Table game trend alters odds for Maryland slots
Surrounding states move toward full-blown casinos
Soon, Marylanders won't have to go to Atlantic City to find the nearest blackjack table, roulette wheel or poker room.
The full array of casino games will be offered at a gambling resort in nearby West Virginia and shortly could gain approval at racetracks in Delaware and bustling venues in and around Philadelphia.
As Maryland's neighbors up the stakes in the gambling arena, one industry analyst said officials here should be worried that the competition will eat into projected slots revenues.
"I always thought it was a mistake to limit the Maryland casinos to slots," said James R. Karmel, a history professor at Harford Community College who is also a gaming consultant. "I knew what was happening around the region. I knew that Pennsylvania was moving in that direction. I knew that Delaware was moving in that direction. And, I knew that West Virginia was probably moving in that direction and here we are."
Voters in Jefferson County, W.Va., on Saturday authorized the addition of table games, such as poker, blackjack, roulette and craps, at the sprawling Charles Town Races & Slots, which is located just across the Potomac River from Frederick County. It will take at least six months to hire and train dealers to work the felt-lined tables.
Delaware is poised to introduce table games as soon as next year at its three racetrack casinos, which also started offering legalized sports betting in September.
And in Pennsylvania, legislators are weighing a proposal to legalize table games that is projected to pump $200 million into the state's coffers. The main hang-up is over the tax rate for table game revenues and licensing fees.
By the time Maryland's five slot machine parlors are operational, surrounding states could be luring Marylanders to their gaming facilities and could perhaps prompt calls for the Free State to expand its gambling enterprise.
"As gambling has proliferated across the Northeast, you're going to continue to see that," said Clyde W. Barrow, director of the Center for Policy Analysis at the University of Massachusetts Dartmouth. "It's like a gambling arms race."
The legislation that paved the way for last year's referendum on slot machines in Maryland, however, requires any expansion of gambling to be subject to voter approval.
Even so, Del. Steven R. Schuh (R-Dist. 31) of Gibson Island expects pro-gambling interests will put forth a massive lobbying effort for full-blown casinos in the coming years.
"Slots is just the nose under the tent," he said.
Table games typically account for between 20 percent and 30 percent of casino revenues, and casinos that have them generally draw a younger and more affluent clientele than slots-only venues, Barrow said.
Two-thirds of slots players are women older than 40, while three-quarters of table game customers are men under 40, according to his analysis.
That means Maryland can expect to continue to lose revenue to its neighbors even once slots come online, he said.
However, the state should not rush to play catch-up, said Del. Luiz R.S. Simmons (D-Dist. 17) of Rockville, who vehemently opposed slots during the 2007 special session.
"If you're Las Vegas and you're in the middle of the desert, it's one thing," he said. "If, on the other hand, you've got a number of gambling venues next to each other and they're intensely competing for the gambling dollar, [it] only stretches so far unless you're going to go out like the cigarette companies and actively create a new generation of gamblers."
Gaming supporters were successful in convincing voters that the legislative restrictions would prevent the expansion of gambling beyond slots, Simmons added.
"Many people voted for it believing we would be able to create a firewall between the introduction of slots and the expansion of gambling, generally," he said.
Simmons predicts the expansion to table games will be on the agenda within four years.
"When our slots initiative flounders on the shoals of table games in West Virginia and Pennsylvania, then whoever the governor is going to be is going to come back and say, In for a dime, in for a dollar,'" he said.
The state's effort to implement slots has hit so many snags that any talk of expanding gambling is ludicrous, said House Minority Leader Anthony J. O'Donnell (R-Dist. 29C) of Lusby.
"They can't even get the fundamentals of slots down right," he said, blasting the O'Malley administration's poor management of slots. "It's hard to envision giving even broader authority to the state."
But Karmel, the Harford Community College instructor and gambling consultant, believes Maryland officials have every right to be wary of the intense regional competition and consider how the state might be negatively affected.
For instance, a Maryland couple with a diversity of gaming interests might drive the extra distance to an out-of-state venue with table games than a closer slots-only facility, he said.
Karmel projects that could cause up to a 10 percent reduction in anticipated revenues, which initially were estimated at $600 million annually. But that figure could be revised downward, at least initially, due to the weak economy and tepid interest to operate the five venues proposed for Anne Arundel, Allegany, Cecil and Worcester counties and Baltimore city.
Closing the door on table games during the slots debate was a mistake, Karmel said.
"I never understood what the objection was to table games," he said, pointing to the more diverse and affluent customer base. "It doesn't make sense why you would not want to compete."