MGM chosen for Prince George's casino license

Commissioners praise proposed location at National Harbor

December 21, 2013|By Kevin Rector, The Baltimore Sun

Now that MGM Resorts International won the state license to build a casino in Prince George's County, officials say they have no doubt it will become a world-class destination — and a revenue-generating powerhouse for the state.

"I believe this will be the most successful commercial resort outside of Las Vegas," said Jim Murren, MGM's chairman and CEO, shortly after a state commission awarded his company the license on Friday. "I've never seen a site like this."

Analysts agree that the MGM National Harbor casino has major promise — projections are that it could generate hundreds of millions a year in tax revenue — but also that it will compete with Maryland Live at Arundel Mills and the rising Horseshoe Casino in Baltimore.

With its $925 million proposal, MGM beat out two competitors who had also pledged to spend hundreds of millions of dollars on a casino in the same vicinity south of Washington. Penn National Gaming proposed building a $700 million facility at its Rosecroft Raceway harness track in Fort Washington, while Greenwood Racing proposed a $761 million facility off Indian Head Highway.

Donald Fry, chairman of the seven-member Video Lottery Facility Location Commission, said each proposal had "strengths and weaknesses."

During the commission's months-long review of the three proposals, each company tried to convince the commissioners that their project would provide the most benefit to the state — the overarching criteria by which the commissioners were required to make their decision.

Penn National promised hundreds of millions for local health and education systems, and Greenwood offered to help pay for major highway improvement projects.

Some commissioners praised the strengths of the Greenwood proposal, saying it would bring economic development to a new area, not to National Harbor, where it already exists. They also mentioned the draw of backing a project like Penn National's, at a location where horse racing would benefit from development.

In the end, though, Fry and four other commissioners joined in a 5-2 commission vote to pick MGM — largely for its larger investment, promised revenue returns and prime location. The commission also voted to allow MGM to proceed with its plans for a facility with more than 3,000 slots, a cap that existed when the commission put out its request for proposals.

MGM's plans for its hilltop property, adjacent to Interstate 95 and near the Woodrow Wilson Bridge south of Washington, call for 3,600 slots and 140 table games, including poker, in a tiered casino facility. It also will feature a 300-suite, 21-story hotel and spa; seven restaurants, a 1,200-seat theater, 35,000 square feet of event space and parking for 5,000 vehicles.

The project will create an estimated 7,500 jobs, with 4,000 of those directly at the resort, company officials have projected. Consultants for the state projected that the MGM casino will bring in overall annual gambling revenue of $713 million to $719 million, more than what they projected would be brought in by either of the competing proposals.

In its fifth year of operation, consultants estimated, the MGM casino would produce some $374 million in gambling, property, sales, income and hotel taxes.

The MGM project is targeted squarely at potential gamblers from Virginia and Washington. It will also bolster Maryland's ability to challenge neighboring states for gambling dollars, including Pennsylvania, West Virginia and New Jersey, analysts said.

Prince George's Executive Rushern Baker, who'd remained silent about the three proposals during the selection process, said Friday he was "ecstatic" about MGM's winning the license.

"I think MGM's destination resort has the greatest impact, and I think that's good for Prince George's County. But more important, I think that's good for the state," he said. "That's why these facilities are here in the state of Maryland, to generate revenues overall."

Baker said he's confident that MGM will live up to its promises to recruit locally to fill thousands of jobs.

As applause from MGM's backers subsided following the commission's vote Friday, Murren shook hands with other MGM officials, a weight off his shoulders.

Given the amount MGM invested in the project already, a loss would have meant "a nice charge against my earnings," he said.

Listening to the commissioners explain their positions one by one ahead of the vote was "a roller coaster of emotions," he said, but the outcome was thrilling.

Voters approved the measure to allow a Prince George's facility last year amid unprecedented spending of about $80 million from MGM and Penn National to sway their votes. MGM urged passage, in hopes of opening a National Harbor facility, while Penn National urged votes to block a Prince George's facility in hopes of protecting its share of regional gambling at its Charles Town facility in West Virginia.

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