| LOS ANGELES
LOS ANGELES Nov 7 MGM Resorts International
won its costliest political gamble to date after
Maryland voters passed a divisive gambling expansion ballot that
enables the casino giant to move forward with a bid to build an
$800 million resort casino in the state.
Approval on Tuesday of the ballot measure, known as Maryland
Question 7, will permit bidding for a sixth casino in the state
and is expected to pave the way for a new MGM casino at National
Harbor in Prince George's County, which it says will create
2,000 construction jobs and up to 4,000 permanent jobs.
National Harbor is located on Potomac River, just minutes
from Washington D.C.
MGM paid the majority of the $45.3 million spent by a
consortium including Peterson Development Cos LLC and local
unions that backed the measure, against local casino owner Penn
National Gaming Inc. Both sides anteed up a combined
$90 million dollars on the ballot, in what Maryland officials
said was a record amount spent on any one initiative.
"The people of Maryland have delivered a clear message,"
said MGM Resorts Chief Executive Jim Murren, who in a recent
interview described the amount spent as "epic."
Penn National led the opposition and spent $42 million to
block its passage in a bid to protect its Rosecroft Raceway
facility in Fort Washington, Maryland.
Penn has long said the raceway will not be seriously
considered as a potential site for a sixth casino license
against MGM. It bought the raceway for $10.25 million in a
bankruptcy auction in 2011 in hopes of revitalizing it as a
Penn National also operates the Hollywood Casino at Charles
Town Races in neighboring West Virginia, and the Hollywood
Casino in Perryville, Maryland.
Penn has long complained that its prospects were scuttled by
a "back-room" deal involving MGM and officials of National
Harbor. MGM already has an agreement with developer Peterson Cos
to build the casino in National Harbor.
"We are obviously disappointed. We appreciate all those who
stood up against this unseemly back-room deal with National
Harbor ..." Penn National said in a statement on Wednesday.
The measure sets the stage for Maryland's largest gambling
expansion since 2008, when voters approved a ballot measure for
slot machines at five locations.
If MGM wins the bid, as is widely expected, the new casino
would open in 2016. "We think we'll win, but any number of
companies can bid," Murren told Reuters recently.
Shares of MGM Resorts fell 2 percent to $10.11 a share,
while Penn was off 1 percent to $39.60 a share.
Analyst Bill Lerner of Union Gaming called the vote a
negative for Penn and a positive for MGM, saying a new MGM
casino in National Harbor will hurt Penn's West Virginia casino.
"While the (MGM) casino wouldn't open until 2016 we think
the impact to Charles Town in today's dollars is worth roughly
$2.50 to $3 per share," he said, referring to Penn shares.
Spending by both sides on this issue hit a record, according
to Maryland officials.
"Spending on this one ballot alone totaled 60 percent of the
entire Maryland gubernatorial race in 2006. The amounts spent on
this election have never been seen in the history of Maryland.
You had a lot of competing interests with very deep pockets,"
said Jared DeMarinis, director of candidacy and campaign finance
for the Maryland State Board of Elections.
By comparison, spending on the four-year Maryland
gubernatorial election cycle ended Dec. 31, 2006, which covered
several candidates and ballots, was about $155 million, he said.