An event that is likely to take a significant chunk of revenue from the West Virginia Lottery is one-step closer to happening.
Last Thursday, officials with the Prince George’s County Planning Board in Maryland unanimously approved MGM Resorts International’s plans to build a luxury casino resort on the banks of the Potomac River at National Harbor.
The $925 million gaming complex, which is a short drive away from Washington, D.C., is now on track for a July 2016 opening.
That’s not good news for the West Virginia Lottery or its casino cash cow, the Hollywood Casino at Charles Town.
Lottery revenues have already been hurt for some time by out-of-state casinos siphoning customers and revenue from the Northern Panhandle casinos, Wheeling Island and the Mountaineer Casino in Chester.
But the Charles Town casino is the state’s prized possession. Out of the four state racetrack casinos, Charles Town — located a short drive from the nation’s capital — brings in more revenue than the other three combined.
It’s that revenue flow that led Maryland residents to pass measures in recent years expanding gambling in that state. And Penn National Gaming, which owns the Charles Town casino, has fought that expansion tooth-and-nail.
The company sank $40 million in a failed effort to block the most recent ballot issue authorizing construction of the Prince George’s County casino.
The casino has already been suffering from competition since 2012, when the Maryland Live! casino opened outside of Baltimore.
The Associated Press reported last month that Charles Town’s table-game revenue for the last six months of 2013 was down 34 percent from the same six-month period in 2012, a decline of nearly $30 million. That cut the state’s share of the casino’s revenue by about $10 million, from $28.2 million to $18.6 million, over the same period.
During an earnings call last week, Penn National officials said the casino was already suffering from “saturation shock.” As a result, they lowered their earnings guidance for the rest of the year to adjust for the reduced business.
That move is just to account for the existing competition from Maryland Live, and unrelated to the new casino opening planned for down the road.
The AP said the new MGM casino could be a “death knell” for Charles Town.
While that is extreme, the planned casino and resort will provide the Hollywood Casino with some very tough competition.
The Prince George’s County casino and resort will feature a 21-story 300-room glass-tower hotel, 3,600 slot machines, 140 gaming tables, a 3,000-seat concert theater, several celebrity chef-driven restaurants, a spa and high-end retail stores spread across a 23 acre tract near the Capitol Beltway, according to The Washington Post.
That’s a bit more than the Hollywood Casino, which features 3,200 slots and about 124 gaming tables and is about a 70-minute drive from Washington. The one thing Charles Town will have that MGM National Harbor will not is live horse racing.
That will help some, but it likely won’t be enough to avoid a steep drop in business once the new MGM casino opens in 2016.