When Horseshoe Casino opened in Baltimore, it was expected to generate $35 million in revenue per month. Instead, it’s averaged about $22 million. And that’s helping to create a budget shortfall for the city.
Of the $14.6 million the city was expecting to collect from the casino, only $8 million — the minimum in annual ground lease payments — is likely to come through. That and police overtime spending has put Baltimore $14.8 million in the hole. (Interestingly enough, Baltimore’s rising property values are probably going to give the city $32.4 million more in property taxes for fiscal year 2015 than originally expected, but the city is prohibited from using that money to bridge the gap.)
Deficit aside,the Baltimore Sun sees a few silver linings to Horseshoe’s underperformance. One is that Maryland Live! is overperforming. (Nice for the state, but it doesn’t help us as much.) The other two are dubious. The Sun finds it encouraging that Horseshoe is generating more revenue from table gaming than from slots — suggesting that it’s collecting the disposable income of the well-off more than it’s snatching the grocery money of the poor. That’s a qualified victory if I ever heard one!
Further, the Sun finds the apparent resilience of Maryland Live! to be a good omen given that yet more competition is coming in the form of the Prince George’s County casino. But considering the “massive revenue drops” at Perryville’s Hollywood Casino after Maryland Live! opened, the question of how much Maryland casinos will cut into each other’s business is unknown at best.
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