Extranormal business considerations and the Penn National casino proposal in Prince George's County
Penn National, which proposes a casino location at a less desirable facility in Prince George's County, the Rosecroft Racetrack, as opposed to the Growth Machine desired location of National Harbor, has offered to give all of the profits to Prince George's County, in order to win the bid.
See "Penn National: 100 percent of casino profits will go to Prince George's County during first 15 years" from the Washington Business Journal. and "Casino bidder offers hundreds of millions in profits to Prince George’s hospital, teachers" from the Washington Post.
It's a brilliant gambit.
Obviously they propose this because of cross-subsidies available to them from their broader portfolio, how a National Harbor casino would affect their overall profitability, and because it is a way to keep out and lower the profits of a competitor (not unlike how in its heyday, KMart "overstored" the Detroit area--its home base--to keep competitors at bay). See "The enemy of my enemy is my friend: casino edition (a/k/a "mutally assured destruction")."
Although the justification is to keep the racetrack going with the extra revenue stream ("Penn National Gaming Inc. makes pitch for casino at Rosecroft Raceway," Washington Business Journal).
Penn National proposes that PG County use the money to fund a system of public health clinics (actually I suggested that such a system be paired with a new county hospital system, see past blog entries "Disruptive Innovation Once Again" and "When the problem is defects in the structure of "the market", financial incentives won't do much good: Maryland's health enterprise zones"), pensions for teachers, and funding to community organizations located specifically within the Council District where the racetrack is located.
What I would recommend instead that if PG County and the State Casino Board selects this bid, that instead PG County come up with its own priorities. This is the course I recommend generally with regard to what are called proffers or community benefits. See "Community Benefits Agreements (revised)" and "Social infrastructure (community benefits)."
And as much as I think National Harbor is gross, it probably makes more sense to put a casino there ("MGM unveils details of proposed $800 million National Harbor," Springfield Republican, Massachusetts).
Instead, PG County should seek a counter offer from that group which would probably be financially similar, and use the money to pay towards high capacity transit connections, such as an extension of the Purple Line light rail from Alexandria to New Carrollton.
Sierra Club concept diagram, Purple Line light rail system, Washington Metropolitan Area. The leg from Bethesda to New Carrollton is currently being designed and is expected to break construction within 2 years.
That being said, casinos generally are gross and reliant on revenues from people who ought to be spending their money on other things. But proximity to DC will probably make a PG County casino a winning proposition.
If the county uses the revenues wisely, they could benefit. Although it's not a sure thing. See "What to make of casinos as an "urban revitalization" method and detroyer?" and "Casinos in Atlantic City may be a losing proposition."
And if it is not part of a project that strengthens connections and intensify within the county then the desired goals and objectives will not be attained. See "Can enclave development "save" Prince George's County?"