Sunday, July 14, 2013

Gambling On The East Coast

MGM National Harbor Casino Announces Dec. 8 Grand Opening
(By Arelis R. Hernández and Luz Lazo, Washington Post, 03 October 2016)

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.

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.

Maryland Amateur Gets To Test Himself Against The Pros
(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 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,, 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 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.,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.,0,299076.story#ixzz2Z3NbGr3x

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