More on a dog eat dog world in gaming


There are times when a silent narrative is embedded in the daily news; on September 12th there were seven stories that created a silent narrative, they needed no editorial comment to create a narrative.  The stories illustrated the extent of the expansion of gaming and the increased competition the expansion is creating.

Most of the stories came from Maryland which is undergoing an expansion of existing casinos and, if a ballot question is approved in November, will add another casino to the mix and increase the gaming options and operating hours of the existing casinos.  The first article heralded the final expansion of Maryland Live, located near Hanover.  The casino added a thousand slot machines and will now have 5300 (including the electronic table game machines) – and be the third largest casino in the country.  It was the state’s third casino, the first casino opened in 2010.  Two approved locations have yet to open and a sixth license is subject to the November voting – a total of 15,000 slot machines were approved in the original legislation.

The ballot battle is really heating up, existing operators are fighting the initiative and prospective operators are supporting it, both with lots of cash.  The two sides are said to have spent $15 million already on the campaign.  The fighting is intense and bitter and for good reasons; Hollywood Casino, the first casino in the state to open in September of 2010, says it lost 40 percent of its business when Maryland Live opened in June.  Another mega casino is certain to hurt the existing operators and reduce the potential of the casino planned, by Caesars, for Baltimore; although Caesars is supporting the legislation hoping that adding live table games and reducing the taxes will more than offset the increased competition.

Six of the seven stories in the narrative concern the final 1000 slots at Maryland Live, the political campaign and the plans for Rocky Gap; it is the smallest of approved casinos, but not yet built.  The final story comes not from Maryland, but from Atlantic City; it is not about casino openings or expansions, rather it is about casinos that will never open.

Under Governor Christ Christie’s plan to liberalize New Jersey gaming laws and make it easier to operate a casino in Atlantic City new regulations were introduced.  One of the new regulations allowed for smaller, boutique hotels – a minimum of 200 rooms, instead of the previous 499 requirement; the program was meant to be a test – an experiment – in ways to stimulate investment in the market.  As such, it might be judged a failure.  Initially several companies express a tentative interest, but the deadline for submitting proposals passed in April and only one bidder, Hard Rock was still interested.  And that is the final story, Hard Rock said it was no longer interested and cited “market conditions.”

Those conditions would be casinos in Maryland, Pennsylvania, New York, Connecticut, Delaware, Ohio and others – with more states, Massachusetts, New Hampshire and Rhode Island on the short list, making plans for their own casinos.  More casinos means more pain for the existing ones.  Hollywood Casino in Perryville, Maryland lost 40 percent of its business to a bigger casino closer to the customers.  It has asked the state to allow it to reduce the number of slot machines and cut other expenses.  That one might argue is the only response, short of closing, the casino can make.  Atlantic City has already lost 40 percent of its business, mainly to Pennsylvania, but not only to Pennsylvania and will lose more in the future.  And before long, AC must do what Hollywood casino did, reduce its capacity.

So that was the silent narrative of that day, the battles of expansion and the battles of increased competition. Hard Rock will not be the last casino operator that withdraws from the fray that will eventually consume the entire region.

 Maryland Live!, the state’s largest casino, will celebrate the grand opening of its Phase Two expansion Wednesday. The final 1,000 slots are in place… Expansion makes the casino the third largest commercial casino in the country with nearly 5,300 slots and electronic table games. WJLA-TV, 9-12-12

 Penn National Gaming stuck another $4 million into its anti-casino expansion campaign, the latest display of a seemingly bottomless appetite for spending in Maryland by gambling interests. Annie Linskey, Baltimore Sun, 9-12-12

 A Caesars-backed group planning to build a casino in Baltimore announced late last night that the company would join forces with MGM Resorts and put money into an effort to expand gambling.  Annie Linskey, Baltimore Sun, 9-12-12

MGM Resorts International will open a visitor center at National Harbor next week as part of its campaign to win approval of its plans to build a “destination” casino at the site on the Potomac River…MGM has been spending millions on television ads in its battle with Penn National Gaming over the fate of Question 7. Michael Dresser, Baltimore Sun, 9-12-12

 Developer Milt Peterson will put $400,000 into an effort to expand gambling in Maryland, the first non-casino interest to write a check. Peterson hopes to partner with gambling giant MGM Resorts International. Annie Linskey, Baltimore Sun, 9-12-12

 The new owner of the Rocky Gap Lodge says the resort… plans to install 500 slot machines…it expects to spend $25 million to $30 million on acquisition and development. Associated Press, 9-12-12

 “Hard Rock International has decided not to move forward with an application for a potential hotel/casino development in Atlantic City, due to current market conditions.” Hard Rock International has withdrawn plans for a new casino hotel in Atlantic City, dropping out the day the development group was facing a deadline for a $1 million payment to the state for the project.…Today was the deadline for Hard Rock’s developers to post a $1 million bond and submit construction timetables for a project that had already been delayed for months. Donald Wittkowski, Press of Atlantic City, 9-12-12

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2 Responses to “More on a dog eat dog world in gaming”


  1. 1 rexdstock1 September 18, 2012 at 6:30 am

    You’ve been talking about this issue for years (starting with states’ insatiable need for more money and their view that gaming provides ‘incremental’ income that they just can’t pass up), and one of these days your in depth observations will produce a spark, and idea, that will be so brilliant it will be pushed aside as ridiculous…

    Heck, the economic experts are still using Fed Ex numbers as a legitimate barometer of business activity, never once considering that the world is moving forward and perhaps folks are finding other ways to get packages/papers/whatever to their customers…

    Another win last night for your boys.   

    ________________________________

  2. 2 Ken Adams September 18, 2012 at 10:33 am

    In every industry, indeed in every aspect of life, there are always a few dominate themes – for years the dominate theme in gaming was expansion; where is it going now? – as state after state added casino gaming – now the dominate theme is the resulting competition. The media is a trend behind on this issue as it often is, but it is also rapidly catching up; it is rare now for discussion of expansion not to include the fallout from increased competition.


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