Goodwin Gaming
August 28, 2013

DC’s Neighbors Upping the Ante To Attract District Gamblers

Five years ago, DC-dwellers in search of a casino had to make the more-than-three-hour trek to Atlantic City. Today, as legislatures in nearby Delaware, West Virginia and now Maryland have opened the field to casinos with slots, table games, and poker rooms, DC gambling aficionados are surrounded by ever-closer options. Within a few years, they will have a casino on their doorstep in Prince George’s County, Maryland.

The surge began in Delaware and West Virginia, which have had “racinos” (racetracks with video lottery games and slots) since the mid-1990s. Delaware legalized table games in January 2010 when Governor Jack Markell signed House Bill 310 into law. Six months later, Dover Downs, Delaware Park Casino, and Harrington Raceway and Casino had table games up and running.

As for West Virginia – the closest part of which (Harper’s Ferry) is about an hour away from DC – state law requires county approval before opening a facility that operates table games (W. Va. Code § 29-25-1 et seq.). Three counties hosting racinos in West Virginia– the Greenbrier Casino Club, Mardi Gras Casino, Mountaineer Casino, and Wheeling Island Casino – approved table games in 2007; however, all of these casinos are farther from DC than Atlantic City. But in December 2009, voters in Jefferson County – home to the Charles Town Races, which is just over an hour’s drive from DC – approved table games by a wide margin. In July 2010, Hollywood Casino at Charles Town Races opened, boasting full table games and a fifty-table poker room.

Not wanting to miss out on the action, Maryland put its first chips down in 2008, when the Old Line State’s voters approved Article XIX of the Maryland Constitution, which authorized five video lottery locations at specified sites. In November 2012, Maryland doubled down in a resolution authorizing table games at existing facilities, and paving the way for an additional facility in Prince George’s County, which abuts DC (more on that below).

In March of this year, Hollywood Casino – Perryville (45 minutes northwest of Baltimore) became the first casino in Maryland to open live table games. Rocky Gap Casino Resort opened in May of this year in northwestern Maryland with table games and slots. Ocean Downs, just outside Ocean City, is sticking with video machines for now, and does not currently offer poker or table games.

Maryland Live! Casino in Hanover, MD (between Baltimore and DC), opened in June 2012 with slots and electronic table games, and is scheduled to open its own 50-table live poker room later this month. It recently held itself out as the top-grossing casino in the mid-Atlantic region, having brought in over $55 million in slot and table revenue in May 2013 alone; recently released figures from the Maryland Lottery and Gaming Control Agency confirm that it is the top-grossing casino in Maryland, having brought in nearly $325 million in revenue (more than 80% of which came from its video lottery terminals) through the first seven months of 2013.

Maryland Live!’s leading status may change, however, in the coming years, with new casinos setting up shop in the city of Baltimore and in Prince George’s County, just outside of DC.

The Horseshoe Casino is scheduled to open in 2014 in Baltimore, less than a mile from the city’s two major sports stadiums – M&T Bank Stadium and Camden Yards. There is one potential holdup: two Baltimore residents have filed suit under the Clean Water Act concerning on the proposed site – though the lawsuit does not mention the proposed casino, it alleges the site was contaminated by prior owners and continues to discharge pollutants into the Patapsco River. See Myers v. Mayor & City Council of Baltimore, No. 1:13-cv-1924, Complaint (D. Md.) (filed July 2, 2013). Baltimore Solicitor George Nilson was recently reported characterizing the litigation as a meritless attempt to delay the casino project, noting that the Maryland Department of the Environment already approved the development plan in November 2012 (it made minor revisions to the plan in May 2013).

The biggest news for DC gamblers may be that in 2016, a casino is slated to open in Prince George’s County adjacent to DC. Three companies – MGM Resorts, Penn National Gaming, and Greenwood Racing, Inc. – submitted proposals on the May 10, 2013 deadline; the state is expected to select a proposal by the end of 2013. All three contenders also have pending gaming applications in Massachusetts.

MGM’s proposal would bring a casino to the existing National Harbor waterfront site, which sits a mere seven miles from the DC border. Greenwood recently purchased a 22-acre site in Fort Washington, MD to position itself to move quickly should it be awarded the casino; it envisions an $800 million hotel, gaming and entertainment venue. Penn National, which already runs Rosecroft Raceway in Fort Washington, proposes to open a Hollywood Casino on the Raceway grounds.  Expectations are high for the new casino – Maryland Attorney General Doug Gansler, a 2014 gubernatorial hopeful, has already suggested connecting Metro to the new casino to handle the anticipated increase in traffic.

The overall change is remarkable: three years ago, DC had no full-service casinos within a three-hour radius; in three more years, it will have nine. The competition will be fierce; Delaware and New Jersey are already feeling the effects of their customers being drawn away to recently opened Maryland casinos; Delaware recently provided an $8 million payment to its three casinos to prevent layoffs. With so many options available, it remains to be seen whether patrons will travel based on established loyalty to a particular casino, whether they will differentiate among the different casino experiences, or whether they will simply gravitate toward the closest venue.

Perhaps the desire to keep revenues will draw DC and Virginia to the table. DC flirted with online gambling several years ago, when the city council approved a law authorizing it, but the law was repealed in February 2012 after Mayor Vincent Gray withdrew his support for DC’s nascent initiative. In Virginia, State Senator Louise Lucas introduced a bill in November 2012 (SB 714) that would have paved the way for a casino in the Hampton Roads area, citing the money that Maryland casinos had brought to the state (and pulled away from Virginia). However, the Senate’s General Laws & Technology Committee rejected the bill in January 2013, suggesting further research into the financial benefits of a casino. Maryland’s recent success – its casino revenues collected this fiscal year have exceeded estimates by nearly $77 million – may encourage Virginia and DC to open their doors to casinos as well.