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Governor Martin O'Malley's Special Gambling Session FAQ

Governor Martin O'Malley's Special Gambling Session FAQ

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Published by David Moon

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Published by: David Moon on Aug 08, 2012
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 Frequently Asked Questions
Why is this legislation being proposed in a special legislative session?
We have an opportunity to create thousands of new construction jobs and as many as 2,000permanent jobs. By acting now, we also have an opportunity to secure additional revenue forMaryland's public schools over the next two years.It is time to resolve an issue that has consistently been divisive in order to move forward to the otherimportant issues facing the State. The legislation will create predictability in the marketplace, makeMaryland’s gaming program competitive with other states, protect local and city aid being generatedat current sites, ensure authorized facilities are capable of being built, and allow the people of PrinceGeorge's County to decide at the ballot whether they want a sixth site for the benefit of their county.
How soon could there be table games in Maryland? How much revenue will thatgenerate? At what rate will those table games be taxed?
If a majority of Maryland voters vote in favor of the question to expand gaming on the November2012 ballot, the State Lottery and Gaming Control Commission shall immediately begin theregulatory process to authorize table games. It is estimated that Maryland could have table games byearly 2013.According to the fiscal analysis provided for the Workgroup to Consider the Expansion of Gaming,table games will likely generate approximately $45-51 million per year in additional revenues to theState. The proposed bill would generate that additional revenue by taxing table games at 20% anddedicating those dollars to the Education Trust Fund. If a sixth facility opens, that distributionadjusts to the benefit of the local jurisdiction in which the facility is located -- with 5% of theproceeds to the jurisdiction and the remaining 15% to the Education Trust Fund.
Will there be a new “Gaming Commission?”
Yes. The Workgroup recommended establishing a Gaming Commission, with an expert ExecutiveDirector, in order to protect the State’s interest. The proposed legislation would re-constitute thecurrent State Lottery Agency as the State Lottery and Gaming Control Agency, with a State Lotteryand Gaming Control Commission therein. Members would be appointed by the Governor, with theadvice and consent of the Senate, and would be required to have substantial experience in aprofession relating to fiscal matters or economics. The Commission will also consult with an outsideconsultant to provide continual analysis of the gaming industry.
Specifically, how does the legislation impact Baltimore City and its plans to build afacility? How soon could that move forward?
On July 31, 2012, the State’s Video Lottery Facility Location Commission voted unanimously toapprove Caesars Entertainment’s application to build a $310 million casino near M&T Bank Stadium in Baltimore. That facility is expected to open in the second quarter of 2014. Representatives from that facility have consistently testified in favor of the changescontemplated in this legislation. If a majority of voters approve the expansion of gaming, theBaltimore City facility will have the opportunity to include table games at their facility.
Does the legislation authorize a casino in Prince George’s County? If so, how sooncould plans for a casino move forward?
The legislation authorizes an additional site in Prince George’s County only if: (1) a majority of Maryland voters vote in favor of the question to expand gaming on the November 2012 ballot; and(2) a majority of voters in Prince George’s County approve the same question. The Commission maynot permit the operation of that facility before the earlier of July 1, 2016 or 30 months after theBaltimore City facility is open to the public.
Does it allow for a casino located somewhere else besides National Harbor?
The legislation does not specify National Harbor but allows for a competitive bidding process,contingent on local zoning approval, thereby affording competition, transparency, local control, andmaximum return to State taxpayers
Is there a provision minimizing the impact on Baltimore City and Anne ArundelCounty if a Prince George’s County casino is built?
Yes. The bill includes a “hold harmless” provision to ensure that Baltimore City and Anne ArundelCounty’s local impact grants are not reduced because of the addition of an additional site.PricewaterhouseCoopers, a gaming consultant to the State, estimated that a new Prince George’sCounty site will have an impact on facilities in Anne Arundel and Baltimore City. The magnitude of the impact would warrant an increased operator share of 6-10%. In recognition of that fact, if a videolottery facility is licensed in Prince George’s County, the Baltimore City and Anne Arundel Countyfacilities may retain an additional 5% of their video lottery proceeds for marketing, advertising,promotional costs, and/or capital improvements to their facilities. This will help them remaincompetitive in a new market, and maximize the return for the State.After thoroughly reviewing all relevant data and reporting to the Governor and General Assembly,the State Lottery and Gaming Control Commission, with legislative oversight, may also increase theBaltimore City and Anne Arundel facilities’ percentage by not more than 5% percent of the videolottery terminal proceeds. It is in the State’s interest to preserve viable facilities. Importantly, thisexpansion of sites will generate significant new revenue for the Education Trust Fund.
What about the other facilities?
The percentage of the video lottery proceeds distributed to other licensees is as follows:Rocky Gap: Current law provides that Rocky Gap will receive 50% of the video lottery proceeds for10 years and, after 10 years, 43% provided that each year 2.5% of the proceeds is used for capitalimprovements.Ocean Downs: The legislation provides that, as of July 1, 2013, Ocean Downs will receive apercentage equal to 43% of the video lottery terminal proceeds if the facility has fewer than 1,000machines and spends at least 2.5% of those proceeds annually on capital improvements.Perryville: Current law provides that the Perryville facility receive 33% of the video lottery terminalproceeds.The legislation also provides that licensees receive an additional 6% of the proceeds if they own orlease the video lottery terminal devices and associated equipment and software. This will generatesignificant savings for the State and the Education Trust Fund, as the State is currently responsible

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