Across the line in Maryland, Penn National Gaming, Inc. is moving and grooving in hopes of a big payoff. The high-stakes battle in Maryland is not good news for Delaware’s struggling racino industry.
The Pennsylvania-based company recently made a bid to build a big racino at the struggling Rosecroft race track in Prince Georges County, Md. Penn National, the owner of Hollywood Casino Perryville. in Cecil County has a plan to spin off the casino real estate it owns into a real estate investment trust, with Penn National managing the casinos.
One of the two Penn National casinos that would not be affected by the spin-off is Perryville. This maneuver could allow Penn National to get around Maryland’s restriction on a company being unable to operate more than one casino in the state.
Penn National last year came out on the losing end of a referendum that allowed table games, but in return authorized a casino in Prince Georges. Also on the way is a casino in Baltimore from industry giant Caesars.
A Prince Georges casino did not sit well with Penn National, which has a big casino complex in Charles Town, W. Va., a 90-minute drive from much of the D.C. area.
Penn National pivoted and proposed the Rosecroft project while quickly adding table games in Perryville, which took a big revenue hit after the opening of Maryland Live near Baltimore. Compounding the misery for Perryville are $6 tolls to the other side of the Susquehanna.
The big barrier to building the $700 million Hollywood casino is MGM Resorts, which has a competing bid to build a Las Vegas-style casino in Prince Georges at National Harbor.
Published reports indicate that Las Vegas-based MGM pulled out all stops in submitting its bid to Maryland gaming authorities. The owner of the Parx gaming complex in Philadelphia has also submitted a bid as it sees more competition for dollars from the once sizable Maryland market.
As for Delaware, prospects are dim when it comes to more casinos. That became clear as the expansion bill from, Rep. Dennis Williams, D-north Wilmington, quickly became stalled in committee. After all, Dover Downs, the only company that publicly reports its casino results, has swung to the loss column. To the north, Delaware Park is cutting back on its racing schedule as purses and gaming revenues decline.
Dover Downs’ performance bears watching, since it has also made big investments in a conference and hotel complex to make the complex more of a destination. Dover Downs has become a go-to conference spot for bigger downstate get-togethers. That adds more overall employment.
Should the losses continue, Dover Downs and the state’s other two casinos will have a strong case for lowering the state’s share of casino revenue. That percentage was increased during a past state budget crisis. – Doug Rainey
