Making the News

Patriot-News, Harrisburg

Originally Published:Sunday, November 2, 2008

Joseph Weinert, vice president of New Jersey-based Spectrum Gaming Group, said Delaware is more likely to feel the effect of Maryland gaining slot machines than Pennsylvania.

"There might be some impact, but we don't think it's going to be significant," Weinert said.

Maryland likely to OK slots proposal, polls show

By Sharon Smith
Patriot-News, Harrisburg

When Maryland voters go to the polls Tuesday, they will decide whether the home of the Preakness should also be home to 15,000 slot machines.

If the measure passes, Maryland will have five slot venues. Wyomissing-based Penn National Gaming Inc., which opened the Hollywood Casino at Penn National Race Course in Dauphin County last year, is among the gambling companies looking to enter the Maryland market should slots pass there.

If slots pass, Penn National officials want to build a slot parlor that offers 2,500 slot machines to Marylanders and other travelers on Interstate 95 in Cecil County, near the border of Pennsylvania and Delaware. For Penn National, it would represent at least a $125 million investment.

Penn National would be one of many companies looking to offer slots in Maryland. The company would have to go through a competitive bid process before an independent review board, said Eric Schippers, spokesman for Penn National Gaming.

A recent Washington Post poll found that 62 percent of likely Maryland voters said they supported legalizing slots. The slot parlors are expected to generate $660.4 million by 2012, according to ForMaryland.org. About half of the money Maryland takes in from slots would be put into an education trust fund.

In addition to Penn National's proposed casino, the other Maryland slot parlors are expected to be located in: the Annapolis area, Ocean Downs race track near Ocean City and Allegany County in western Maryland.

This year, it seems like legalized slot machines have more than a fighting chance in Maryland. Maryland residents already saw their taxes increase last year and are now facing a budget deficit, which could mean another tax increase or a cut in services.

"What you have this time is a governor who is a supporter of the proposal," Schippers said. "You have a budget crisis in Maryland. That has changed the dynamics."

If the proposal does pass, Maryland slot revenues will be taxed at 67 percent, which is higher than Pennsylvania's rate of 55 percent.

In Maryland, Penn National wants to partner its casino with a retail center that would be developed by someone else, Schippers said. The company envisions that the Maryland casino would be more like an anchor store one typically sees at the mall.

Penn National officials aren't concerned that a Maryland property would be competing with the company's other properties in West Virginia and East Hanover Twp., Dauphin County.

A Cecil County casino would be more competitive with Delaware's casinos, Schippers said. Penn National spent more than $350 million making the Hollywood Casino a state-of-the-art facility. Schippers said it should be able to stand on its own.

"We think that property will be very competitive with gaming in other states," he said.

The Pennsylvania Gaming Control Board has not looked at what impact legalized slots in Maryland would have on Pennsylvania's new industry.

In 2007, Atlantic City, N.J., saw the profit at its casinos drop 9.6 percent after some of Pennsylvania's casinos opened. In the first quarter of 2008, Atlantic City saw its profit plummet even further. They were down by 17.7 percent, according to figures from New Jersey's Casino Control Commission.

Joseph Weinert, vice president of New Jersey-based Spectrum Gaming Group, said Delaware is more likely to feel the effect of Maryland gaining slot machines than Pennsylvania.

"There might be some impact, but we don't think it's going to be significant," Weinert said.

Maryland's tax rate is going to limit the size and the scope of the venues, Weinert said. Ultimately, that's going to be less attractive to Pennsylvania gamblers.

Gov. Ed Rendell is not concerned about Maryland's effect on Pennsylvania's slots, said Chuck Ardo, a spokesman for the governor.

"We believe that our venues are new and exciting and will continue to attract patrons," Ardo said. "We believe that they will continue generating significant revenues for property tax relief."

SHARON SMITH: 255-4152 or [email protected]

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