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Changes To Benefit Casino Operators, Not Education

Published: September 20, 2012 3:18 pm ET

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Legislators in Maryland are proposing a major expansion of casino gaming to generate more money to fund education. But a recently released report indicates the greatest, and perhaps only, benefactors of the changes will be casino operators, who stand to generate nearly three quarters of all additional revenues.

The report put out by the Maryland Budget and Tax Policy Institute, an independent, nonpartisan research and analysis institution, says the casino gaming expansion “increases the share of revenues retained by casino operators, while reducing the shares for education, local governments, and horse-racing-related projects.”

The report, in advance of a referendum to be held in November, is very critical of the claim that education will benefit with the addition of new casinos, table games and longer hours at casinos.

“Maryland’s proposal for expanded gambling is being promoted as a big benefit for local schools. The real winners are the casino owners. There’s no guarantee schools will see any new money at all. Any funding that comes in from the new gambling bill could be completely negated by cuts to other fund sources.”

The report points out that the operator's share of revenues will increase at all of Maryland’s gaming facilities, to as high as 51 per cent of overall revenues and to 80 per cent on the revenues from table games.

“Proponents of the gambling expansion proposal emphasize the benefits to schools from additional gambling. However, nearly three-fourths of the additional revenue is slated to go to the casino operators. Less than one fourth goes to the Education Trust Fund.”

The report is also critical of the bill in its allocation of new funds if any are generated for the government.

“Even this small portion is not guaranteed to result in increased resources for education. The gambling expansion bill would require that the new Education Trust Fund dollars go to schools and to early childhood education programs. But it does not prevent the Governor and legislature from subtracting school aid funds from other sources. In this case, the additional revenue helps the state budget overall (which could be a good thing), but does not necessarily help local public schools.

“Local aid and other funds, like minority business development get less than 5 per cent of the proceeds. Funds that benefit the horse-racing industry actually lose money in this deal (although their funding for facility improvements will be extended by eight years).”

To view the report, click here.

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