(Newswire.net — December 11, 2016) — The glitziest casino yet is set to open on December 8th and Maryland officials are appreciating this since they think the MGM National Harbor is going to bring in much new tax revenue for the state. We are faced with a majestic towering structure that is located on the Potomac banks. It marks a great destination for the high rollers that want to play and that come from both Northern Virginia and Washington thanks to the entertainment venues, shops and restaurants that will rival what Las Vegas has to offer.
The problem with the MGM National Harbor is that it does face a lot of competition. This is because online casino games are more popular than ever and there are already 2 really exciting casinos at just a one hour drive distance. Young people are now devoting entertainment dollars to various activities and gambling is definitely a large part of the budget. The problem is that we are faced with people that do not want to play the slot games. For the gambling institutions the slot machines bring in most of the profits. State taxes are thus potentially going to be a lot lower than what many expect.
If we take a look at the state taxes that were generated by the other casinos that already exist in Maryland, it is easy to understand that we are faced with some pretty interesting new records. In May alone the taxes went as high as $104.4 million. The problem is the state is still not taking in as much revenue as the analysts estimated because of gambling operations.
The budget analysts said that Maryland is going to gain $662 million that can go towards the Education Trust Fund from casino operations, with most of it coming from slot machines. Table games are now so much more successful than what the analysts did predict but the really bad news is that a lot less is coming from the slots. Maryland ended up with only $400 million that was added for education purposes from gabling taxes. This is close to 40% less than what it was expected.
When the new MGM casino will be launched, the state will surely not get so many benefits as it expected. We are faced with a drop in the slot tax rate for the other casinos because of the appearance of the competition. Maryland Live, for instance, is going to keep 49% of the slots proceeds and the popular Horseshoe will get 46%, up from the previous 39%. This practically means the new opening is going to surely bring in fewer taxes for the state.
In September we saw estimates that there will be a $170 million increase in how much money the Education Trust Fund can get in 5 years. Casino operators are expected to get $443 million more. If the fully mature MGM activates by the year 2021, the taxpayers will benefit less. This is a certainty. However, nobody really knows if something will change and people will start playing more, thus bringing in more taxes.