Penn National puts up $5.5 million to defeat gambling expansion in Md

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Casino giant Penn National Gaming Inc. threw down $5.5 million last week to defeat a November referendum on expanding gambling, according to a report made public this morning by the Maryland State Board of Elections.

The Pennsylvania-based firm has spent tens of millions in other states to defeat casino expansion measures. The new figures bring to $7.8 million the amount that's been dedicated by both sides of the casino debate in Maryland -- a stunning figure given the referendum question was only set two weeks ago.

In mid-August the General Assembly passed a law that would allow a sixth casino, to be built in Prince George's County, and Vegas-style table games at all of the state's gambling locations. The law also slashes the tax rate for most of the state's casino owners to make up for the new competition. The law must be ratified by the voters to take effect.

Penn National believes it was treated unfairly by the new law -- its casino in Cecil County is the only site that does not get a guaranteed tax break to make up for the additional competition.

The company has a strong business reason to oppose the law: The proposed sixth casino would take gamblers from its racetrack in West Virgina. Penn National has said in SEC filings that profits at their Charles Town casino would be "adversely affected" by the new competition.

Separately, MGM Resorts has put $2.3 million into a campaign supporting the referendum question. The gambling company wants own and operate the new sixth casino and stands to gain hundreds of millions. MGM argues that voting for the measure would mean more jobs and about $100 million in new tax dollars.

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