Against Question 7: Gambling expansion is a bad deal for Maryland taxpayers

Our view

October 24, 2012

We support Maryland's slot machine gambling program, and we think it would be wise to eventually expand it to include table games, which would attract additional economic development and create more jobs. It might even be a good idea one day to allow a sixth casino in Prince George's County to take better advantage of the tourist and convention trade in nearby Washington, D.C. But we oppose Question 7, the gambling expansion measure on November's ballot, because it's a bad deal for Maryland's taxpayers.

It is in the state's interest to make sure that any expansion of gambling doesn't cannibalize the business of its existing casinos to the point that one or more of them becomes a white elephant or, worse, goes out of business. The way the state can prevent that is by figuring out how much a sixth casino might hurt the others — principally, the casinos authorized for Anne Arundel County and Baltimore City — and finding ways to compensate those facilities, such as the legalization of table games, the lifting of restrictions on hours of operations and the reduction of the state's tax rate on slots, which is the highest in the region. If it's done right, all of the Maryland's casinos would remain economically viable and the state treasury would reap the benefits.

The trouble is, lawmakers pushed for this gambling expansion before the existing slots program was fully up and running. When legislators considered the matter in August's special General Assembly session, Maryland Live had only been open for a few weeks. So they had little data about how it would perform in the market once the initial excitement wears off. Baltimore's casino was two years away from opening, so they had no idea how that facility will affect the market. And lawmakers' attempt to guess what a new mega-casino in Prince George's County would do amounted to speculation on top of speculation.

Under pressure from Maryland Live owner the Cordish Cos., legislators overcompensated for this problem, agreeing to a massive cut in the tax rate on slots. If Question 7 passes, Maryland Live's slots tax rate, now 67 percent, could drop as low as 49 percent. Baltimore's could go as low as 51 percent, and other casinos — including the one slated for Prince George's County — could see reductions as well.

The result is that about 75 percent of the new revenue created as a result of Question 7 would go to the casinos, not state and local governments. We deserve a better deal. Marylanders should vote down Question 7 and insist that our elected leaders get us one.

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