Governor, Legislative Leaders Call Gambling Special Session

UPDATED (2:57 p.m.)—Gov. Martin O'Malley Friday announced he will call the General Assembly back to Annapolis for a special session on the issues of gambling and the creation of a sixth casino.

"This is an issue about jobs," O'Malley said. "This is an issue about maximizing revenues from gaming."

A bill was not available at the time of the morning news conference. O'Malley said it needed tweaking and would likely be made public shortly before the beginning of the special session.

O'Malley, House Speaker Michael Busch and Senate President Thomas V. Mike Miller all said the bill would create about 2,500 jobs from the legalization of table games and generate $100 million for schools.

Sen. E.J. Pipkin Friday afternoon blasted O'Malley for calling the special session.

“The state is bleeding jobs at a rate of tens of thousands on a monthly basis, and the best the Governor O’Malley can muster is, ‘If you give me another casino, I can get you 3,000 jobs in a few years’" Pipkin said in a statement. "How is that relief?"

Pipkin, an upper Eastern Shore Republican, called this "the ‘Summer of Union Handouts’ with teachers’ unions getting their own special session in May and now the trade unions getting their own special session in August.  Curiously left out are the close to 2,000 union steelworkers laid-off last month at the Sparrows Point plant.”

As part of the bill, Prince George's County voters would still have the ability to decide if they want a casino in their jurisdiction. National Harbor has been considered the odds on favorite for a facility. MGM Resorts has already staked out an interest in that site.

O'Malley said the bill will also contain provisions for table games. That provision would become law if approved in November by state voters even if Prince George's County voters reject a casino in their jurisdiction.

One sticking point that has yet to be decided is the tax rate charged to casino operators—currently set at 67 percent. Current casino operators who built business plans on the expectation of just five regional facilities may want that rate reduced to compensate for potential loss of revenue due to competition.

Local governments would be concerned about reductions in the rate because it could reduce the amount available for schools.

David Cordish did not immediately respond to a request for comment but instead issued a statement Friday afternoon.

In that statement, Cordish said that 47 percent of the revenues generated at his Maryland Live facility in Arundel Mills come from the Virginia, the District of Columbia, Prince George's County, and Montgomery County areas—the customer base for the proposed National Harbor site. Cordish estimates that the National Harbor site would also diminish revenues at the yet to be built Baltimore slots facility.

"Oversaturation is real,"" Cordish said in his statement. Maryland Live! has been partially open for two months and even in its unfinished state, it has decreased the revenue in Perryville almost 25% and Perryville is located 52 miles from Maryland Live!  National Harbor is located considerably closer to Baltimore City and Maryland Live! than is Perryville."

Cordish added that a new facility in National Harbor, combined with other casinos in neighboring jurisdictions means "the equation can't possibly work for the State of Maryland or the casino operators.  It would be unprecedented in the U.S. at a tax rate remotely approaching 67 percent.  In the two areas of the U.S. with this kind of concentration of machines, Las Vegas, and Atlantic City, the tax rate is 6.75 percent and 8 percent respectively."

O'Malley said both the casino operators and local governments would be protected. He hinted that the General Assembly might adjust the rate later, but that it would not be dealt with in the bill that will be made public in the next two weeks.

The bill is expected to pass easily in the Senate but passage in the House, which has not traditionally supported gambling, is unclear.

Leaders of the Baltimore City delegation have maintained that they are concerned about the effects that a sixth casino will have on a proposed facility in their jurisdiction and money set aside for city schools.

It is not year clear that leaders have the 71 votes needed for passage in the House.