This has been a mixed week for Maryland gaming.  On the positive side, Penn National earned its license for the Perryville site, with a 1,500 VLTs planned for a facility to open in approximately one year: October 2010.  PN may still have some concerns over VLT purchasing, but the company's executives were comfortable enough to post the additional $6 million application fee for a higher number of VLTs.  Penn National's Hollywood casino will be the first I-95 casino to open in Maryland: thus giving it a great advantage in building a loyal customer base over both Baltimore & Anne Arundel casinos.

On the negative side, the two biggest casinos remain on hold, with the Anne Arundel County Council nowhere close to zoning approval for Cordish's Arundel Mills casino and the Baltimore Casino Entertainment Group not yet upping its bid to the max. 3750 VLTs.

The Arundel casino is very problematic, due to the lack of political fortitude by local politicians who appear to be giving in to mis-guided local threats over the broader interests of their constituents.  I've heard repeatedly by the anti-Arundel Mills crowd that Marylanders expected gaming at Laurel: an idea that has no basis in fact if you actually read the gaming referendum.  Arundel Mills is a great location, Cordish is a solid gaming firm and local politics keeps getting in the way to the loss of millions in revenue for all Marylanders. 

The upside is that Cordish may very well end up with Laurel racetrack via Magna's upcoming bankruptcy and could develop a racino there.  Unfortunately, this delays the opening even longer, however, and we're already looking at mid-2011 for an Arundel opening, IF approval comes within the next two months.  Its not idea- Arundel Mills would be preferable given the 67% tax rate which will limit resort development.  If that changes, there will be more potential to develop legitimate resort destinations all over Maryland.

Ultimately, what does the Maryland process tell us so far?

• the real politics of gaming is local; never under-estimate the abilities of determined anti-gaming NIMBY forces to block gaming
• high tax rates will inhibit destination gaming
• VLTs present potential complications if there's ambiguity with regards to terminal control and casino floor management
• economic impacts should come sooner, rather than later, as points of emphasis by gaming supporters
• gaming legalization in one state will spur counter-efforts by neighboring states to face the competitive threat
• budget deficits can support gaming, but too-definitive revenue projections for given years are risky