With a two-story, 110,000-square-foot casino slated to begin operation in downtown Baltimore in 2014, the city’s residents have a decidedly more immediate stake in the outcome of ballot question No. 7—an expansion of gaming—than many other Maryland voters.
The referendum question asks voters to consider whether to add Las Vegas-style table games such as roulette and poker to the state’s casinos, increase the facilities’ operating times to 24 hours and build a sixth gambling parlor in Prince George’s County.
Proponents of the law say Baltimore stands to reap substantial benefits, particularly economic, from an expansion of gaming.
“There’s a possibility here for a win-win-win,” said Anirban Basu, chairman and CEO of Sage Policy Group, an economic and policy consulting firm in Baltimore. “The local government’s interests, the state government’s interests, the business community’s interests and the casino owners’ interests are all aligned here.”
An expanded gaming facility in Baltimore would garner additional tax revenues for the state. The casino, Harrah’s Baltimore, will generate about $400 million in its first year, officials said.
The city government, however, could benefit from permitting and associated fees during the development phase of the casino, its 3 percent cut of all casino revenues, plus piggyback taxes from the state, increased payroll and real estate taxes and more.
“To the extent that the state of Maryland the City of Baltimore is able to collect additional revenues, the facility will drive local and state spending and more investment in infrastructure,” particularly education, Basu said.
As written in the statute, 48.5 percent of slot machine and 15 percent of table games revenue will flow directly into the state’s Education Trust Fund. And, according to the Department of Legislative Services, that could mean about $199 million per year.
For Baltimore, a city known for a dismal public education system characterized by crowded classrooms and dilapidated school buildings, the extra funding could be critical, supporters of the bill say.
According to the law, the city will realize $1.7 million per year in additional funding for school construction if Question 7 passes.
But, the extent of those gains depends on the outcome of Question 7.
“The presence of table games has a significant role on the economic viability of the [casino],” he said, then continued, “If Question 7 fails, Baltimore would have another slots facility. And while it could have an impact [economically], it would have to compete with other slots facilities in the city.”
Earlier this year the state's Video Lottery Facility Location Commission awarded the license for the Baltimore casino to CBAC Gaming, an affiliate of Caesars Entertainment Corp. The planned $310 million facility would operate 3,750 slots on Russell Street south of M&T Bank stadium.
Caesars President John Payne reportedly told city officials this week, however, that should Question 7 pass, the casino would boost its hiring from 1,200 to 1,700 jobs and the company would increase its investment to $400 million – adding table games, more restaurants and enlarging its special events facility, the Baltimore Business Journal reported.
An entertainment hub of this nature could energize the local tourism industry, casino developers and economic experts said.
“One could imagine many well-heeled tourists coming to Baltimore to a [gambling] facility near downtown and near associated amenities. One could imagine more conventions would have another reason to come to Charm City as their stakeholders would have one more option to use their free time,” Basu, the economic analyst, said.
“Out-of-state dollars increase the size of the local economy…. that’s the true source of economic growth. [And] the propensity of out-of-state residents to come to Baltimore depends on the presence of table games and the attractiveness of the facility.”
Local businesses stand to gain significantly from increased tourism and the project in general and the casino’s African-American investors are aiming to ensure that minority businesses get their piece of the pie.
“It’s truly important that when developments like this come through the city and state that minority businesses, particularly African-American-owned businesses, are included because they are such a large part of this community,” said Maria Beckett, president of the Presidents’ Roundtable (PRT), group of African-American presidents and CEOs dedicated to accelerating the growth of Black-owned businesses.
Beckett, a former information technology executive, is joined by Baltimore investor Eddie C. Brown, financial executive Cecil Flamer, financial consultant James Scott Jr. and the A&R Development Co. as the Black investors in Harrah’s Baltimore.
“At PRT TWO we have the role of identifying minority businesses in Baltimore and Maryland to work with the casino project during the development phase and after it begins operations,” Beckett added. “We’re very proud of the benefits we will bring to minority businesses in Baltimore and Maryland.”
The presence of African-American principals in the project also brings additional benefits to the local Black community through their philanthropic investments, added Theo Rodgers, president of the Baltimore-based A&R Development Co. “When we do well we make sure to give something back to the city,” he said.
While the benefits of expanded gaming in Baltimore may be many, negative impacts such as increased levels of crime and personal bankruptcies, could be expected as well, experts say. And, state and local spending directed toward mitigating these effects could increase.
But, in the case of the Baltimore casino, Rodgers said, “The positives far outweigh any potential negatives.”