Are Gambling Ads Bluffing on Education?

Originally Appeared on Montgomery Village Patch

MPPI in the News Sebastian Montes Oct 25, 2012

The ads seem clear about next month’s referendum on expanding Maryland’s casino industry:

“Question 7 will produce $199 Million in new funding for Maryland schools every year,” says


“There is nothing in Question 7 or state law that requires the state to use gaming revenues to spend more on education than it would otherwise,” according to

The truth, according to news reports, appears to be: Both. 

With only two weeks before voters decide whether to add a sixth casino and to allow Vegas-style table games like poker and roulette, opponents and supporters have spent more than $50 million on the ad war to persuade voters ahead of the Nov. 6 election—spending unprecedented in Maryland, according to the Washington Post. More than $20 million has come from MGM Resorts International.  That company, along with Peterson Companies, presumably has the inside track on the would-be sixth casino in Prince George’s County. That has been surpassed by nearly $30 million spent by Penn National Gaming, owner of the Hollywood casino in Charles Town, WV, where one-third of the customers are Marylanders.

Most of their barbs back and forth have revolved around how much, if at all, gambling revenues impact education funding.

“If you look at the history of what we’ve done, it’s been one of the biggest increases in education funding in our state’s history,” and claims to the contrary are “total crap. Hogwash. It’s a bunch of West Virginia casino hooey," Gov. Martin O’Malley said earlier this month, according to The Gazette.

The Education Trust Fund—created when voters approved gambling in Maryland in 2008—is comprised of casinos’ licensing fees and nearly half of their revenue. By law, that money must be spent on schools. But as Neil Bergsman, director of the nonpartisan Maryland Budget & Tax Policy Institute, told The Gazette, state lawmakers have used the Education Trust Fund to offset spending that would have otherwise come from the state’s general fund, thus enabling non-school expenditures without raising the amount spent on education.

Question 7 supporters say that the funds have shielded Maryland public schools from the kinds of deep budget cuts seen in other states. But critics of the state's dependence on casino revenues doubt Question 7 will raise the amount of money actually spent on education.

"This does not mean schools will see a penny more than they already get," Christopher B. Summers, founder and president of the Maryland Public Policy Institute, wrote in an op-ed with The Examiner. "If Question 7 passes, Maryland lawmakers will likely divert existing school funds to other pet projects once casino revenues start rolling in."

So far, the anti-7 ads appear to be having an effect on voters, according to a recent Washington Post poll. While 10 percent of respondents said they are “very confident” the measure would boost money to education, more than three times as many said they were “not confident at all.”

Overall, voters remain sharply divided on Question 7, according to the poll: 46 percent in support and 48 percent opposed.

The Washington Post’s most recent editorial on the issue concedes that “lawmakers would be free to redirect other funds away from schools to competing priorities.” But the debate over schools funding is a distraction, the op-ed says.

“The real question for Marylanders is this: Having already approved five casinos in a 2008 referendum, why not agree to a modest expansion that would generate tens of millions more in annual tax revenue for the state; keep gambling proceeds from leaching into neighboring states such as West Virginia; and create several thousand new jobs in the bargain? At this point, common sense argues in favor of a ‘yes’ vote."