Maryland Voters Back New Casino After Costly Battle

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Maryland Voters Back New Casino After Costly Battle

The march among states to allow more gambling continued Tuesday as Maryland voters elected to allow a new casino following a brutal and expensive battle between two major gambling companies.

Maryland voters decided 52% to 48% to allow a sixth casino in the state, as well as to expand other gambling operations. The new law broadens a proposal approved by voters in 2008 that first allowed commercial casinos in the state but limited gambling to five slot machine parlors. Already, several have opened, including one that is the first-ever casino in the country built into an existing mall.

The initiative—called Question 7—allows the state to issue a new casino license in Prince George's County, which is near Washington, D.C. Companies hoping to win the license or prevent it from being issued spent roughly $80 million stumping for their positions, making it the most expensive political battle in Maryland's history.

MGM Resorts International hopes to get the license, which would allow it to build an $800 million casino just outside the city. The Las Vegas-based company led a coalition of gambling interests that will get reduced taxes, the ability to add table games to casinos that had been limited to slot machines, and the permission to run 24 hours a day.

The coalition spent about $35 million on the campaign, said MGM spokesman Gordon Absher.

MGM's campaign emphasized new jobs created by the casinos. It also highlighted the state's ability to recoup state revenue that would otherwise go to coffers in nearby states that already allow more gambling.

The effort faced sharp opposition funded by regional gambling company Penn National Gaming Inc., which operates a casino in Charles Town, W.Va., that draws heavy traffic from the D.C. area. Penn spent $40 million in its own advertising blitz, which sought to raise questions about the use of gambling proceeds by the state and the transparency and fairness of the licensing process.

Since the economic crisis hit in 2008, casino companies have taken advantage of high unemployment figures and state budget crises across the nation to seek a softening in state restrictions on gambling. Massachusetts and Ohio have introduced casinos for the first time, while other states such as Pennsylvania have expanded their gambling options and loosened restrictions.

Analysts have grown concerned about the saturation of U.S. gambling, particularly in the Northeast.

Rhode Island voters also on Tuesday approved the expansion of gambling to allow table games at a casino. Analysts said that while similar initiatives had failed previously in Rhode Island, this one likely passed because nearby Massachusetts is set to start opening casinos. An initiative to bring table games to a second Rhode Island casino, however, failed in a local election.

"While certain casinos in Rhode Island and Maryland stand to gain, the increase of gaming supply, in whatever form it takes, will not necessarily attract more gamblers," Moody's Investors Service wrote in a report Wednesday. "We believe this "keeping-up-with-the-Joneses" mindset will only further deluge a regional market that is already saturated and forced to reach out ever farther to attract the same number of customers."

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