National Harbor ad claims not supported by state analysis

GamblingLifestyle and LeisureAdvertisingPrince George's CountyCordish Cos.Martin O'Malley

A new television ad debuted Tuesday from a group pushing a casino at National Harbor. It asserts that failure to authorize a casino during a special session this summer will: (1) cost Maryland "$1 billion" in tax revenue and (2) will deny the state's economy "thousands" of "good paying jobs."

The ad is sponsored by Building Trades for the National Harbor, a coalition of unions and businesses that has sponsored other TV and radio ads aimed to pressure politicians to come back for a special session.

Here is the text of the ad:

It would mean $1 billion for Maryland and our schools and our teachers.
Thousands of good paying jobs.
It’s the new resort casino at National Harbor.
But it won’t happen unless lawmakers act right now.
All that money and all those new jobs will go to Delaware, Pennsylvania, West Virginia.
The only loser? Maryland schools.

Claim No. 1: The group is using financial figures from a report they commissioned from Union Gaming Analytics, which says that Maryland could see $522 million annually in tax revenues from "gambling expansion." Then the National Harbor group has multiplied the number by three -- since without a special session, the state will have to wait until 2014 at the earliest to put the question to voters. (Oddly, the group low-balled its own figures, since using the above logic they could have claimed $1.5 billion in extra money.)

Regardless, the $1 billion claim cannot be sustained using independent state figures from the Department of Legislative Services.

A work group called by Gov. Martin O'Malley determined that gambling expansion could net the state $223 million a year. That would be $669 million over three years -- not what the National Harbor supporters are saying, but still a tidy sum.

However, not all of this extra money is from the Prince George's casino -- in fact, a substantial amount of it ($80 million annually) comes from shifting the purchase of the slot machines from the state to the casino owners in four locations - Baltimore, Anne Arundel, Cecil and Worcester (the fifth casino at Rocky Gap in Allegheny would continue receiving state support.)  This is a change that could be done as early as January since it does not need voter approval like other gambling expansion.

Next, the package of changes includes adding table games like poker and blackjack to the state's menu of gambling options at all casinos. Doing so all locations - including the Prince George's casino - nets the state $45 million a year. (DLS assumes the tax rate would be 15 percent.)

But, those who don't want to see a sixth casino, including the Cordish Cos., argue that the state could also generate comparable revenue by simply adding table games to the five existing sites. Doing so would net Maryland $51 million a year, a slight increase because the DLS assumes the tax rate would be 20 percent.

State analysts believe the slot machine revenues to the state from a new Prince George's casino would be about $82 million a year. That's not chump change in Maryland, which continues to be plagued by projected budget deficits.

Supporters of a sixth site argue that the new development would add some extra state revenues from payroll taxes, property taxes etc, though DLS did not calculate those figures.

Their larger point is that political reality dictates all of the changes to the gambling program would be made simultaneously, so it is fair to count the revenues from other casinos when calculating the benefit to Maryland's coffers. While their read of the political landscape may be true, their ad attributes the $1 billion to the Prince George's casino, not 'gambling expansion,' which would more accurate. 

Claim No. 2: The second claim is fairly vague, merely stating that a "resort casino" in Prince George's County would create "thousands" of "good paying jobs." These would include temporary construction positions, new service jobs and dealer jobs at table games.

The "resort-casino" at National Harbor would presumably be run by MGM Entertainment, which signed a letter of intent with the owners of National Harbor. Data from the MGM casino in Detroit shows that the average full-time salary (including wages, tips and employee meals) is $55,474 a year.

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