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Chairman's Message, Gambling, O'Malley

More Questions Raised about O’Malley’s Gambling Special Session

Posted: July 7, 2012 at 7:53 am   /   by   /   comments (0)

Unwary tourists to large cites often become victims to a purported game of chance, that is really a scam for the unwary, three card monte.  Victims are asked to pick out a pea hidden under three cards, but game is in fact a con.

With the recent legislative special session Marylanders are being treated to similar con, although on a far larger scale. If gambling is, as it is sometimes called, a tax on the mathematically challenged, then Democrats must be counting on similar voter math confusion.

Consider the basics. Taxes on each of the five currently authorized casinos are being reduced, increasing the amount each operator keeps by 50%, in order to “compensate” them for the addition of a sixth facility.

Republican Delegate Herb McMillan and others have pointed to a Department of Legislative Services report that says the state actually will receive less from slots after licensing the sixth casino and giving the tax breaks, than it would have received from taxing slots at the current rate at five casinos. Under the bill, the tax on the casino’s income from slots is cut from 67% to as low as 49% and operators get an exemption from paying county personal property tax on its equipment, including its slots machines.

The Baltimore Sun reported: “The gambling expansion bill crafted by a House panel will yield an additional $174 million in state revenue in 2016-2017, but more than three-quarters of the money comes from a reform that could have been adopted without controversy had it been considered on its own. Table games and a new Prince George’s casino — the gambling expansion measures that tied the General Assembly in knots this spring and prompted the rare August special session — will account for only about $40 million of that total, according to legislative analysts.”

But there is more.  Proponents of the proposed “sixth” casino to be located at National Harbor have kept deliberately avoided discussion of the massive cost of road improvements being contemplated by the State Department of Transportation in order to handle the traffic demands.   The Department is considering a widening, for many miles, of the already congested Maryland State Route 210 and the Kerby interchange of the Capital Beltway.  The total cost of the various related transportation projects comes to approximately $400 million.

Not only is that $400 million not being treated as a cost of a National Harbor casino, it reflects transportation funds that would be unavailable for projects that would aid commuters stuck in traffic trying to get home or to work quicker.

Think of the special session again as a political three card monte game with the pea constantly motion.  The state gets more revenues coming from expanding gambling to include table games.  While a sixth casino added, the extra revenue from that is offset by tax reductions to the other five operators.

So who is the sixth operator that the Governor and legislative Democrats are so desperate to welcome to Maryland that a special session was necessary?

Although the initial legislation has modified to suggest a possible alternative, the clear preference expressed by pro-casino advocates is for MGM, a company that the New Jersey Division of Gaming Enforcement considered unfit to operate in New Jersey. MGM has the exclusive rights for gambling at National Harbor.

The New Jersey Division of Gaming Enforcement reviewed the firm’s background, concluding: “From the beginning of its efforts to enter Macau, MGM pursued partnerships with persons that it knew were associated with those aspects of gaming in Macau most heavily penetrated by organized crime.”

“Numerous governmental and regulatory agencies have referenced Stanley Ho’s association with criminal enterprises, including permitting organized crime to operate and thrive within his casinos.” The report went on to say that a private-investigation firm employed by MGM Mirage concluded that Stanley Ho was “linked closely” to 14K and Sun Yee On, two major Macau “triads,” or organized crime groups, and also had links to Russian organized crime and North Korean authorities. They partnered with Ho anyway.

As a result of these conclusions, MGM was required to divest of their New Jersey gambling interests.

Think of it, the state of Maryland is twisting itself like a pretzel, including offering generous concessions to other operators that reverses the prospect of additional revenues, in order to accommodate a casino operator, MGM, thrown out of New Jersey because of criminal ties.

It sure makes you wonder what really is going on, does it not?

Mark Uncapher
Montgomery County Republican Chairman