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    Maryland casinos pumped $1.4 billion into the state’s economy, industry study says

    December 9, 2014

    Maryland’s fast-growing casino industry injected $1.4 billion into the state economy and supported nearly 8,000 jobs in 2013, according to an industry-funded study released Monday.

    The casino industry also generated $359 million in income and pumped $543 million in tax revenue into state coffers, concluded researchers from Oxford Economics, a forecasting firm based in Oxford, England.

    The analysis, paid for by the American Gaming Association, the leading trade group representing casino operators and manufacturers, did not include the $442 million Horseshoe Casino Baltimore, which opened in August 2014 and employs about 3,000 people. A sixth casino, the $925 million MGM National Harbor, is being built just outside Washington and is scheduled to open in 2016.

    Maryland has become one of the most concentrated markets in the country and one of the bright spots in the mid-Atlantic casino market. It has profited at the expense of older gambling destinations that were once popular with Free State gamblers, including West Virginia, Delaware andAtlantic City, where four casinos will have closed by year’s end.

    Four casinos were open in the state in fiscal 2013: Hollywood Casino Perryville, Casino at Ocean Downs, Rocky Gap Casino Resort and Maryland Live, the state’s largest and most successful. They directly employed nearly 4,000 people, and indirectly supported thousands more, the study found. The Oxford researchers went a step further and said that without the commercial casino industry, the unemployment rate in Maryland would rise from 6.3 percent to 7 percent.

    Nearly half the slot machine revenue in Maryland goes to the state education trust fund, but an analysis by the Capital News Servicefound that in fiscal 2014, more money went to the casino operators than to the trust fund, and that the trust fund dollars have been used to free up money in the general fund for other uses.

    Based on its tax revenue estimates, the Oxford report said the average household would pay an additional $252 in taxes each year if not for the casinos.

    About $1.5 million is diverted from gaming revenue to pay for programs to address problem and pathological gambling. However, the Oxford report does not include any estimates on the fiscal impact of problem gambling and gambling addiction.

    A 2011 state-backed study estimated that about ­3.4 percent of Marylanders were at risk for a gambling addiction.

    “This study shows that gaming is driving big results in Maryland,” Geoff Freeman, president and chief executive of the American Gaming Association, said in a statement. “However, given increased competition and changing consumer demands, our future success depends on strong partnerships with policymakers that allow us to innovate, reinvest and create more jobs.”

    State lawmakers may take comfort in the AGA-funded report’s findings since revenue figures have so far fallen short of initial projections.

    In 2008, the year Maryland voters approved slot machines in a referendum, state lawmakers projected that casino revenue would top $1.36 billion in fiscal 2013. That estimate assumed that five casinos would be operating by then and the state would have 15,000 slot machines.

    Instead, there were four casinos with a total of about 9,000 slot machines and more than 350 table games that together generated $608 million in revenue.

    The discrepancy may have more to do with the state’s expectations. Since it opened in August, Horseshoehas been raking in about $23 million a month, compared with the $27 million projected by a state-backed study done last year. That study suggested that Horseshoe would primarily cannibalize business from Maryland Live near the Arundel Mills mall. But the suburban casino has performed better than anticipated. Its revenue held steady in November, compared with a year earlier.

    “We’re pleased with the results we’re seeing,” general manager Rob Norton said. “The state had their expectations. We had ours. They didn’t necessarily line up. It seems to have played out the way we believed. There are two distinct markets, one for Baltimore City and one for us.”

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