A law expanding casino gambling in Maryland alters some tax and revenue percentages but should keep the horse racing industry whole, according to fiscal projections associated with the measure.
Democratic Gov. Martin O'Malley signed the bill into law Aug. 15. It calls for a sixth casino license in Prince George's County pending voter approval, increases the number of video lottery terminals in the state, authorizes table games, and allows for 24-hour gaming.
The Maryland horse racing industry has been receiving 7% for purses and 2.5% for racetrack capital improvements from VLTs at three locations that have opened thus far. The revenue has been capped at $100 million a year and $40 million a year, respectively.
If and when a gaming license is issued for Prince George's County just south of Washington, D.C., the percentage of VLT revenue to purses will drop to 6% with an annual cap of $100 million. The percentage to the Racetrack Facility Renewal Account will drop to 1%, and the annual cap to $20 million, though distributions will be extended from eight years to 16 years.
According to the Maryland Department of Legislative Services, VLT revenue for purses is projected at $37.5 million in fiscal year 2013, $71.9 million in fiscal year 2015, and $82.6 million in fiscal year 2017.
The racetrack improvement fund would earn $13.4 million in fiscal year 2013, $25.5 million in fiscal year 2015, and $29.2 million in fiscal year 2017.
The Maryland horse racing industry, by order of the governor, is working on a long-term plan for sustainability. There already has been a temporary shift of some purse revenue to the Racetrack Facility Renewal Account.
Maryland Lottery Commission statistics show that in July 2012, purses earned $3.3 million from VLTs and the racetrack improvement fund received $1.2 million. For calendar year 2012, purses received $10.8 million and the racetrack fund $3.8 million.
The language in the law limits a Prince George's County casino to a specific area that includes the National Harbor and Rosecroft Raceway. The majority of voters in the county must approve the statewide referendum in November for the project to move forward.
Penn National Gaming Inc., which operates Hollywood Casino Perryville in Maryland, has said the selection is skewed toward the National Harbor property. The company, which owns Rosecroft, has extended live harness racing there for the next two years pending the outcome of the referendum and selection of a location for a casino.