The MGM National Harbor, which the company refers to not as a casino, but as a “luxury resort,” opened in early December.
By Mark R. Smith
December 8th, 2016, was a day that will live in Maryland gaming and resort history with the opening of MGM National Harbor, the $1.4 billion, luxury destination at the foot of the Woodrow Wilson Bridge in Prince George’s County.
Despite the hoopla, some observers feel that the MGM’s opening will have a negative impact on the state’s other two large facilities—the independently-owned Maryland Live!, at Arundel Mills, and the Horseshoe Baltimore, which is located on Russell Street and owned by Caesar’s Entertainment.
Others, however, do not. Their feeling is that after an initial market reaction to MGM’s presence, it will become apparent that all three entertainment facilities cater to separate market sectors. At the Cordish Companies-owned Maryland Live!, for instance, management has been making enhancements that appeal to its customer base since almost day one, which is evidenced by construction inside and out the casino.
The most recent news at Maryland Live! occurred last September, when owner David Cordish, Chairman and CEO of the Cordish Companies, and local dignitaries officially oke ground on the much-discussed $200 million Live! Hotel and 4,000-capacity conference center/performance venue that is rising adjacent to the casino; later, on the heels of that first dig came word of Cordish buying a nearby hotel and re anding it Live! Lofts.
That flurry of activity coincides with the release of the November numbers from the Maryland Lottery and Gaming Control Agency, which reported the latest in a recent string of strong months, with revenues for the state’s five casinos—which also include Hollywood Casino Perryville, in Cecil County; and Rocky Gap Casino Resort, in Allegany County— at $91,969,393, an increase of 2.5 percent from November 2015.
The Mills District
At Maryland Live!, the ground eaking came after the relocation of a section of Arundel Mills Circle further west to accommodate construction, which will also include more lights and more parking, says General Manager Rob Norton.
Norton explains how the addition of the hotel will not so much add to Anne Arundel County’s room inventory, but serve “as a new market for the casino,” which reported $50,247,300 in revenue in November.
“Occupancy around the BWI Business District stands at around 80 percent, but it gets even stronger around the Mills,” Norton says. “But those hotels won’t be the casino hotel’s competition,” as many of the rooms will be offered as comps to the casino’s VIPs. “Many of our customers come from two hours-plus away, so we can start focusing on a fly-in customer base, as well.”
Even without the hotel, Norton says that he’s “very pleased” with the financial performance of the casino in the past year. “We’re still exceeding analysts’ expectations and are above the revenue numbers we [posted] prior to Horseshoe opening. It’s a testament to the fact that we, as a family-owned [casino], create a different experience here.”
David Cordish, center, and local dignitaries shared the first dig for the Live! Hotel.
So, today, Norton isn’t focused on the new competition, as much as expanding Maryland Live’s market. The opening of the Horseshoe “really hasn’t been much of a factor. We saw a ief and very minor impact during the first few months,” he says.
“What gets lost in this conversation,” Norton says, “is that Maryland Live! is the largest casino in the state. The MGM is an optical illusion in some ways; we’ll have more slots (at about 4,000, down from 4,750 when the casino opened), more tables and more poker, more hotel rooms, and, at least, a similar number of restaurants. Part of our overall experience is the Arundel Mills district.”
But do know that folks in corporate are keeping alert.
“Just like when we had the new competition in Baltimore, we spent significant time laying out our strategies, and we’re holding our plans close to the vest,” Norton says. “The hotel was coming anyway, since that was part of the master plan.” What wasn’t part of the master plan was the purchase of a nearby property that is being anded as Live Lofts, a 250-room, off-site hotel on New Ridge Road that used to (simultaneously) house the Hilton Garden Inn and the Homewood Suites. It is slated for a $3 million renovation.
At the Gateway
While there aren’t similar plans for a hotel at the Horseshoe in Baltimore—which opened in August 2014—the casino “has partnerships with multiple hotels located in close proximity to the casino [which have] booked more than 20,000 room nights,” says Noah Hirsch, Horseshoe casino’s vice president of marketing.
While that’s a convenience for its clientele, Hirsch says that from the casino’s earliest planning stages, “it was envisioned as the heart of Baltimore’s southern gateway, a project that would revitalize the community” and extend Baltimore’s tourism district south from the Inner Harbor.
“The addition of the casino has laid the groundwork for new business enterprises, such as large bars like The Game and Hammerjacks [which is slated to open this year], and other development projects that are being considered for the immediate area,” he says, while stressing that Maryland’s casinos “were designed to be very different facilities that cater to very different markets.”
“Horseshoe Baltimore was never intended to be the state’s largest or to hire the most employees,” says Hirsch of the casino, which reported $28,503,083 in revenue in November. “Rather, it is a more intimate atmosphere that appeals not only to local customers, but also tourists [and visitors who are] attending conventions, trade shows, and sporting events” at nearby Oriole Park at Camden Yards and M&T Bank Stadium.
And while there will be a great deal of interest in the new hotels at Maryland Live! and the MGM, Hirsch feels the market will settle. “History shows that customers will try the newest offering in the oader market, so we fully anticipate the state’s sixth casino will enjoy its share of visitors when it opens. However, as time passes, we believe the Prince George’s County facility will draw the majority of its customers from south of Baltimore.”
Love That View
Apparently, the people who are running the MGM National Harbor feel likewise, since it’s positioned alongside Route 95 at the state line of Maryland and Virginia—which has a lottery, but doesn’t have casinos—and points beyond.
“I think it’s a great sign that a third major casino is opening in the state in four years. It demonstrates the viability and demand for gaming in Maryland,” says Patrick Fisher, director of hotel operations for MGM National Harbor.
“The MGM National Harbor is inging an entirely new experience to [the metro Washington, D.C., area and the region]. It’s about the integrated luxury resort casino, but the casino is just part of the story,” Fisher says. “We’ll also offer a great selection of food and beverage outlets, as well as 18,000 square feet of anded retail.”
The resort will also include a 3,000-seat Live Nation concert venue for various events, and about 27,000 square feet of salon and spa space. “It will be different, with offerings unparalleled in the region,” Fisher says, adding that what will make the 308-room hotel property stand out “will be the unparalleled views” of not only National Harbor, but the Potomac River, Old Town Alexandria, and the monuments in D.C., from rooms with floor-to-ceiling glass. “Clients who are not in the area to gamble or take advantage of what else the MGM offers” will still want to stay here, Hirsch suggests.
So, like the management at Maryland Live! and Horseshoe, the powers that be at MGM see the opening of its new resort as the creation of a new market. “If you fit this new property on The Strip in Las Vegas,” Fisher says, “it would be able to compete with any of the big casinos.”
Regional Player
Another part of this large puzzle concerns employment. Lots of it.
“The new hotel at Maryland Live! and its related properties means hundreds of new jobs,” says Mary Ellen Mason, director of the Hotel, Culinary Arts & Tourism Institute at Anne Arundel Community College (AACC), noting the school has “trained more than 2,500 students in three years for various opportunities within the casinos.”
AACC partnered with Maryland Live! before it opened, initially offering classes at Marley Station, in Pasadena. Since then, it’s built four state-of-the-art casino labs at its Arundel Mills campus. “We offer face-to-face dealer training during all shifts, since these [students] may be working all times of the day or night,” Mason says. “We’re also offering the usual courses in culinary arts, bartending, hotel and restaurant management,” etc. “It’s become a thriving industry for the state with multiple career paths, and we will remain part of it.”
That’s the kind of confidence that surfaces in a maturing market. David Schwartz, director of the Center for Gaming Research with the University of Nevada Las Vegas says, “That’s evident, because the existing casinos are all catering to certain sectors of that market.”
That thought was shared by James Karmel, president of Gaming Atlantic and history professor at Harford Community College. “Maryland Live! is set up for the local region, and the Horseshoe’s market is pretty much around the city, and maybe southwest Baltimore County. The MGM has a strategy to attract people from outside of the Baltimore-Washington region, who also want to come visit and see the D.C. attractions,” Karmel says. “It may appeal particularly to [the clientele in] areas like Southern Virginia, and North and South Carolina. Remember, the Washington Redskins’ pre-expansion reach used to extend to South Carolina.”
The 310-room Live! Hotel, at Maryland Live! Casino, is expected to be complete by early 2018. The 350,000-square-foot property features a 17-story hotel tower, making it the tallest building in Anne Arundel County.
As was the case with the pre-1995 Redskins, that means a bigger market. “The market looks to me like a chocolate bar that’s cut up, sometimes in big pieces,” Karmel says. “And the Horseshoe and the MGM have made [the bar] bigger and [created] an expansion of the revenue pool.”
In fact, Schwartz feels that Maryland’s gaming industry could even expand. “It’s possible that the state could pass an updated law that would allow for more gaming licenses, after a serious analysis of the market. You would need to have the regional draws to get more people as you get more casinos in that area, but it’s hard to say what may happen with Virginia and North Carolina at the moment,” Schwartz says. “Gaming laws could be passed there, eventually, but that’s up to the politicians.”
For now, he says, Maryland has taken its stand in the industry as a regional player.
“When you compare Maryland to other locales around the country,” Schwartz summarizes, “it has a great deal to offer.”
