Penn National Gaming, Inc. Chairman Peter Carlino said Thursday the company's multimillion dollar gamble to defeat a casino expansion issue in Maryland has been worth the effort.
The regional casino operator, which owns the M Resort, has been the funding force behind the defeat of Maryland's Question 7, which would allow a Las Vegas-style casino to be built in suburban Prince George's County.
Carlino reiterated on a conference call with analysts that Penn is not opposed to the casino. However, the company believes its Rosecroft Raceway was a better location than the 350-acre National Harbor development. MGM Resorts International is financially backing passage of Question 7 and plans to build a $700 million casino complex at National Harbor, which is located along the Potomac River, about 10 miles from Washington, D.C.
"We intend to continue to aggressively inform Maryland voters on what we believe to be a flawed process that handicaps competition for a potential sixth casino license in Prince George's County for National Harbor," Carlino said.
Penn National spent $19.2 million on lobbying efforts in Maryland in the three months ended Sept. 30, the company said. The figure includes lobbying fees during the special session held in August that resulted in lawmakers passing a bill sending the issue of table games and a sixth casino license to the voters.
Through last week, Penn National has spent $25.1 million on funding the advertising effort behind the anti-Question 7 campaign.
Question 7 also allows Maryland's existing slot machine-only casinos to add table games and would lower the state's industry-high 67 percent gaming tax.
Penn National operates a casino in Maryland's Cecil County. Carlino said table games would eventually come even if Question 7 fails on Nov. 6. He thought Maryland lawmakers would rewrite "a more balanced and reasonable" gaming expansion bill.
"I don't think the issue is dead by any means," Carlino said. "There will be table games in Maryland."
Meanwhile, in the third quarter, Penn National saw its net income fall 35 percent to 46.4 million, compared with $70.8 million in the same quarter a year ago. The figure translated into earnings per share of 44 cents, compared with 66 cents in the 2011 third quarter.
Analysts surveyed by FactSet predicted earnings of 55 cents per share.
The company's net revenues in the quarter were $707 million, a 1 percent decline from $710.9 million in the 2011 third quarter.
A year ago, the company's third quarter included a large increase related to sale of interests in the Maryland Jockey Club.
Carlino said the current year's quarter benefitted from the opening of the Hollywood Casino Toledo (Ohio) in May and last summer's acquisition of M Resort. Earlier this month, Penn National opened the $400 million Hollywood Casino Columbus in Ohio.
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