Maryland voters approved a sweeping expansion of gambling in the state that will mean a new casino in Prince George’s County and the addition of table games there and at Maryland’s five other casinos.
In passing Question 7, voters said that they wanted the money for education and jobs that supporters said would come from an expanded gaming program.They also warmed to the argument that a gaming expansion here would stem the flow of Maryland gaming dollars to West Virginia and other neighboring states that offer table games like blackjack and roulette, an argument made by Gov. Martin O’Malley and others.
The promise of jobs and expanded education funding was touted by MGM Resorts International (NYSE: MGM) CEO Jim Murren after the initiative’s approval.
“No one expected such a vicious campaign, but common sense prevailed and Maryland will certainly benefit from our hard work to fight a campaign of unrestrained distortion.” Murren stated.
MGM Resorts International (NYSE: MGM), which wants to build an $800 million destination-style casino at National Harbor in Prince George’s, spent more than $40 million in support of Question 7.
Opponents of expanded gambling haven’t given up the fight.
Kevin McLaughlin, a spokesman for Get the Facts — Vote No On 7, said in a statement that a “lawsuit has been filed” over the constitutionality of the process.
According to a statement from Vote No On 7, Tuesday’s approval fell “far short of a majority of qualified voters” the organization believes the Constitution requires is needed for an approval of expanded gambling.
“We intend to explore all of our legal avenues as well,” McLaughlin said in the statement.
The campaign — in which neartly $90-million was spent, making it the costliest referendum in Maryland history — pitted two casino industry giants against one another in a high-stakes battle for Maryland voters.
Penn National Gaming, which owns Hollywood Casino Perryville and Rosecroft Raceway, among other casinos, spent more than $42 million to defeat the ballot initiative. Penn National (NASDAQ: PENN) also owns a casino in Charles Town, W. Va., which could lose business if a casino is built in Prince George’s County, analysts said.
The anti-Question 7 campaign, funded by Penn National, advanced the argument that there were no safeguards to make sure the millions in additional gaming revenue would actually increase funding for Maryland schools.
Caesars Entertainment Corp. (NASDAQ: CZR) which was already planning to build a $375 million casino in South Baltimore whether or not Question 7 passed, has said it would build a bigger, more lavish casino, if it could add table games. The company has said it would spend about $25 million more and hire an additional 500 people, up from about 1,200 for a slots-only facility.
The passage of Question 7 saved O’Malley from a potential political embarrassment as he positions himself for what many believe will be a presidential bid in 2016. O’Malley stumped hard for the referendum in the closing weeks, including appearing with MGM CEO Jim Murren at a press conference at Baltimore’s Inner Harbor the day before Tuesday’s vote.
O’Malley had appeared less than enthusiastic about a gaming expansion early on. Some observers said he was less than fully engaged in the issue as the General Assembly debated the topic during the regular General Assembly session. O’Malley also punted the question of whether to call a special legislative session on gambling expansion to a committee that included members of the Senate and House of Delegates.
But after the committee deadlocked, he decided to call a special session anyway. It was during the special session that lawmakers hammered out the bill that put the gaming expansion before voters.
In addition to authorizing a Prince George’s casino and the addition of table games, the bill also cuts the tax rates on some casinos in the state from 67 percent, the highest in the nation, to as low as 49 percent. The question of who gets the license for a Prince George’s County casino now turns to the state’s casino-siting commission. The Video Lottery Facility Location Commission, headed by Greater Baltimore Committee CEO Donald C. Fry, will decide whether to award the license either to MGM or Penn National.