The Atlanta Journal-Constitution
Is a casino like this in Atlanta’s future?
Maryland ‘world-class’ resort seen as model. Claims worry others.
OXON HILL, MD. — At night, the 23-story hotel tower of the MGM National Harbor casino resort rises above the Beltway like a glowing glass shard. A few miles west across the Potomac River, sit the wealthy enclaves of Northern Virginia, while the marble monuments of the nation’s capital city beckon to the north.
Inside, workers scurry to assemble a Christmas village scene that will be adorned with some 90,000 flowers under a domed conservatory that’s larger than the one at Las Vegas’ famed Bellagio. A “task force” of seasoned MGM casino supervisors crowd around tables training dealers in the finer arts of poker and blackjack before Thursday’s grand opening.
“This is really a world-class property,” said Lorenzo Creighton, CEO of MGM National Harbor, the resort casino backers hail as the model for what MGM could build in Georgia. “You could put this on the Strip in Las Vegas and it would be competitive.”
The $1.4 billion casino complex is MGM Resorts International’s biggest bet yet on the East Coast. In October, the company’s CEO Jim Murren told some of Atlanta’s most influential business leaders a similar resort in Atlanta could bring thousands of jobs and boost tourism and the HOPE scholarship if — and it’s still a big if — Las Vegas-style gambling were to be made legal in Georgia.
So far, no proposed legislation has been filed for the upcoming legislative session that starts in January. But lawmakers and casino backers expect to see a proposal with two steps:
First, a constitutional amendment that would require the approval of Georgia voters allowing likely up to four casinos across the state, including a $1 billion-plus casino in Atlanta.
The measure will likely require a separate local vote for residents to decide if they want a casino in their community.
The casino push remains an uphill battle. A super-majority of both houses is needed to get the item on the 2018 ballot.
Opposition by Gov. Nathan Deal and House Speaker David Ralston helped quash casino legislation in the past session, and a spokeswoman for Deal said Tuesday the governor’s position hasn’t changed. Past efforts to legalize casinos and horse racing have been scuttled for years by conservative lawmakers in both major parties who see gambling as a moral hazard.
But political handicapping is also complicated following a 2016 election in which a majority of Georgians voted for billionaire real estate magnate and casino owner Donald Trump for president, and the Republican bastions of Cobb and Gwinnett counties narrowly favored the Democrat, Hillary Clinton.
MGM and other casino interests will mobilize dozens of lobbyists and consultants again this year after failing to get a bill passed last winter. This year, gambling supporters are keying off a report — backed in part by casino companies — that showed Georgia Lottery revenue growth by 2027-2028 is unlikely to keep up with the demand for HOPE amid rising tuition costs.
If voters do have the opportunity to legalize gambling, it could lead to casinos in other parts of the state, such as Columbus and Savannah.
Though polling suggests a majority of Georgia voters would approve of casinos — particularly if the revenue were tied to the state’s popular HOPE scholarship program — lawmakers have been hesitant to grapple with the hot-button issue.
“We use children as the reason to do this ... but children are the ones who are in danger the most from the legalization of social vices,” said Mike Griffin, public affairs representative for the Georgia Baptist Mission Board, who fears a spike in gambling addiction that could destroy families.
A recent article in The Atlantic magazine found casinos prey on gambling addicts, with slot machines designed to keep players playing. The article cited independent studies that showed about one-fifth of regular players have a gambling problem, and problem gamblers account for 30 percent to 60 percent of gambling revenues.
“They’re looking for a territory that’s not been abused by predatory gambling,” Griffin said.
‘More than a casino’
MGM Resorts invited an Atlanta Journal-Constitution reporter to Maryland to tour its newest resort ahead of this month’s opening. The resort sits within walking distance of National Harbor, an Atlantic Station-style mini-city with a sprawling convention center about 10 miles south of the U.S. Capitol.
The mammoth MGM resort holds a casino floor the size of a Wal-Mart Supercenter, a 3,000-seat theater, 12 eateries, including restaurants by celebrity chefs Marcus Samuelsson, Jose Andres and brothers Bryan and Michael Voltaggio and a 308-room, four-star hotel.
The entire MGM complex, including the parking decks beneath, totals 3 million square feet or nearly three times the square footage of the Atlanta Braves’ new SunTrust Park in Cobb County. MGM Resorts executives expect 20 million visitors in the complex’s first year — or more than 50,000 people per day.
Lionel Richie, Bruno Mars and Cher are among the acts slated to perform at the resort in its first months of business.
At the core of MGM Resorts’ pitch is that casino gambling is just a portion of what the company calls an “integrated resort” that would be a boon to Georgia’s economy. About 70 percent of the company’s revenue from its Las Vegas resorts comes from non-gambling sources, such as food, concerts and other events, company officials say.
“This is so much more than a casino,” said Patrick Fisher, MGM National Harbor’s executive director of hotel operations.
The hotel, with 308 rooms, can’t handle the demand, spinning business to other hotels.
MGM Resorts promised to hire 3,600 full-time workers when it won a license to open Maryland’s sixth casino, and Creighton said the company will easily exceed that goal, likely employing about 4,000 full-timers by opening day.
The median wage, company executives say, is more than $60,000 a year.
About 6,000 construction workers were employed on the project, with MGM Resorts committed to contracting with 31 percent minority- and women-owned businesses.
On a recent Monday and Tuesday, some 1,500 new hires — from card dealers to valets, cooks to security guards — entered their first days of orientation. MGM Resorts spent $5 million converting a dilapidated school building into a training center, which will later become a satellite campus for Prince George’s Community College.
The college created a training curricula for incoming hospitality and casino workers. Some 49,000 people applied for jobs.
Chanel Pickett, 27, recently started as an assistant beverage manager at MGM. The single mother of a 6-year-old boy is working full-time and is a senior in Morgan State University’s hospitality management program.
She started out at the Horseshoe casino in Baltimore after working for several years in the restaurant industry. She said the casinos brought quality jobs, particularly for people without college degrees.
“A lot of us have families. A lot of us are single mothers and fathers,” she said.
‘Foolish not to look’
In July 2015, the AJC first reported Las Vegas giant MGM Resorts was scouting sites to build a $1 billion-plus gambling resort downtown. Last winter, a bill was introduced in the General Assembly that would change the state constitution and allow up to six casinos.
The measure was later amended to allow up to four casinos, but the matter stalled. Gold Dome insiders think this year could be different.
“Does it have legs? Yes,” said state Rep. Allen Peake, R-Macon, who said he is in favor putting the issue before voters. “There’s no doubt it’s going to be hotly debated in the next session and probably through the governor’s race in 2018.”
But he said GOP lawmakers also will have to face core religious voters who are likely to oppose the matter.
State Sen. Vincent Fort, D-Atlanta, said he will fight vigorously against casinos, but predicted a tough battle in the Legislature. He said casino backers will have to “buy the process” to win a super-majority in both chambers of the General Assembly.
Casinos, Fort said, are “a reverse Robin Hood,” a taking from the poor to give to the rich.
State lawmakers at a Georgia Hotel and Lodging Association luncheon this month said they expect a fight in the General Assembly over how casino revenue would be spent when the debate resumes in January.
State Rep. Stacey Evans, D-Smyrna, said funding for needs-based college aid would be critical to earn her support.
“There is a real need that we can meet,” she said in an interview. “It hurts the students, universities and the economy when students have to leave school over a thousand or even a few hundred dollars.”
Under last session’s bill, tax revenue from gambling would have paid for HOPE scholarships and pre-k programs. One projection said six casinos with a 12 percent tax rate on gambling revenue would generate more than $280 million per year for HOPE programs and at least 10,900 jobs statewide.
Maryland collects more than half of casino revenues left over after payouts to winners in taxes. Ohio, another state that recently legalized Las Vegas-style gambling, collects about one-third.
A study commissioned by Central Atlanta Progress this year tempered some of the rosy industry projections, finding that while casinos could help generate hundreds of millions in tax revenue, it was unclear how much would be new to the state and how much would be created by spending diverted from other parts of the economy.
The report by hospitality consultants HLT Advisory and Horwath ATL concluded that the majority of visitors would be locals, not tourists, and that spending in casinos could “cannibalize” spending that might have gone to nearby restaurants, museums or concert halls and in turn undercut other state and local tax collections.
But the report also estimated that Georgians spend about $570 million annually in casinos out of state, far more than prior projections.
“We’d be foolish not to look at it,” said state Sen. Brandon Beach, R-Alpharetta, who has been a leading voice at the Gold Dome for horse racing and casinos.
Creighton, the MGM National Harbor CEO, said cars with Georgia license plates dominate the parking lots at MGM Resorts’ Beau Rivage complex in Mississippi and Native American casinos in North Carolina.
Creighton said about onethird of MGM National Harbor’s traffic is expected to come from the immediate Washington, D.C., area, with two-thirds coming from elsewhere in the U.S. and abroad.
Atlanta likely wouldn’t draw as many international visitors. But with the world’s busiest airport and status as a top convention market, he said a similar resort in Atlanta could approach the 20 million visitors the company expects to see at National Harbor.
Joe Haggerty, president and CEO of the Alexandria Chamber of Commerce on the other side of the Potomac, said his members initially were concerned when the National Harbor community was built and later at the prospect of a casino siphoning away business. An MGM executive joined the chamber’s board, he said, and MGM has become partners in marketing Alexandria.
“I think they built a very good relationship with the businesses of Alexandria,” Haggerty said.
On a recent cool Sunday evening, Erick Langer and his wife, Yeris Urdaneta, tossed a ball to their toy poodle Luna in Old Town Alexandra’s Market Square, just across the river from MGM National Harbor.
“Gambling is a tax on people who don’t understand statistics very well and don’t know the house always wins,” Langer said. He said he fears gambling addicts will throw away money they can’t afford to lose.
Urdaneta called the MGM project “a monster” that doesn’t fit with its surroundings.
She said she and her husband took a recent trip to see what’s become of Atlantic City, N.J., which has seen casinos go bankrupt, and jobs and tax revenue shrink as gambling has proliferated across the East Coast. Urdaneta said gamblers spend their time and money in the casinos.
“People stay inside, they don’t go to other businesses,” she said.
‘Do a lot better’
MGM National Harbor’s location near the District will insulate it from the casino saturation seen elsewhere in the East, said Gordon Medenica, the head of the agency that regulates Maryland’s casinos.
Though MGM will likely absorb some business from Maryland’s five other casinos, the state is predicting it will see $475 million in annual net tax revenue from MGM by 2019.
“MGM is going to attract a lot of people from Virginia and D.C. and we will benefit from that,” he said.
Medenica said Georgia is a good market for casinos, but he said the proposed 12 percent tax rate floated in the last session’s legislation was low.
“That’s outrageous,” he said. “Obviously, that’s pushed by the lobbyists, but the states can do a lot better than that.”
In 2012, a slim majority of GOP voters showed support for casino gambling on a non-binding ballot question. An AJC poll last year found 62 percent of voters would approve of casinos if the tax revenue were tied to HOPE.
Beach, the Alpharetta state senator, said casinos would bring jobs, investment and be a boost to HOPE that will help “keep our best and brightest here.”
In Maryland, lawmakers approved gambling in 2008 to help fill budget holes. In 2012, as the first casinos were getting started, Maryland voters approved an expansion of gambling to include table games and a sixth casino to keep up with neighboring states.
MGM was a major backer of the 2012 push, reportedly pumping $40 million in ads and lobbying in the 2012 election cycle with no guarantee the measure would pass or that it would get a license to operate a casino.
That willingness to spend alarms Griffin, the Georgia Baptist Mission Board official.
“People need to understand that not all that glitters is gold,” he said.
Griffin said members of the Republican-controlled Gold Dome should remember that most are elected in the primaries, and most primary voters are religious conservatives.
“We don’t need to be putting money over morality,” he said.
‘Gambling is a tax on people who don’t understand statistics very well and don’t know the house always wins.’ Erick Langer Speaking about casinos as MGM National Harbor prepares to open