Maryland Casinos Posts Moderate 6.4% Revenue Gain in August

Maryland Casinos Posts Moderate 6.4% Revenue Gain in August

This year, Maryland’s casino market has been posting moderate, monthly year-on-year gains, and August was no exception with revenues from the state’s six casinos rising by 6.4% to $146.3 million. A total of $60.4 million was subsequently collected by way of taxes, of which $45.3 million was allocated to the state’s Education Trust Fund, with the rest going towards supporting local communities, casino jurisdictions, as well as Maryland’s horse racing industry.

Market Analysis

MGM Resorts’ National Harbor has dominated the state’s casino market since the $1.4 billion resort opened for business in December 2016. Last month, the venue featuring 3,133 slot machines and 198 table games then generated $58.3 million in revenue, up by 10.3% compared to the same month in 2017, and giving it a roughly 40% share of Maryland’s casino market.

Live! Casino & Hotel, despite offering more gaming activities (3,989 slot machines, 202 table games), was the next highest earner on $47 million (+5.1%), giving it 32% slice of the market, with the state’s four other casinos accounting for the remaining 18% of revenues. The only one reporting a year-on-year drop in business, however, was the Horseshoe Casino Baltimore (2,202 slot machines, 167 table games) which saw its revenue contract by 3.7% to $21 million.

Meanwhile, Ocean Downs Casino (892 slot machines, 18 table games) saw its revenue spike by 19% to $8.27 million; Hollywood Casino Perryville (822 slot machines, 22 table games) was up by 5.2% to $6.6 million; and Rocky Gap (665 slot machines, 17 table games) brought up the rear with $5 million in revenue, or 4.9% more than it earned during the same month in 2017.

MGM Resorts Dealer Cheating

The MGM National Harbor in Oxon Hill, Maryland may be the state’s top casino, but in August the venue received a bit of bad press after it was discovered that one of its baccarat dealers was working with a co-conspirator(s) to cheat the property.

According to prosecutors, Ming Zhang would expose a portion of the baccarat deck to his accomplice, and ensure that the exposed cards were not shuffled, meaning his partner(s) in crime was able to “predict the outcome of any given baccarat hand with near-perfect accuracy and place bets accordingly.” Ming Zhang was subsequently able to steal around $1 million from the casino, and after pleading guilty now faces the prospect of up to five years behind bars.

Industry Background

In 2010, Hollywood Casino Perryville became the first casino to open its doors for business in Maryland, with MGM Resorts’ National Harbor in 2016 becoming the state’s sixth gambling establishment. The industry has since proven to be a growing source of revenue for Maryland, and one would have to look back to November 2015 to find the last time year-on-year casino revenues slipped (- 0.5%).

According to the the latest financial report, the casino market generated $1.61 billion in 2017, up by 34.2% versus 2016, and representing a record for the industry. Commenting upon the state’s thriving gambling market, Maryland Lottery and Gaming Director Gordon Medenica said:

“It’s clear they’re not resting on their laurels. We’re seeing ongoing investment in the properties, with the addition of both gaming and nongaming amenities. These investments are clearly designed to attract new customers and spur continued growth.”

In fact, the Baltimore–Washington metropolitan region, which covers the labor market area of the cities of Washington and Baltimore, is now the country’s fourth-biggest casino market, having leapfrogged New York City last year. Nevertheless, Maryland’s casino market has been been posting only moderate year-on-year gains in 2018 compared to the double-digit growth noted in previous years. In 2017, for instance, 30%+ gains were the norm, but this year that figure has slipped to an average of around 6%.

That said, the industry is expected to receive a boost if Maryland legislators get their way and legalize sports gambling within state borders. While a sports betting bill failed in the last legislative session, it is likely to be reintroduced in 2019, and if okayed by lawmakers will then need to pass a referendum by state residents sometime in 2020 before becoming law.