairfax police have continued to be unapologetic
in their aggressive enforcement of gambling laws, as seen by their willingness
to bet and lose large amounts of money to take down sports bookies.
They will even make the effort to place an informant in a poker game and
they are still willing to wield their heavy artillery to take down a roomful of
unarmed poker players.
Fairfax police said they could not discuss the Great Falls
case since it is still under investigation. “In general though,” police
spokeswoman Lucy Caldwell said, “detectives have seen that some of the
organized card games, even in private homes, may involve hundreds of thousands
of dollars. At times, we’ve seen illegal activity involved in these games.
Additionally, at times, illegal weapons are present. With these large amounts
of cash involved, the risks are high. We’ve worked cases where there have been
armed robberies.”
After they got over the shock of staring down the barrels of
high-powered semi-automatic assault rifles, then being interrogated and charged
with a crime, the players and dealers all shared a similar goal: to wriggle out
of getting a conviction, even a misdemeanor, on their records. Their lawyers
were ready to go to trial in Fairfax General District Court last Thursday, and
to challenge whether the Virginia gambling law’s definition of “games of
chance” covers poker. In 2013, the Supreme Court considered and then declined to rule on whether poker qualified as a game of
skill, and the Great Falls case appeared ripe to make legal history.
But the Fairfax prosecutors, with what the lawyers said was
the police detectives’ blessing, cut them a deal: stay clean for six months and
the gambling charge would be dismissed, and eligible to be expunged from their
record. And for those who had cash seized from them — one player had more than
$20,000, the regular player said — the police agreed to return 60 percent
of the money, and keep 40 percent. Though the police use of civil forfeiture
is being revised in federal courts, in Virginia state courts
the local police agency may keep 100 percent of what they seize. And what the
Fairfax police organized crime and narcotics section, which investigates
gambling, will do with their seizure proceeds, they will not say. The defendants decided to take their deals
and keep their mouths shut. Only one player spoke for the record, though his
account of events was verified by others involved in the case.
The Great Falls game itself is not a big secret. It has been
running regularly for several years now, and big name pros such as Phil Laak
and Antonio Esfandiari have played there. Players are given $20,000 in chips,
though much of that is on credit, the regular player said, and at the end
of the night those who lose write checks to make up for what they owe, rather
than carry big cash to the game. The only games played are no limit Texas Hold
Em and pot limit Omaha.
An informant apparently assisted the police with their
investigation, the regular player and lawyers said. A new player joined the
game the week before the raid, the regular player said, and it was clear to the
poker vets that “he didn’t know what he was doing” while playing Omaha, a
nine-card version of stud hold ‘em
poker. Then, he left after only playing for two hours — highly unusual for
anyone who sits down in the middle of a serious poker group like this one. The following week, the new guy was back. And
after the SWAT team made its entrance, followed by the detectives from the
organized crime section, the new guy was the first person taken out of the room
to be interviewed, the regular said. Then, the man was not charged.
The rest of the players, including the host and the two
dealers, were given numbers and interviewed individually, the player said. He
said two detectives asked him about the game and then one said, “Did you know
that this game is illegal?” The player said he told the police, “to me, it’s a
bunch of consenting adults playing cards in somebody’s basement.” But Virginia law defines “illegal gambling” as any wager of money made for a chance
to win a prize or stake based on any contest “the outcome of which is uncertain
or a matter of chance.” Virginia law does allow private “games of chance” if
there is “no operator” involved, but anyone who operates a game with “gross revenue of $2,000 or more in
any single day” is in violation. The player said the host of the Great Falls
game only took a cut of the money to pay the dealers and player assistants.
The regular player said the police told him, “The reason
we’re here is there are Asian gangs targeting these games,” and it’s certainly
true that some private gambling events in Fairfax County have been robbed by
nefarious elements. The player said he wanted to respond, “So you robbed us
first,” but he did not. One of the
players was not charged because he was waiting for a seat. As he was
walking out, the regular said that player was told by Detective David Baucom
that he was not charged “because you hadn’t bought in.”
Baucom was also the detective who had been making football
bets with Culosi in 2005 and early 2006, and then made the request for a SWAT
team to help him serve a search warrant and arrest Culosi, though the
optometrist had no criminal record and no known weapons. Culosi walked out to
Baucom’s vehicle in his socks, handed Baucom his winnings, and Baucom signaled for
his SWAT backup. Bullock pulled up, climbed out of his SUV and said the door
banged him on his left side, causing him to involuntarily pull the trigger and
shoot Culosi once in the chest. The killing cost Fairfax taxpayers $2 million to pay a settlement of the Culosi family’s
wrongful death suit.
Meanwhile, then-Chief David M. Rohrer in 2007 issued a detailed report of the Culosi incident, including the
decision by Baucom and his superiors to involve a SWAT team. “Our
administrative investigation identified gaps in decision-making guidelines,”
Rohrer wrote. “We are modifying our policies so the use of any higher- or
high-risk tactics is not ‘automatic,’ but rather must be warranted and
reasonable based on articulated criteria and a risk assessment in each case.” Caldwell, the police spokeswoman, said this
week that “based on our training and experience with these high stakes gambling
cases, we analyze information in advance, and, very carefully. At times, the
SWAT is deployed based on information we’ve gleaned. Obviously, this is a
case-by-case basis; it is not ‘routine.’”
“It’s crazy,” said the regular, looking back on the
night of the raid. “They had this ‘shock and awe’ with all of these guys, with
their rifles up and wearing ski masks.” He noted that the Justice Department
recently revamped its guidelines for civil forfeiture cases,
following reports by The Post about abuses of the seizure process by
police around the country, including Fairfax. But in Virginia, the seizure law
remains the same, and agencies may keep what they seize, after going through a
court process.
(By J. Freedom du
Lac, Washington Piost, 13 April 2014)
In the
moments before the first hand was dealt, before one amateur and seven pros sat
down to play in a made-for-TV poker game, Gene Drubetskoy plopped an enormous
brick of cash onto the “Poker Night in America” table and shrugged. “Sorry, that’s all they had at the bank,”
Drubetskoy said as a Maryland Live Casino employee studied the bundle of $20
bills — 500 of them in all, banded and stacked and withdrawn by Drubetskoy on
the way to the biggest game he’d ever played.
The 33-year-old Reisterstown, Md., mortgage consultant exchanged the
cash for $10,000 worth of casino chips and exhaled; he was ready for his
high-stakes close-up.
Drubetskoy
had responded to an open casting call for “Poker Night in America,” a new show
that’s bringing cash-game poker back to U.S. television. (Non-tournament poker
disappeared from the dial after the Department of Justice squashed Internet
poker on April 15, 2011, and the sector’s marketing money dried up.)
Producers of
the series, who are negotiating a national distribution deal, invited
professional players to come in from all over North America for the games at
Maryland Live, then added local amateurs to the lineup to provide another
potential story line. “We bring the
stars, but we want to make new stars, too,” said Nolan Dalla, the show’s
creative director. “This is a dream, to play among the best and be seen on
television. We’re serious about giving new talent a chance.”
Drubetskoy
was one of three local amateurs picked to play in the first session on the
first of two days of filming in the casino at the Arundel Mills mall in late
March. So early one recent afternoon, Drubetskoy was under the TV lights in a
game with stakes well beyond anything he’d ever played: $25 and $50, with a
minimum $5,000 buy-in. “It’s like just
another day at the office,” joked Drubetskoy, who plays recreationally at the
Maryland Live poker room several times each week, usually at the $2-$5 and
$5-$10 no-limit hold ’em tables. “There isn’t much difference; it’s just
poker.” Of course, there was $68,500 in
play as the cameras started rolling at Rams Head Center Stage, which was
transformed into a single-table poker room for the shoot late last month
And
Drubetskoy was sitting with seven pros with nine World Series of Poker
championship bracelets among them — none more notable than the one Greg Merson
won in the 2012 World Series of Poker Main Event, the most significant
tournament in the poker world. “It’s my
dream to have an opportunity to play with these guys and sit with the best,”
Drubetskoy said. “I mean, it’s like if you play a sport, you always wonder if
you are good enough to be one of the best and play with the pros.” He didn’t want to become one of them, he
added. “My father always said, ‘You need to earn money, not win money.’ ”
Drubetskoy
simply wanted to measure his skills against the pros and see what would happen
when he tangled with the likes of Matt Glantz, Gavin Smith and Merson, who grew
up in Columbia, a few minutes from Arundel Mills. Could he compete? His wife, Enessa, thought
so. “I told her I was going to buy in
for $5,000, the minimum,” Drubetskoy said. “She looks at me and says: ‘No,
you’re going to buy in for 10.’ It was kind of cool to hear; she’s really
confident in me, maybe more confident than I was.” The game began. Drubetskoy folded more hands
than he played. He avoided major confrontations with the other players. He was
winning medium-sized pots — enough to add about $4,000 to his starting stack —
but wasn’t particularly aggressive. “You
can definitely tell he’s played quite a bit of poker and knows what he’s
doing,” Merson said of Drubetskoy during a break. “There are certain spots
where he’s playing too weak, but playing in a bigger game, that’s not the worst
thing. He doesn’t want to put himself in a tough decision for a lot of money.” Tom Schneider noticed.
The
four-time World Series of Poker bracelet winner from Arizona had been studying
the unknown amateur since they arrived. “I
pick up clues immediately,” Schneider said. “If you come in, like Gene did, and
all your bills are 20s, it means you don’t have casino chips and you don’t have
100s. It means you went to the bank and money is probably more important to
you. You’ll be a little tighter with it than somebody who comes in with $20,000
in $5,000 casino chips, which means they’re probably a gambler in the pit and
money won’t mean as much to them.”
Schneider
had decided the amateur wasn’t somebody he needed to spend much time thinking
about and adjusted his game accordingly. “Gene is playing a little too
passively. He’s a lot easier to play against because I don’t feel like he’s
going to make a lot of plays against me.”
Drubetskoy didn’t disagree. “Playing with these guys, I have to decrease
the number of hands I play,” he said. “I’m playing tight. But it’s a good
learning experience.” The game resumed,
with the action appearing in real time on the big-screen TVs in the
split-level, 52-table poker room, which is usually the busiest card room on the
East Coast. Mike Smith, Maryland Live’s director of poker operations, stood
behind Drubetskoy and talked about what it would mean for a local amateur to
beat the pros. “Maryland players are proud, and they should be,” he said. “It
would obviously feed that pride.” Nearby,
another Maryland Live regular, Richie Smith, laughed. “Gene is a terrible poker
player,” he said. He added that he was joking — which itself may have been a
bluff. “Gene’s a good guy, and he’s probably having the time of his life,
playing with all those guys.”
Another
local player, Jerry Schlichting, threw Drubetskoy a bag of cashews and almonds.
“I’m giving you the nuts,” he said, making a poker joke. “I hope it helps.” Away from the table, Schlichting said it was
strange to see Drubetskoy — with whom he’s played countless times, at much lower
levels — sitting at a TV table, mixing it up with the pros. “I’m definitely jealous,” he said. “It’s a
once-in-a-lifetime thing.” Then,
suddenly, Drubetskoy stood up and scrunched his face in displeasure. He’d just lost a pot, worth about $30,000, to
David Baker, the pro sitting to his left. Drubetskoy had two kings; Baker had
two aces — and all of Drubetskoy’s chips.
The amateur put another brick of cash on the table in an effort to
recover what he’d lost (he was still down about $10,000 when the session ended
and the cameras stopped rolling). Then, he slumped in his chair. “That’s poker,” he said.
At
Maryland Live Casino, Relentless Surveillance Operation Targets Cheats, Thieves
(By J. Freedom du Lac, Eashington Post, 22 February 2014)
Behind an
unmarked door, the secret surveillance bunker in the bowels of Maryland’s
largest casino was humming with activity.
A manager on the gambling floor at Maryland Live had called in some
suspicious behavior from one of the table-game pits, and the surveillance
supervisor was blurting camera numbers like a quarterback calling an audible.
Radios were crackling, and automated announcements were piped into the room
every time a secured door opened on the massive Arundel Mills property. But the focus was on the bank of 42-inch monitors
at the front of the room. The surveillance team was quickly trying to determine
whether a customer’s odd behavior indicated cheating or . . . something else.
“See that?”
a surveillance operative asked. “I don’t
know,” another one said, staring at the screens on the wall. The eyes in the sky never blink at Maryland
Live, where officials are nearly as obsessive- and surreptitious- about spycraft as their
neighbors at the National Security Agency. And for good reason. Every month hundreds of
thousands of gamblers stream into the casino, leaving behind more than $50
million in revenue. Protecting that gold mine from thieves, cheats, drunks and
other threats: a security force of 200 officers and a separate state-of-the-art
surveillance operation. At Maryland
Live, they’re always watching, pan-tilt-zooming, searching for wrongdoing in a
place where somebody, somewhere is probably doing something they shouldn’t —
usually at the expense of the casino’s bottom line.
More than
1,200 cameras in and around the casino are monitored from the dimly lit bunker,
a room so secret that most of Maryland Live’s 3,150 employees don’t know its
location. It’s the nerve center of the self-defense operation at the 2
million-square-foot, 24-hour casino, which is probably one of the most closely
watched spaces in the capital of the modern surveillance state. The men and women who work inside are
“trained to identify things that don’t make sense,” said Rob Norton, the
casino’s president and general manager, as he stood on the edge of the center
one recent afternoon. “They watch for unnatural behavior and things that just
look suspicious.” Now everyone’s
attention was trained on the visitor acting strangely at one of the tables.
Marco Valdez, the casino’s surveillance director, squinted at the monitor,
trying to decipher the customer’s body language. Norton shifted nervously. Allowing outsiders
into the surveillance center is a rare occurrence. “Okay, that’s enough,” he said suddenly,
before ushering a reporter into an adjacent video-review room, away from the
real-time closed-circuit feeds.
The
cheaters were coming, and Maryland Live was ready for them. For the first 10 months of the casino’s
existence, it only featured slot machines. But on April 11, 2013, just past
midnight, Maryland Live- already one of the country’s largest commercial
casinos- added 122 live-action tables, from blackjack to baccarat. Among those
in attendance for the launch: professional crooks who travel the world, looking
for vulnerabilities. “A number of known
cheaters came in and tried to take advantage of us, because we were a new
operation,” Norton said. To prepare for the onslaught, Maryland Live brought in
specialists skilled at finding scammers who had hit other casinos. The security
agents began ejecting cheats that very night. “They really ran at us for about a month, ”
Norton said, adding: “It hasn’t died down.” The casino cheats include card
counters and people who try to steal chips from distracted dealers and players.
They all wind up in the casino’s “black book,” which is filled with hundreds of
names and faces of banned individuals. “We’re
always scanning the crowd for those people, using sophisticated systems,” said
Norton, who declined to say whether Maryland Live uses facial recognition
software. Norton is paranoid about divulging too many details about the
casino’s surveillance operation, which might somehow give crooks and cheats an
edge. In fact, he won’t even reveal how much the Arundel Mills casino has spent
on surveillance, other than to say, “It’s in the millions- and growing.”
Big Brother
is big business. The global market for video surveillance equipment is expected
to grow to $15.9 billion in 2014, according to the analytics company IHS.
Research firm Markets and Markets estimates that the $2.2 billion casino
management systems market- which includes video surveillance hardware and
software — is expected to double by 2018. Beginning Monday, gambling regulators,
investigators, casino officials, auditors and surveillance-system developers
and manufacturers will gather in Las Vegas for the World Game Protection
Conference to compare notes and war stories and learn about the latest advances
in surveillance technology. Among those attending will be security experts from
MGM Resorts International, which is opening a
huge casino in Prince George’s County in 2016.
The stakes
are astronomical. The nearly 1,000 commercial and tribal casinos in the United
States generated more than $64 billion in gambling revenue in 2012, according
to the most recent data from the American Gaming Association and the National
Indian Gaming Commission. Casinos are
like giant banks, given how much money passes through them each day. Maryland
Live officials won’t say how much cash may be in the casino at any given
moment, but figures published by the state provide a hint. In 2013, Maryland
Live raked in about $586 million in gross, pre-tax gambling revenue
— an average of more than $1.6 million each day. And that’s just the casino’s
win; it doesn’t account for the money wagered and won back by players. “To protect all that cash in and out,” said
Alan W. Zajic, a Nevada-based security consultant, “is a big challenge.”
Maryland
Live’s surveillance center is staffed around the clock, with cameras forever
watching over 330,000 square feet of restaurants, bars, cashier cages and
gambling space, along with a multi-level parking garage and uncovered surface
lots. They also monitor what’s going on behind the scenes, in the liquor room,
the warehouse, the dice-and-card destruction room, the employee corridors and,
of course, the count room, where the money is processed. The closed-circuit system “is the latest and
greatest technology,” said Valdez, the surveillance director. “We can read
license plates from several hundred yards away.” Each surveillance agent (the casino won’t say
how many there are) works at a station equipped with four monitors — one with
real-time video feeds; one for reviewing recorded footage; one that shows all
of the property’s camera positions, which can be accessed by touch screen; and
a fourth for typing reports.
Norton
worries constantly about people perpetrating crimes at and against the casino.
“I see 99.9 percent of the people here as genuinely good,” he said. The
dishonest minority is why the casino spends so much money and bandwidth on
playing defense. There are assets to
protect and a public image to maintain: Customers need to feel good about where
they’re gambling, he said, which is why cashiers don’t operate behind
plexiglass. Turning the property into a fortress would send the wrong message.
“We want everybody who comes here to feel safe. That’s absolutely the number
one thing we have to get right.” Even as
the casino has attracted hordes of people to the area, which includes a
high-traffic 1.3 million-square-foot shopping mall, crime at Arundel Mills has
fallen in many categories, according to Anne Arundel County police statistics. Lt. John McAndrew, who manages police
deployment at Arundel Mills, attributes the improvement to the casino’s vast
surveillance and security operation. “It’s just a challenging environment to
come into to engage in criminal activity,” McAndrew said.
Besides the
county police presence in and around the casino, Maryland Live has a security
force of about 200 officers, headed by Karen Shinham, who spent a
quarter-century with the Howard County Police Department. On weekend nights,
Shinham has more security officers working at the casino than are on patrol in
some Maryland counties. Still, there have been robberies in the parking lot.
Cheating episodes. Counterfeit bills. Fights- including one in which a Maryland
Live security officer assaulted another member of the department. A
4-year-old was locked in a car for eight hours while her mother
gambled. Somebody was found carrying a gun.
According to state regulators, there were 71 thefts or robberies at Maryland Live last year. There
were another 10 incidents of internal theft at the casino in 2013, including a
poker dealer who was spotted putting extra casino chips into his tip box. After
a surveillance review, the dealer was fired and arrested on theft and related
charges.
“Our
surveillance and security teams do an incredible job in keeping things from
happening,” Norton said. “On those rare occasions where we do have an incident,
they’re able to help bring it to a close incredibly fast.” Last month, a 58-year-old man who’d fallen
asleep in his car was robbed at
knifepoint in the parking garage. The casino’s surveillance staff helped police
identify a suspect vehicle in less than an hour. By the afternoon, the car’s
owner had been arrested at his home and charged on seven counts, including
robbery and assault. A second suspect was arrested just before midnight and
charged on the same seven counts. Police officials said “the quick arrests” were
due in large part to the casino’s video operation.
In an
office attached to the surveillance bunker, Norton had a technician call up an
archived clip. It was July
2013. A woman was hovering at a blackjack table, observing the action. She
fidgeted, looked around furtively, then grabbed four purple chips — each worth
$500 — out of the dealer’s tray. The
crime was spotted instantly, Norton said, and an employee in the gaming pit
triggered a panic alarm that alerted the surveillance agents. They quickly
located the woman in the parking garage. She was arrested by Anne Arundel
County Police before she’d left the Arundel Mills complex and is awaiting trial
on a felony theft charge.
In the old
days, surveillance operations were so primitive that they seem almost laughable
now. Most casinos put catwalks or crawl spaces over the gambling floor and sent
people up to monitor the action using binoculars or other “technology.” “When I broke in in 1974, some of the places
had this periscope-type thing, but instead of looking up, you were looking
down,” said George Joseph, a Las Vegas security consultant. “The silly thing is
that the lens was visible below the ceiling. And if you moved it, it sounded
like somebody’s brakes screeching.” In
the late 1970s, Joseph put in the first 100 surveillance cameras at the Aladdin
Hotel in Las Vegas. He later installed a surveillance system at the Dunes, with
cameras housed “in bubbles the size of large black beach balls. They moved
about two degrees a second. A little old lady with a walker could outrun the
cameras.”
Reviewing
footage “on those reel-to-reel monsters,” Joseph said, was a horribly
inefficient process.
Fast
forward to the modern systems, which often feature license plate recognition
systems, tracking software to follow certain people through the casino and
360-degree, high-definition cameras that record with so much clarity that
surveillance operators can zoom in after the fact- and it’s not even a fair
fight for most cheaters, Joseph said. “Some of the old sleight-of-hand cheating
methods- ‘capping’ or adding to a bet when you know you’ve won, ‘pinching’ or
taking away from your bet once you know you’ve lost, past-posting a bet to a
winning number in roulette after you know the outcome- are in the history book.
They’re just so easy to catch if you follow the right procedures and are paying
attention.”
Casinos use
countless other protective measures and procedures, too. The red plexiglass on
the blackjack tables can help employees spot marked cards. Getting to any cash
box takes multiple sets of keys; no one employee can access the money alone.
Garbage bags are clear, so employees can’t sneak, say, high-grade cuts of meat
into the trash to retrieve later. To
Norton, it doesn’t matter if you’re trying to cheat the casino out of a few $25
chips or if you’re stealing food. It’s all coming out of the bottom line. “I
have zero tolerance for any sort of theft,” he said. “Ever see that movie ‘Casino’?” he
asked, standing on the gambling floor. There’s
a scene in the film where the fictional casino’s boss, played by Robert De Niro,
explains the way things work in the gambling world: In Vegas, everybody’s
gotta watch everybody else. Since the players are looking to beat the
casino, the dealers are watching the players. The box men are watching
the dealers. On down the line he goes, until he says: I’m watching the
casino manager. And the eye in the sky is watching us all. The movie came out nearly 20 years ago. The
riff still stands, Norton said. Nearby,
several jumpsuit-clad employees were extracting locked and loaded money boxes
from some of the casino’s roughly 4,300 slot machines. They were placing them
in a rolling metal cage, which was guarded by uniformed security officers. “Surveillance
is watching this right now,” Norton said. He smirked, then added: “They’re
always watching.”
The Time Is Here For Online Gaming
(Christopher Versace, Forbes, 26 February 2014)
It’s no secret the Internet has changed
the way we do many things and those shifts have rippled through several
business models forcing companies to adapt or be left behind. Some of the more
common examples include:
- Apple’s iTunes and downloadable music has had a widespread impact on the music industry changing it from one focused on albums and CDs to downloadable singles for $0.99 apiece. The same can be said of Amazon.com ability to have books, CDs and other items shipped to you rather than going to what used to be Sam Goody, Tower Records, or a Borders bookstore;
- Netflix and other video streaming services that have out mom and pop video rental stores as well as one time high flier Blockbuster Video out of business;
- Online brokerage services, such as TD Ameritrade Holding, Charles Schwab and others that have reshaped how investors buy and sell stocks;
- Orbitz Worldwide, Priceline.com, Expedia, Tripadvisor (TRIP) and other online travel sites have pulverized the travel agent business;
- How we store digital photos and get them printed has given rise to companies like Shutterfly and Shutterstock, while leaving one time photo company Eastman Kodak (KODK) on the brink;
- Even communicating via e-mail, text message and other message apps offered by Facebook, Google, Apple, Yahoo, AOL and others has taken its toll on the US Postal Service.
As technology
marches on, the scope of industries affected by the Internet continues to
expand. Last week, online learning company 2U, Inc filed for an IPO of up
to $100 million. The Landover, Maryland-based company provides cloud-based
online learning platforms that help nonprofit colleges and universities in
student enrollment, education, support and other services. Another example is
how the pharmaceutical industry is embracing the Internet and Cloud computing
to streamline R&D budgets while facing a high proportion of patent
expirations between 2011 and 2014. That’s shift has been good for companies
like Medidata Solutions.
There are several
industries that have only just starting embracing the Internet, and one of them
is the gambling and casino industry. On a global basis, online gaming or
iGaming as it has been called has grown into a multi-billion dollar business,
particularly in Europe. In the past online gaming used to mainly attract
younger men, but that demographic group has expanded to include both women and
older age groups. Since 2004, women’s share of Internet users between the ages
of 16 and 74 in Europe has increased by more than 80%, while the same age group
for men has seen an increase of 60%.
There have been
fits and starts with online gaming here in the US in the past. After an initial
surge Congress stepped in with new laws aimed at stopping online gaming.
However, states have recently begun legalizing intrastate online gambling —
Nevada, New Jersey and Delaware launched in 2013 and the states in which
legalization legislation has been introduced continues to grow — California,
Colorado, Hawaii, Illinois, Iowa, Louisiana, Massachusetts, Mississippi, and
Pennsylvania.
How big can
online gaming be? Well, in New Jersey, online gaming began on November 26 and
generated $8.3 million by year’s end. GamblingData predicts New Jersey’s online
gambling market will generate $262 million in gross gambling revenue this year
and $463 million by 2017. Third party forecasters tout that the US. is poised
to earn gross winnings of over $7.4 billion by 2017, representing around 30% of
the global online gaming market. Imagine the incremental benefit to be had in
New Jersey and others states when it comes to tax revenues.
Not everyone is
happy about this progress. Some established businesses being hit by the
disruptive Internet are looking to Congress to put the Internet genie back into
the bottle. A well-funded campaign has been initiated to stop the growth,
legalization and online competition for established brick-and-mortar gaming
companies in its tracks. A group funded by a billionaire Vegas casino
owner called the Coalition to Stop Internet Gambling, is hiring lobbyists and
consultants to pressure Congress to outlaw competition from the Internet.
Former New York Governor George Pataki who now serves as the co-chair of the Coalition to Stop
Internet Gambling, is attempting to paint a scary picture when it comes to
Internet gaming instead of focusing on the potential benefits of jobs and tax
revenue to be had while technology addresses consumer and business concerns. Keep
in mind this is far different than the view the former governor expressed in
late 1996 when he supported legalizing casino gambling in the state of New
York. As Pataki said at the time “We have to be in a position where the
state has the ability to have more control and possibility of getting revenue —
property taxes, sales taxes, income taxes — from this industry.”
Given the fiscal
status of many states and municipalities, one has to wonder why Pataki would
want to keep the gaming industry confined to whips and buggies rather than
implement business forward regulations to minimize the risks while
maximizing jobs and taxable revenue. If such business forward regulations are
not passed, we run the risk of potential online gaming revenues to both gaming
companies and states/municipalities being losing out to offshore efforts,
which would likely create far fewer jobs here in the US. If Pataki was still
governor of New York, I have to wonder if his position on online gaming would
be different.
Naturally, some
have concerns but the fear driven rhetoric coming from Governor Pataki and the
coalition doesn’t withstand even basic scrutiny. One such concern is
making sure that minimum age to gamble rules are enforced and where applicable
players are located within a state’s border in order to gamble. Just as was the
case with online wine and alcohol sales, technology is offering the solution.
In fact, states that are moving forward with online gambling are placing
safeguards that are not available today from offshore sites.
Helping New
Jersey in that process by offering geolocation services for New Jersey is
Locaid LLC. The Locaid system in New Jersey has four levels of location
verification that include mapping a person’s location by using cell towers,
tracking IP addresses on computers and matching computers and mobile phones
together by having a PIN texted to a mobile device that must be entered on the
computer. Once logged in, locations will continue to be monitored, and those
betting near state borders will be closely monitored with more frequent checks.
Locaid is not the only company addressing this pain point, another is 888
Holdings (EIHDF), which tracks who the customer is and his betting patterns. If
anything unusual is seen, the company reaches out to the customer. According to
888 Holdings CEO Brian Mattingley Internet gambling provides even more
protections than gambling in a brick-and-mortar casino because of the levels of
verification a player goes through to play online.
Another concern
proffered by the Coalition to Stop Online Gaming is the much ballyhooed wave of
gambling addicts that will arise as a result of online gaming, however research
papers from the Harvard Medial School and others have pointed to a lack of empirical
evidence to support the claim. Even so, many online gambling operators offer
self-limiting features, allowing players to set limits on how much money or
time they spend gambling. The New Jersey Division of Gaming Enforcement is
extending its self-exclusion list to online gambling, allowing individuals to
ban themselves for one to five years.
The Coalition’s
unsubstantiated claims aside, it seems the danger they fear the most is
competition. However, from an investor perspective, such government intervention
is never helpful. If the market is allowed to continue and expand, the
growth of online gaming should be a revenue boost to companies like Caesars
Entertainment, Boyd Gaming (BYD), MGM Resorts and others that have partnered
with 888 Holdings and BWIN.PARTY DIGITAL (PYGMF) to enter the online gaming
environment. As we’ve seen in the past and as I’ve outlined at the beginning of
this piece, the impact of technology can result in significant shareholder
value and its poised to do so again with online gaming. For those companies
that don’t embrace online gaming or sit on the sidelines too long — Wynn
Resorts, Las Vegas Sands, and others – they risk becoming a mobile phone in a
smartphone and tablet world.
Maryland
Weighs Lifting Obscure Ban On Playing Poker For Money At Home
(By Fredrick Kunkle,
Washington Post, 25 February 2014)
Marylanders
who host penny-ante poker
games in their houses would no longer be breaking the law under a bill that
advanced in the Maryland Senate on Tuesday.
But then most Marylanders probably have no idea that hosting a friendly
game of Texas hold ’em in the rec room is breaking the law, especially since
the state has gone all in on
casino gambling. Even some lawmakers didn’t know about an obscure provision
that prohibits wagering on any game of chance or skill, even in the privacy of
one’s home. “It’s illegal to get your
Parcheesi game out now and bet money on it,” said Sen. Nancy J. King
(D-Montgomery). King said that when Del. Kirill Reznik (D-Montgomery) pointed
out the prohibition to her, it seemed too ridiculous to be true. “Nobody believes me when I tell them this,”
Reznik said.
But Reznik acknowledged that, as a regular in a local poker
game, he too had been living on the other side of the law for some time without
even knowing it. (He also ratted out his wife for playing mah-jongg for pocket
change.) Reznik, who’s been known to
deal a hand of high-low Omaha now and then, said he learned about the obscure
provision after members of his regular poker game kept declining his invitation
to play host in Maryland. Violators could face penalties of up to a year in
jail and fines of up to $1,000. “I think
it’s one of those legislative quirks where you write a law outlawing gambling
and this is one of the unintended consequences,” Reznik said. He said no one
can remember when the law was last enforced, but it’s probably time to take it
off the books. King’s bill is headed for
a final vote later this week. Reznik’s bill is pending action in the House. The
legislation would still make it illegal for the host to take a cut of the
proceeds, as casinos do.
Sheldon Adelson, Casino Magnate, Readies To Fight Internet Gambling
(By Peter Wallsten and Tom Hamburger, Washington Post, 17 November 2013)
Billionaire
casino magnate Sheldon Adelson, whose record-breaking campaign spending in
2012 made him an icon of the new super-donor era, is leveraging that newfound
status in an escalating feud with industry rivals over the future of
gambling. Adelson, best known for
building upscale casino resorts in Nevada and more recently in Asia, wants to
persuade Congress to ban Internet betting. He says the practice is a danger to
society and could tarnish the industry’s traditional business model. Nearly all of his competitors, including
Caesars Entertainment and MGM Resorts, disagree. They say regulated Internet
gambling can be done safely and can boost the industry. To make his point, Adelson is preparing a
public campaign to portray online gambling as a danger to children, the poor
and others who could be exploited by easy access to Internet betting.
Three states
have moved to legalize online gambling, with New Jersey scheduled to go live
this month. At least a dozen others are expected to consider it next year. The new push against Internet gambling is
Adelson’s biggest foray into a legislative debate directly related to his
business, and it sets up a test of the influence that a mega-donor can exert
when lawmakers know he is willing to spend enormous sums to influence
elections. Adelson has
begun hiring lobbyists and public relations experts in Washington and in state
capitals nationwide to press his case in what is shaping up to be one of the
most heavily lobbied debates of 2014.
In January,
Adelson plans to roll out an advocacy group, the Coalition to Stop Internet
Gambling, that aides say will include advocates for children and others who are
considered vulnerable to the temptations and potential harms of online
betting. The coalition hopes to enlist organizations representing women,
African Americans and Hispanics, all seen as likely to be sympathetic to the cause. Advisers to Adelson say he is intensely
focused on the coming battle and talks about it every day with his staff. He
has about two dozen experts working nearly full time on the issue. “In my 15 years of working with him, I don’t
think I have ever seen him this passionate about any issue,” said Andy Abboud,
Adelson’s top political adviser.
Rival firms
view Adelson’s initiative as a major threat and say they will mount a
counteroffensive arguing that his proposed ban would foster a dangerous,
unregulated black market. Some
competitors noted that Adelson, whose chosen political candidates lost last
year, could not guarantee success, even with his ability to tap a seemingly
bottomless bank account. “We don’t make
a habit of picking fights with billionaires,” said John Pappas, executive
director of the industry-aligned Poker Players Alliance. “But in this case, I
think we’ll win, because millions of Americans who want to play online will
oppose this legislation, along with dozens and dozens of states that want the
freedom to authorize any kind of gaming they see fit.”
Still,
Adelson’s industry rivals say they are struck by his new assertiveness. They
point with trepidation to his campaign expenditures last year, which dwarfed
those of the entire industry. Adelson,
whose Las Vegas Sands properties include the Venetian and the Palazzo on the
Las Vegas Strip and elaborate new casinos in Macau and Singapore, created a
stir in last year’s elections when he and his wife spent nearly $100 million,
according to the Center for Responsive Politics, to help Republicans. He almost
single-handedly kept Newt Gingrich alive in the Republican primaries and spent
generously on ads in congressional races.
His lavish spending followed 2010 court decisions permitting unlimited
political donations by individuals, corporations and labor unions.
Adelson, 80,
has been known primarily as an ideological donor. He has spent millions in
support of Israel and its Likud party, and last year he backed conservative
causes in the United States beyond presidential and congressional politics. He
helped bankroll anti-union and anti-tax initiative campaigns in
California. Aides say his effort on
Internet gambling is entirely bipartisan and is unrelated to his past or future
political contributions.
Adelson has
hired three former elected officials as national co-chairs to speak on behalf
of the coalition: Wellington Webb (D), the first black mayor of Denver; former
U.S. senator Blanche Lincoln (D-Ark.); and former New York governor George Pataki
(R). Abboud pointed to a cautionary tale
in the experience of the tobacco industry, which faced a damaging public
backlash after it was accused of marketing its products to children. “This could be our ‘Joe Camel’ moment,” he
said, referring to the cartoon character that critics said was used to subtly
market Camel cigarettes to kids.
Adelson's competitors question his concern about the social costs of
Internet gambling. They note that his
company obtained an online gambling license in 2003 in one of the British
Channel Islands, though Abboud said that was a “small exploratory effort” that
was quickly abandoned.
The rivals
say they worry his approach would effectively encourage expansion of offshore
gambling sites, beyond the reach of U.S. regulators who already have tools to
regulate online betting more closely than casino gambling. “Sheldon’s approach would endanger everything
he professes he wanted to protect,” said Jan Jones Blackhurst, executive vice
president for government relations at Caesars Entertainment. Adelson argues
that a strictly enforced federal ban would effectively shut down black-market
gambling. Until recently, there was a
widely held view that most online gambling violated federal law. But a 2011
Justice Department legal opinion cleared the way for states to allow many forms
of online betting.
Several
casino companies and allied groups have tried pushing federal legislation to
allow regulated online gambling. Meanwhile, they have found success selling the
idea as a source of revenue for cash-strapped states, which can use technology
to make sure only people from those states log on. Adelson’s stance puts him at odds with one of
his party’s leading 2016 presidential contenders. New Jersey Gov. Chris
Christie embraced the idea as a way to help bolster Atlantic City, where
casinos have been struggling to survive but will benefit by operating that
state’s online gambling. Christie called the measure a “responsible, yet
exciting option that will make Atlantic City more competitive while also
bringing financial benefits to New Jersey as a whole.” Delaware and Nevada have also legalized some
forms of online gaming. Fights are expected next year in California,
Pennsylvania, New York and Florida, among other states.
People
familiar with Adelson’s effort said his team is preparing to hire lobbyists
when necessary in numerous state capitals.
His Washington effort to push for a congressional ban will be directed
by a team of lobbyists from two high-powered firms, Patton Boggs and Husch Blackwell,
according to people familiar with the effort.
One person involved in the planning said that lobbyists have met with
“dozens” of congressional offices and that some lawmakers are circulating draft
legislation to stop all online gaming and direct the FBI to study potential law
enforcement issues related to the practice. Adelson has also retained a GOP
polling firm, the Tarrance Group, which this month produced a survey showing
that about seven in 10 voters have negative feelings about Internet gambling —
a finding that Adelson’s rivals dispute.
Adelson will
fly to Washington as soon as January to meet with lawmakers. The three former elected officials on
Adelson’s payroll — Webb, Lincoln and Pataki — will be dispatched to deliver
speeches and write op-eds highlighting the threats that online betting poses to
the public. Pataki is expected to
emphasize law enforcement concerns, including the risks of money laundering and
fraud. Lincoln will address threats to children and families. Webb said he would speak to mayors about the
potential for lost revenue when taxpayers go broke by gambling on their mobile
devices. He said he would encourage civil rights leaders to join the
coalition. On his partnership with the
country’s biggest GOP benefactor, Webb said he saw his decision as a pragmatic
one. “I don’t believe this issue is
about him, because if it was about him, I wouldn’t do it,” Webb said. “Unlike
where he was in the presidential, he’s on the right side of this issue.”
Rivals For Prince George’s Casino License Make Their Cases To Md. Commission
(By J. Freedom du Lac, Washington Post, 26 October 2013)
The three
gambling operators trying to win a coveted casino license in Prince George’s
County made their formal, chest-thumping pitches last week. Now, the seven
members of the Maryland Video Lottery Facility Location Commission will
consider the bidders’ projections and promises and do some due diligence before
picking a winner. The high-stakes prize:
permission to build a Las Vegas-style resort in a part of Maryland near
Washington and Northern Virginia — a destination property that could generate
more than $1 billion a year in gross gambling revenue, according to one
applicant’s public analysis.
A decision
on whether the state’s sixth and final casino license will go to MGM Resorts
International, Penn National Gaming or Greenwood Racing is likely to be made
before Christmas, said the commission’s chairman, Donald C. Fry. But he said
that in awarding each of the state’s first five licenses, the commission had
only one applicant left at this point in the process and, therefore, finds
itself in unfamiliar territory. “This is
the first time it’s been truly competitive at the decision-making stage, which
is what the legislature always intended to have,” Fry said. Considering
multiple proposals “complicates things,” said Fry, a former Democratic state
senator who was appointed to chair the commission by Gov. Martin O’Malley (D)
in 2008. “I shouldn’t say ‘complicates,’ but it changes the dynamic.”
On Friday,
the last day of presentations, Fry was visiting one of the three sites proposed
by the three competitors: a dusty gravel parking lot overlooking the Potomac
River near the Woodrow Wilson Bridge that MGM Resorts International would like
to transform into a gambling mecca. By the summer of 2016, the 23-acre site
could house MGM National Harbor, a $925 million casino that would have 3,600
slot machines, 140 gaming tables, a 300-room hotel tower, several celebrity
chefs, a concert theater, a spa and other amenities. Traffic
rumbled past on the nearby Capital Beltway as men and women in dark suits
crowded around architectural renderings and models of MGM National Harbor, a
dramatic, national monument-inspired property that would have its own
reflecting pool. “I have to win this, or
my wife will kill me,” MGM Resorts Chairman Jim Murren joked. “She’s from
Maryland.”
The Prince
George’s casino license was approved by Maryland voters in November as part of
a dramatic expansion of gambling in the state, including the addition of
live-action table games and 24-hour casino operations. MGM spent
more than $40 million to push for the referendum’s passage. Penn National Gaming spent more than
$42 million to fight the plan, most likely to protect the profits of the
company’s cash cow, Hollywood Casino in Charles Town, W.Va., according to
analysts. Now, with gambling revenue falling significantly in Charles Town, the
casino has been laying off dealers and taking some of its table games offline.
The director of the West Virginia Lottery told
reporters last week that the casino’s woes are directly related to
Maryland’s gambling growth. The news
came as Penn National officials appeared before the Maryland commission to
present a proposal for a $700 million Hollywood Casino at Rosecroft
Raceway, with 3,000 slot machines, 140 table games, a 258-room hotel, a
convention center and a new grandstand for Rosecroft’s historic harness-racing
track.
On
Wednesday, an affiliate of Greenwood Racing made a pitch for a $761 million
Parx Casino Hotel & Spa on what is now a 22-acre wooded lot in Fort
Washington. The company proposes to install more slot machines (4,750) and more
table games (170) than the other operators.
The Parx
proposal includes a $100 million pledge to fund improvements to
traffic-choked Indian Head Highway. Greenwood also offered to pay a
67 percent slots tax, which is 5 percent higher than the
state-mandated rate. MGM and Penn would keep the rate at 62 percent. Penn made a splash with
its own proposal by promising to turn over all of its profits, in
perpetuity, to benefit the county health-care system as well as a new
retirement benefit for teachers and other community organizations and nonprofit
groups. The total giveaway, over the first 15 years of operation, would be well
over $300 million, the company said. During
MGM’s presentation to the commission, at the Friendly High School auditorium,
Commissioner D. Bruce Poole asked whether the company is considering anything
similar. “Thank God, no,” Murren said.
“I thought that was a very clever headline. But I’ve spent too much time on
Wall Street to be snookered by that one.”
MGM, he
said, was proposing to invest more money in the county and state than the other
applicants, and it would generate more property tax and gambling revenue, in a
better location, with the fewest traffic concerns and the best marketing
outreach. It would also open the nicest of the three proposed casinos, he said,
run by the company with the strongest brand. “We are the preeminent operator,”
Murren said. “I think there’s no doubt of that.” All the boasting and most of the
bid-sweeteners may not matter much while the unpaid commissioners deliberate, said
James Karmel, a casino analyst at Harford Community College in Bel Air, Md.
“The commission has a quite specific set of criteria laid out by the state
that’s heavily weighted on the business model,” Karmel said. “There are other
factors, but it comes back to the potential for these proposed casinos to
produce revenue.”
By law, 70 percent of the commission’s decision should
be based on “business and market factors.” There are nine in all, including
having “the highest potential benefit and highest prospective total revenues”
for the state and the likelihood that the casino “will be a substantial
regional and national tourist destination.” Economic-development
factors account for 15 percent of the evaluation factors, with
infrastructure and community impact making up the other 15 percent. But the most interesting “percentage” of the
week could prove to be 67. The Parx offer to pay a higher slots tax than the
other applicants would result in an additional $30 million in annual tax
revenue, a company spokesman said. The
commission is allowed to negotiate with the applicants, who, in turn, can
submit revised proposals. But the odds are probably against the commission
asking MGM Resorts or Penn National to revise their tax rates, Karmel said. “It would be remarkable for them to play off
the different bidders like that. I don’t think the commission wants what would
amount to a bidding war. It could get very complicated and make what’s already
a challenging process even harder and maybe lead to legal issues.” Still, Karmel said, what the Parx group is
proposing “really says something about the potential profitability of this
license.”
A market
analysis commissioned by the Greenwood Racing group showed that by the third
year of operation, a Parx casino in Fort Washington would generate
$812 million in gross gambling revenue on the low end and
$1.02 billion on the high end. MGM
officials said their “conservative” third-year projection was about
$650 million. Maryland Live, which opened in Anne Arundel County in
mid-2012 and is currently the state’s largest casino, is projecting $621
million in gross gambling revenue for the current fiscal year, according to a
document sent to the state Lottery and Gaming Control Agency this month. The state location commission has hired
consultants to do a financial analysis.
National
Harbor Casino Site Gets Most Support From Prince George’s Residents
(By Luz Lazo, Washington
Post, 26 October 2013 )
When it was
time last week for the public to weigh in on the three proposals under
consideration for a casino license in Prince George’s County, one appeared to
enjoy, by far, the greatest support among community leaders and other
residents: the one for MGM National Harbor.
At public hearings before a state commission, many residents said
National Harbor was the best fit because it is removed from residential
neighborhoods and is an established commercial and employment center. “National Harbor is already an entertainment,
shopping, tourist and convention destination. It makes sense to put this venue
there,” said Zeno W. St. Cyr II, president of the Riverbend Citizens Homeowners
Association in Fort Washington. “If the lottery commission selects the National
Harbor site, then that would only further enhance the property as the economic
engine that it already is and will only create an even larger employment hub in
this part of the county.”
The three
sites under consideration for Maryland’s sixth casino are within five miles of
one another in an area of southern Prince George’s County where residents have
long grumbled about limited job opportunities, shopping and entertainment. And all three are trying hard to curry favor
with the locals: Penn National Gaming has
promised to return “100 percent of its profits” from a $700 million casino
at Rosecroft Raceway to the Prince George’s County community. Greenwood Racing
offered
to pay for $100 million in improvements to Indian Head Highway if the
state approves a $761 million Parx casino in Fort Washington. And MGM
announced that Radio One owner Cathy
Hughes and her son would invest $40 million in a $925 million casino
overlooking the Capital Beltway at National Harbor, adding a prominent African
American stake to MGM’s proposal.
At the
hearings of the Maryland Video Lottery Facility Location Commission, some
residents spoke against gambling in general. A few argued for Penn
National and Parx, saying their proposals would bring much-needed economic
development. Others said they found the Penn National and Parx
promises hard to believe. Still others
asked the panel to protect their neighborhoods and historic districts. They
said their biggest concern was that the state pick the site that would have the
least effect on their residential lifestyle. “I think it
is going to be a big, gaudy building on Indian Head Highway,” said Ron Weiss, a
retired Air Force officer who has lived in Fort Washington for 30 years and who
testified against the Parx proposal. “It just clashes with what we are used to
and what we came here for.”
National
Harbor, a 300-acre mini-city on the banks of the Potomac River, has the
infrastructure needed for a casino at a location near interstates 495 and 295,
its supporters said. A casino there, they said, would be convenient for them without
encroaching on their back yards. National
Harbor “is the best location. It is the most accepted we have locally,” Del.
Jay Walker (D-Prince George’s), told the panel Wednesday during the hearing on
the Parx proposal. He said that at public meetings he held on the casino
proposals, most residents surveyed expressed a preference for the National
Harbor site. Residents and county
officials said voters who supported the expansion of gambling in Maryland
in last year’s referendum were under the impression that only two sites
would be competing — National Harbor and Rosecroft. At
Rosecroft, limited transportation infrastructure is a problem, some
community leaders said. They said the site is about a mile from the nearest
I-95 exit and is reached by way of a two-lane road through a residential
neighborhood. Although they would like to see the area revitalized, they were
skeptical that a casino is the right option.
The Parx
site is near the Livingston Square Shopping Center in one of the most congested
areas of southern Prince George’s. Residents said adding a casino would
exacerbate traffic congestion along Route 210, also known as Indian Head
Highway. Others said the Parx site is too close to the Broad Creek Historic
District, which has been prone to flooding. And it is near a 300-year-old
church that has no desire to have a casino as a neighbor. A casino “directly across from St. Johns
Episcopal Church, established on this site, worshiping God since 1692, is as
morally insensitive, reprehensible and repulsive as proposing to put a brothel
there,” the Rev. Marc Lawrence Britt, rector of the church, told members of the
committee Wednesday. The Rev. Pastor
Claudia M. Bias, pastor of the Redeemers House of Worship at Fort Washington
Road, also took a stand against a Parx casino. “We do not need gambling,
period,” she said to applause from the packed auditorium. “However, since the
community voted for it, it should be at the Harbor.”
A few
residents expressed support for the Rosecroft and Parx plans, with some citing
the need for improvements in the areas around National Harbor. They complained
that the waterfront development’s success has not benefited nearby
neighborhoods. “Give these guys a
chance,” said Edward Matthews, a business owner who lives near the
proposed Parx site. Matthews welcomed Greenwood’s pledge to fix the traffic
problem on Route 210. “They are going to help us,” he said. The Town Council of Forest Heights and Mayor
Jacqueline Goodall have been among the most notable opponents to a casino at
National Harbor. The council issued a resolution opposing the National Harbor
site, about a mile away from town. In public appearances, Goodall, a supporter
of the Rosecroft plan, said a casino at National Harbor would increase crime
and bring more traffic to the area.
Still,
several groups said they prefer the National Harbor location because it is more
isolated from residential communities and is designed to accommodate high
levels of traffic. The Greater South
County Coalition for Absolute Progress, expressing support for MGM, called
National Harbor a major employment hub and an economic engine for Prince
George’s. Business groups and labor unions that support MGM Resorts say it
would bring thousands more jobs to a booming employment center located near the
District. About 6,000 people work at
National Harbor in stores, restaurants, hotels and conference accommodations.
Tanger Outlets at National Harbor is expected to add about 900 jobs when it
opens next month. The Indian Head Highway
Area Action Council, which represents several civic, citizens and neighborhood
groups, said in written testimony that MGM’s plan is the “least harmful of the
three applicants” and that a casino at National Harbor “would generate greater
customer traffic and therefore greater overall revenue for the State and the
County than the other proposed sites.”
Atlantic City’s Losing Streak, As More States Compete For Gambling Revenue, Jobs
(By J. Freedom du Lac, Washington Post, 19 August 2013)
The
billboard hard by the Atlantic City Expressway is supposed to speak for a
single casino, not an entire company town. But Revel Casino Resort’s marketing
slogan resonates loudly throughout this struggling seaside resort. “Gamblers Wanted,” it says. And how. Atlantic City, the erstwhile East Coast
gambling mecca, is on an epic losing streak; over the past six years,
competitive and economic forces have crushed the local casino economy, driving
revenue down more than 40 percent. Once,
the city that inspired the board game Monopoly had its own gambling monopoly on
this side of the country. Now, it’s more Marvin Gardens than Boardwalk, with
states from Maryland to Maine lining up to join the high-stakes game for tax
revenue and middle-class jobs. In 2006,
when gambling in Atlantic City reached record levels, there were 27 commercial
and tribal casinos, slots parlors and racetrack casinos in the Mid-Atlantic and
Northeast, according to the University of Massachusetts at Dartmouth’s Center
for Policy Analysis. Now, there are 55 — with more casinos coming in Maryland,
Pennsylvania and Massachusetts.
Pennsylvania, which first allowed casino gambling in 2006,
surpassed New Jersey last year as the second-largest U.S. gambling market
(after Nevada), with players choosing convenience (a single casino close to
home) over critical mass (there are a dozen casinos in Atlantic City, that
state’s only gambling locale). In
Maryland, which has embarked on its own massive gambling expansion, casino
revenue tripled in the latest fiscal year. Thirteen months after opening,
Maryland Live Casino — which has hired dozens of dealers and gaming supervisors
away from Atlantic City — rivals the ocean resort’s biggest player, Borgata
Hotel Casino and Spa. In July, Maryland’s largest casino collected $52.4
million from its slot machines and table games, compared with $64.2 million at
Borgata. This month, the Arundel Mills
casino will open a 52-table poker room that analysts say is likely to pull even
more business out of Atlantic City. As if to punctuate the shifting fortunes,
poker at Maryland Live will launch Aug. 28 just as the opulent if oft-empty
poker room closes at Revel, a $2.4 billion beachfront property that filed for
bankruptcy less than a year after it opened.
There are still profits being made around Atlantic City,
where the first casino opened on the historic boardwalk 3 1/2 decades ago. But
the barrier-island town has been losing its lifeblood business at a
breathtaking clip. In 2006, gross gambling revenue here was a record $5.2
billion. The total has gone down every year since; in 2012, the number was
barely over $3 billion — the lowest mark since 1991. “The situation there has become
catastrophic,” said Steve Norton, a gambling analyst with a long history in
Atlantic City, where he opened the first casino, Resorts International, in
1978. (His son, Robert Norton, runs Maryland Live.) And the outlook isn’t any better this year,
even as surveys suggest Atlantic City’s image is improving: In the first half
of 2013, gambling revenue was off by nearly 11 percent.
Officials tout increased luxury-tax and occupancy-tax
revenue, which indicate increased spending on non-gambling activities and
attractions and on lodging in roughly 20,000 rooms. But Atlantic City is a
gambling-dependent city with a gambling-based economy that is shrinking
rapidly. “It’s dismal,” said David G.
Schwartz, director of the Center for Gaming Research at the University of
Nevada at Las Vegas. “They have serious issues.” And more threats loom. In November, New
Yorkers will vote on a major casino-expansion measure.
One recent morning, in the shadow of the Trump Taj Mahal,
men and women in suits went about the work of saving Atlantic City. “What we need to do is try to rebrand and
reimagine Atlantic City as a national destination,” said John Palmieri, who was
appointed by New Jersey Gov. Chris Christie (R) to run the Casino Reinvestment
Development Authority. Christie has
called the city’s revitalization “a key priority” of his administration. His
photo is displayed in the lobby of the converted firehouse, where state
employees have been tasked with turning his bet into a winner. Legal sports books at casinos and horse
tracks around the state could help. New Jersey voters approved a sports-betting
measure in 2011, but it was blocked by a federal judge. The state has appealed. Palmieri’s agency is not directly responsible
for improving gambling revenue. Instead it focuses on making Atlantic City a
more attractive place to visit and on trying to gin up more convention and
meeting business. (Atlantic City has just a tiny fraction of the $16 billion
meetings market in the Northeast, according to the reinvestment authority.) “We need market,” said Tom Ballance, the
president and chief operating officer of Borgata, where revenue has declined at
a more modest rate than most other Atlantic City properties.
More than 27 million people visited Atlantic City last year,
according to South Jersey Transportation Authority estimates. But blight and
crime have been scaring visitors away, Palmieri said. So the reinvestment
authority, which takes a cut of gambling revenue from the casinos to fund its
efforts, has been trying to clean up the city by knocking down eyesores,
opening neighborhood parks, adding art installations and new landscaping and
underwriting commercial and residential projects. “We need to make it more inviting and give
people a sense of comfort,” Palmieri said. “We are trying to make a statement
to people who haven’t visited Atlantic City for years because they think it
isn’t safe.” Reality hasn’t fully
cooperated: Shortly before Memorial Day last year, two Canadian tourists — an
80-year-old woman and her daughter — were stabbed to death in broad daylight
near Bally’s Casino.
Wander too far from the casinos now, and you’ll quickly be
reminded that it’s been years since Atlantic City was a prosperous place.
Revel, an eye-popping glass high-rise that screams Las Vegas luxe, is close to
a run-down housing project. There’s a soup kitchen next to the reinvestment
authority’s parking lot and a methadone clinic nearby. Pawn shops are
everywhere. Nearly a third of the 40,000
residents here live below the federal poverty line, and the homeless problem is
serious enough that the reinvestment authority runs daily sweeps beneath the
boardwalk to flush out guests from “the Underwood Hotel,” as some locals call
it.
Still, there are signs of improvement all over Atlantic
City, most significantly on the boardwalk, which has been cleaned up — and
opened up by the casinos, some of which once limited physical and visual access
to the waterfront in an effort to keep customers inside. At Resorts, where ocean-facing windows were
once covered with brick, the new Jimmy Buffett’s Margaritaville restaurant
spills onto the boardwalk, across from the Landshark bar, where a song by Kenny
Chesney was blaring on a recent afternoon.
Hundreds of people were on the beach near the bar. “You never used to see that,” said Don
Guardian, director of the reinvestment authority’s special improvement
division. “People went for the casino, not for the resort.”
The changes will be showcased in September when the Miss
America pageant returns to its birthplace for the first time since moving to
Las Vegas in 2006. Earlier this month, in anticipation of the pageant’s
homecoming, a crew was replacing the sidewalks around Boardwalk Hall, which was
glistening after a power wash. Miss
America was a marketing gambit itself, cooked up to sell the idea of Atlantic
City as a year-round resort (or at least one that didn’t shut down after Labor
Day). With the pageant’s return, that message can be reamplified along with another,
more urgent one: Atlantic City is back, with more to do than ever. (In reality,
Atlantic City never went anywhere — not even after Hurricane Sandy, which blew
through without much incident.)
There are more nightclubs, more restaurants, more concerts,
more burlesque shows, more shopping, more outdoor activities, more walkable
spaces, more stuff, including beach volleyball courts and a high-tech light
show that’s beamed onto the backside of Boardwalk Hall every night. “We’re trying to change the old perception
that there’s not enough to do here,” said Liza Cartmell, president of the
Atlantic City Alliance, a casino-funded nonprofit organization that’s
responsible for the city’s marketing. A “Do AC” campaign is being pushed
aggressively up and down the East Coast. In Baltimore, an important secondary
feeder market, the Atlantic City Alliance is spending nearly $2 million on
advertising in 2013. According to the
most recent internal research, positive perceptions of Atlantic City are on the
rise. “We’re making progress,” Cartmell
said. But her bosses — the eight casino executives on the Atlantic City
Alliance board — probably won’t be applauding her at a meeting anytime soon.
Gamblers still wanted, she said. “They
won’t be happy until they see their gaming revenues go up.”
Beating Down The Wall For Poker
(By Chris Korman, The Baltimore Sun, 11 July 2013)
Maryland
Live Casino officials pounded through a wall near the facility's high-stakes
slots and table games rooms Thursday, revealing the construction going on inside
a 14,800-square-foot addition that will open next month with 52 poker tables. The ceremonial sledge-hammering marked the
public introduction of poker director Mike Smith, a 20-year-veteran who has
been chatting with area poker players in online forums. He has sought their
feedback on how the room should be run — from which games should be played to
how tournaments should be structured — and is working through final details. "We'll have a really good room as far as
the service and the consistency of the play and the comfort — comfort's
important," said Smith, who spent the past six years running the poker
room at the Isle Casino in Pompano Beach, Fla. "There should be something
here for everyone."
Shortly after 10:30 a.m., Smith and other casino executives
aimed a few whacks at drywall that had been cut along the sides, allowing it to
fall open and revealing the two-story structure — and the workers building it.
The facility has been added on to the part of the Hanover casino that faces
east over Arundel Mills Circle, toward a wooded area. Maryland Live's much-anticipated poker room
is scheduled to open at noon Aug. 28, pending approval by state regulators. It
will offer 27 tables and a bar on the first floor and 25 tables on the top
floor, which often will be reserved for tournament play. "It's going to be packed for a
while," said Brian Bohlayer, a Baltimore-area teacher who runs the website
Maryland Poker Connection. "And that's what players want. It's shaping up
to be the sort of place we've hoped for."
Smith said the casino's first tournament affiliation would
be with the Players Poker Championship. Starting Sept. 2, players will be able
to enter $60 buy-in events during the week for a chance to play in $520 buy-in
tournaments every Sunday, where a $5,000 prize package will be at stake.
Winners receive a $2,500 buy-in at the 2013 PPC Aruba World Championship in
October — with a guaranteed $200,000 prize pool — another $550 buy-in for a
$40,000 pool and six nights at a hotel plus $360 toward travel expenses. Smith, who also serves as director of the
Aruba World Championship, said play at Maryland Live should meet local players'
demands. The poker room will feature tableside food service, and massages will
be offered for players. The casino is evaluating ways to make sure there are
plenty of charging stations available for cellphones and iPads.
A reasonable rake — the amount the casino keeps from each
hand — and tournament fee structure will be the most important factors for
local players, Bohlayer said. "Showing
that you're going to give a little back to the player is important," he
said. "That's got to do with the structure, but also with rewards programs
and special promotions." Smith said
players will be eligible for rewards through the casino's current tracking
system, but said details must be worked out before he can discuss the program. Bohlayer said Smith's dialogue with players on
the website TwoPlusTwo.com has endeared Maryland Live to the poker community.
Opening the poker room will require Maryland Live, which is
owned by the Cordish Cos., to hire 300 employees, bringing its workforce to
2,700. Smith said about 170 experienced dealers from around the country have
signed on and 70 to 80 more are in training. Poker dealers tend to make more
money than dealers at other tables, he said.
Smith was not prepared to discuss exactly which games will be offered,
saying only that typical versions of hold 'em, Omaha and stud poker would be
offered. The casino is working with the state Lottery and Gaming Control Agency
to gain regulatory approval for the games.
Smith said he took the job at Maryland Live because he had never
overseen the construction of a poker room. He said he's been in touch with
professional players — 2012 poker player of the year Greg Merson is a former
University of Maryland student and Laurel resident, and Olympic swimming star
Michael Phelps' roommate, Jeff Gross, also is a pro — about possibly serving as
ambassadors for the casino but that no partnership has been established.
Maryland Live is by far the state's largest casino, paying
about $1 million per day in taxes. Table games are taxed at 20 percent; 67
percent of slots revenue is turned over to the state. Though some slot machines
have been out of play during construction, the casino eventually will have more
than 4,300 available, equaling the number on the floor before the addition of
the poker room.
Mid-Atlantic
Casino War
(Baltimore Sun, July 6, 2013)
When
Maryland was first contemplating legalizing slot machines, supporters pointed
to Delaware and the success of its "racinos" — racetracks with slot
machine gambling — and how they drew in thousands of Maryland residents each
year. Turns out there was something to that observation, because it appears
those patrons are now sorely missed. The
latest reports on 2012 gambling revenue from the First State show that the
opening of Maryland Live Casino has had a staggering effect on Delaware's three
racetrack casinos. Collectively, they saw a $217 million drop in revenue, or
5.5 percent. Across the United States,
only New Jersey suffered a worse one-year decline in gambling revenue, with an
8.2 percent reduction in 2012.
With the addition of table games in Maryland, however, the
situation for Delaware has gotten even more dire. In the first half of 2013,
Delaware slot machine revenue alone is down more than $47 million from the same
period in 2012. It's gotten so bad that Gov. Jack Markell and state lawmakers are
considering making a one-time $8 million payment to the operators to help avert
layoffs.
The simple lesson in this is that casino gambling is not a
bottomless source of riches. It is a market governed by the same principles of
supply and demand as any other. State-sanctioned gambling is quickly reaching a
saturation point in the Mid-Atlantic region, with the growth of casinos in
nearby Pennsylvania as well as Maryland.
Now Delaware lawmakers are facing pressure to lower the state's tax rate
on slot machines from the current 43.5 percent. The competition has also pushed
Delaware to be among the first states in the nation to embrace online gambling,
an expansion that's scheduled to go into effect by Sept. 30. Maryland's decision to create a sixth casino
in Prince George's County also caused
lawmakers to allow for an eventual reduction in the tax rate on slot machines
as well as to authorize table games — at a tax rate that is more favorable to
operators. That's given casino owners a powerful incentive to invest more in
table games than in slots.
And the impact of that on gambling revenue is likely to be
profound. Last month, Caesars Entertainment received approval to open its
Horseshoe Casino in Baltimore next year with 2,500 slot machines instead of the
3,750 it had originally proposed. Meanwhile, it will have 100 table games and
30 poker tables. Considering that the state's Education Trust Fund currently
receives nearly half of every dollar spent on slots (a rate that is among the
highest in the country) but only 20 percent of the revenues generated by table
games, that's not particularly good news for the financing of K-12 education.
It may mean more jobs at the casinos and higher profits for Caesars and other
casino operators, but purely from the tax collector's perspective, it's
worrisome.
June's casino revenues provide our first apples-to-apples,
year-over-year comparison of what life may be like in Maryland's table games
era. Factoring out Rocky Gap (which only opened in May) and adjusting for the
fact that Maryland Live opened on June 6, 2012, total Maryland gambling
revenues were up almost $15 million in June over the prior year. The casinos
got 78 percent of that new revenue, and the state only 22 percent. Allowing
table games may have made our casinos more attractive in the regional gambling
marketplace, but it has also partially shifted the state from the part of the
business in which its profit margins are highest to one in which they are much
lower. How that picture will change as we add more Central Maryland casinos —
and eventually lower the tax rate on slots as a result — remains to be seen.Maryland has much going for it that Delaware does not — chiefly, the proximity of gamblers in the populous and wealthy Baltimore-Washington region. And it appears to have been wise to look beyond racinos, as horse racing is hardly a major attraction for casino gamblers. But it is clear that gambling revenue will never be guaranteed from year to year. Like its neighbor to the East, Maryland will be hard-pressed to hold onto its casino market share and those gambling tax revenues in the years ahead.
http://www.baltimoresun.com/news/opinion/editorial/bs-ed-delaware-casinos-20130706,0,7342461.story#ixzz2Z3LlrXNi
The State
Busts: How Maryland Is Losing Money On Table Games
(Baltimore Sun, 07 May
2013)
In November,
voters approved a major expansion of Maryland's gambling program on the promise
that allowing table games and eventually building a sixth casino would ensure
that the gambling dollars state residents spend would go toward funding
education here and not in states like West Virginia, Delaware and Pennsylvania.
This week, we got the first preliminary snapshot of how that bargain is working
out, and it should give us some pause.
The Maryland Lottery and Gaming Control Commission reported
its first set of figures since the Maryland Live Casino in Anne Arundel County
added table games. On April 11, that facility, which by many measures is the
dominant casino not just in Maryland but in the entire Mid-Atlantic, added 122
table games to the 4,217 slot machines it operates, and it made for a slight
boost in overall state gaming revenue. The statewide total from slots and table
games was up by more than $900,000. The true picture might be substantially
better than that; last year, April was a much worse month for Maryland casinos
than March, so considering seasonal variations in the casino business, last
month looks pretty great.
Great from the perspective of overall revenue, that is. Not
so great when we consider the reason Maryland got into the gambling business in
the first place, which was to generate money to support K-12 education. In
March, before Maryland Live added table games, the state's casinos sent more
than $28.2 million to the Education Trust Fund. In April, with 19 days of table
games at Maryland Live, the ETF got $26.1 million. Meanwhile, Maryland Live's
share of gambling revenue jumped from $14.7 million in March to $19.3 million
in April. And that's only based on a partial month of table games.
It's yet more confirmation that Maryland's gambling market
is not infinite and that after a certain point, we are doing less to add to the
pie and more to shuffle the pieces around. We saw it last year when Maryland
Live opened and sucked away much of the business from Hollywood Casino in
Perryville, and we saw it again with the addition of table games at Maryland
Live. That development produced some increase in the overall amount gambled in
the state's casinos. But mostly, we have substituted one kind of gambling for
another, and the switch from slots to table games, from the Education Trust
Fund's perspective, is a lousy deal.
The ETF gets 49.25 percent of every dollar spent in slot
machines but only 20 percent of the money gamblers lose on table games. (The
deal is even worse for the ancillary beneficiaries of the casino program: horse
racing purse subsidies and track improvement funds, local impact grants and a
fund for small and minority-owned businesses. Collectively, they get 15.75
percent of slots revenue but nothing from table games.) Casinos get 33 percent
of the money gamblers lose in slot machines but 80 percent of the take from
table games.That's not pure profit, of course. Table games are much more expensive to operate than slots. Consider: Maryland Live added 1,200 new employees to staff 122 table games, effectively doubling its workforce. And as part of the deal, the casinos will eventually be required to purchase their own slot machines. Although they will get an increased share of the proceeds to compensate them, the deal is expected to be a net positive for the ETF. The state surely benefits in other ways. The new permanent and construction jobs from the addition of table games are an improvement over the slots-only scheme. Theoretically, the presence of blackjack, poker, roulette and the like will make the state's casinos a more appealing tourist destination, particularly when new casinos open in Baltimore and just across the border from Washington in Prince George's County. Spin-off economic activity at restaurants, music venues, shops and hotels benefits the public in ways that are difficult to measure.
But this latest report is just one more reason to doubt
whether the massive expansion of gambling Maryland will see in the next few
years will come close to making good on its promise to help schoolchildren. If
and when a casino opens in Prince George's County, the share of slots revenue
kept by the casino owners in Baltimore and Anne Arundel County will go up even
more to compensate them for additional competition, and the share the ETF gets
from table games will go down even more. Unless the Prince George's facility
prompts a significant expansion of the regional casino market, we may find
ourselves with more gambling but less direct benefit to the state.
http://www.baltimoresun.com/news/opinion/editorial/bs-ed-slots-20130507,0,299076.story#ixzz2Z3NbGr3x
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