Maryland was the only state in the Mid-Atlantic whose casino revenue increased significantly between 2012 and 2013, as it cashed in on gamblers who had previously headed out of the state. But there are signs that the rapid pace of growth may be slowing.
Annual revenue figures compiled by the Center for Gaming Research at the University of Nevada at Las Vegas show that casino revenue surged 32 percent in Maryland in fiscal 2013 but decreased in West Virginia, Delaware and New Jersey. Gambling revenue in Pennsylvania — now the second-largest gambling market in the nation, after Nevada — was flat.
That trend has continued into 2014. In the past two months, there has been a drumbeat of headlines such as “Trump Plaza becomes 4th casino in Atlantic City to close this year” and “Pa. slot revenue down for fiscal year.”
Maryland has been the exception. Last month, the state’s five casinos generated $82 million in revenue, 26 percent more than a year earlier, the state lottery and gaming control agency reported last week. But that was only $2 million more than in August, even though September was the first full month of operation for the newly opened Horseshoe Baltimore.
The $400 million casino, owned by Caesars Entertainment and located near M&T Bank Stadium, generated about $22 million in September. But that was largely at the expense of its closest competitor, Maryland Live, located beside the Arundel Mills mall, whose total revenue from slots and table games dropped about 10 percent, compared with a year earlier, the state reported. Hollywood Casino Perryville’s revenue declined 10.7 percent.
While Maryland casino revenue hit another record, most of the gains no longer consisted of millions of dollars that once would have been lost to Delaware and West Virginia. They have just been shifted 12 miles up the road from Hanover to Baltimore, said Richard McGowan, a casino industry expert at Boston College’s Carroll School of Management.
Some casino operators have been warning that the Mid-Atlantic casino market was oversaturated before Horseshoe Baltimore opened. But other analysts noted the same thing has been said many times before, only to be contradicted by another expansion of gambling.
A state-funded analysis by Cummings Associates, an Arlington, Mass.-based research firm, that was released in November, predicted that Maryland Live’s slots revenue could drop by 16 percent and table game revenue fall off by 20 percent once the Baltimore casino opened. MGM National Harbor, which is under construction and set to open in 2016, is also expected to have an impact on Maryland Live’s revenue, but is more likely to bring in gamblers from out of state, especially from Virginia, one of the few states that has not legalized casino gambling.
McGowan cautioned against making predictions based on one month’s performance. While Maryland Live and other nearby casinos may have to get used to bringing in less revenue than they were before Horseshoe’s opening, “I don’t think any of them will close,” he said. “I think things will level off.”
A week before the release of the latest Maryland gambling revenue figures, the industry’s leading trade group, the American Gaming Association, put out a study, based on 2013 figures, highlighting casinos’ economic development benefits. The study, compiled by Oxford Economics and including revenue from tribal casinos, found that the industry contributes $240 billion to the U.S. economy, supports more than 1.7 million jobs and generates nearly $74 billion in income.
The group’s president, Geoff Freeman, said the study shows that “the industry’s contributions have gone underestimated.”
The industry has already been making that argument successfully, particularly in post-industrial cities, since Detroit first welcomed casinos to its downtown in the 1990s. Since then, dozens of casinos have opened in the Northeast and Mid-Atlantic. And Massachusetts and New York have now legalized Vegas-style gambling. So why the need to further convince anyone? “Why?” McGowan said. “Because everyone is talking about oversaturation.”
Annys Shin has been a staff writer at the Washington Post since 2004.
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