$50 million bet pays off for MGM -- Gazette.Net


The $50 million that businesses supporting expanded gambling poured into their campaign was only a drop in the bucket when compared with the $800 million that MGM Resorts International wants to spend building a Las Vegas-style destination casino resort at National Harbor.

But that $50 million paid off big Tuesday night, as voters paved the way for a new Prince George’s casino, approving a statewide referendum, 52 percent to 48 percent. The measure authorizes the state to issue a sixth gambling license, in Prince George’s County, and to allow table games such as poker and roulette, plus 24-hour operations, at all slots parlors in the state.

Many businesses are eager for the casino to open. Even though the approved measure doesn’t specify where in the county the casino would be built, the National Harbor location is the front-runner.

“We’re extremely ecstatic for Question 7 passing. It means more tax revenue for the state of Maryland and more business for the area,” said David Spinogatti, managing director of the Fireman Hospitality Group, which owns restaurants Bond 45 and Fiorella Pizzeria e Caffe at the $4 billion Oxon Hill complex on the banks of the Potomac River.

He said he is fully confident that an MGM casino will bring in jobs and contracts for local residents and businesses.

“Starting today, MGM’s talented team of designers and resort experts begin work on our proposal for a great destination resort for the people of Prince George’s County and the State of Maryland,” Jim Murren, chairman and CEO of MGM, said in a statement following the vote. “We stand ready to compete with all comers for this license and the privilege to bring an MGM resort to National Harbor.”

He also praised the voters for choosing “common sense” over a “campaign of unrestrained distortion.”

“Had this measure not passed, we would have missed a once-in-a-lifetime opportunity for incredible investment in our business community,” said M.H. Jim Estepp, president and CEO of the Greater Prince George’s Business Roundtable, which supported the measure. “This is more than just gaming. This is a world-class resort.”

He referred to the $130.5 million in slots revenues that the Maryland Live! casino in Hanover has generated since it opened in June, saying that Prince George’s now has the opportunity to host a similar venue.

“Maryland Live! looks forward to enhancing its gaming offering and is prepared to Go Live! with table games — physical modifications and hiring for over 1,000 new positions — soon after the State issues the necessary governing regulations,” Joseph Weinberg, managing partner for the slots parlor’s owner, Cordish Cos. of Baltimore, said in an email to The Gazette.

The company later revised the number of new jobs to 1,200.

David Harrington, former Prince George’s County councilman and CEO of the Prince George’s Chamber of Commerce, said the MGM casino would complement the development under way at National Harbor. He said the chamber will be at the forefront in ensuring that casino jobs — many of which would be union jobs — are filled by county residents.

The chamber — and labor unions — also supported the measure.

“Hopefully, it provides a true opportunity for Prince George’s,” said Malik Ellis, CEO of Horizon Real Estate Group in Greenbelt. “We haven’t seen anything that requires them to [hire and contract locally]. I think we should we should learn lessons from other National Harbor projects to ensure Prince George’s is a true participant.”

Another prominent county business leader, M.A. “Mike” Little of B&W Solutions in Oxon Hill, added that MGM has shown commitment toward “as many local hires as possible” and recognizes the importance and value of the local business impact.

But one National Harbor business owner also was concerned about the possibility for more crime in the area.

“The harbor does a good job with security, but that’s the sort of thing that comes with casinos,” said Toni Foster, owner of Critique Boutique.

Despite her concerns, Foster said, she believes a casino will bring more money and jobs to National Harbor and that keeping money in the state and the county is “good for us.”

Questions linger

But while many businesses in the state and county are ready to seize opportunities from a new casino, the referendum’s major business opponent is preparing to contest it in court.

“There remains a question as to the validity of the outcome, given a legal challenge that has been filed by an outside group as to what constitutes a ‘qualified voter’ in this election. We’ll be exploring that issue in the coming days,” Karen Bailey, spokeswoman for Penn National Gaming of Wyomissing, Pa., wrote in an email to The Gazette.

Former Prince George’s County councilman Thomas E. Dernoga has questioned discrepancies between the Maryland Constitution and the bill the General Assembly passed in August regarding just how many votes are needed to pass the referendum. The constitution requires a “majority of qualified voters in the state,” while the bill requires only a “majority of the voters in Maryland voting on the question.”

Dernoga, who has referred to the discrepancies as “an issue of plain language,” filed suit over the issue last week in Anne Arundel County Circuit Court.

Penn, the sole donor to the committee opposing the issue, contributed $41.5 million to the anti-casino effort, according to state records. Penn owns Hollywood Casino Perryville, Rosecroft Raceway in Fort Washington and Hollywood Casino at Charles Town (W.Va.) Races.

All told, both the opposing and supporting committees raised a total of more than $92 million for the campaign.

Besides referring to the legal challenge, Penn was disappointed with the results, Bailey said.

“We spent a lot of time, energy and resources to educate votes on the flaws of Issue 7,” she said. “We appreciate all those who stood up against this unseemly back room deal with National Harbor and for those who supported Rosecroft having a fair opportunity to compete for a gaming license in Maryland, and to help secure the long term viability of racing in Maryland.”

Both Gov. Martin O’Malley (D) and Prince George’s County Executive Rushern L. Baker III (D) have supported awarding the slots license to the National Harbor site.

Bailey would not comment on Rosecroft’s future, but Penn officials have said previously that Rosecroft, which Penn bought out of bankruptcy last year, cannot sustain itself without an alternative form of revenue — such as slots and-or table games.

“If the state chooses to sole-source things to National Harbor, that will end the conversation,” Bailey said in August.

Slot revenues fall in October

Meanwhile, revenues have been dropping at Penn’s Perryville slots parlor since Maryland Live! opened in June.

Hollywood Perryville saw its revenues drop to $24.9 million in October from $37.1 million a year earlier, according to new data from the Maryland Lottery and Gaming Control Agency. The take at the Casino at Ocean Downs in Berlin also fell to $3.5 million from $3.8 million in October 2011.

Meanwhile, overall slots revenues dropped to $39.6 million in October from $42.9 million in September. The month-to-month drop is most likely related to the impact of Hurricane Sandy in late October, said Stephen Martino, directory of the Maryland lottery agency.

Martino said that while 24-hour operations will not have a significant impact on revenues, table games could lead to a 10 percent increase at each site.

“It creates a more vibrant atmosphere,” he said.

He also said that as more casinos open in the state, there will be more redistribution of revenues, as has been seen at Perryville.