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Chairman's Message, Gambling, O'Malley

O’Malley’s National Harbor Casino Operator Banned from Atlantic City New Jersey

Posted: July 7, 2012 at 7:53 am   /   by   /   comments (0)

The unsavory intersection between politics and gambling has been a recurring aspect of Maryland history. The state first legalized gambling in 1791, when the legislature authorized the issuance of “lottery grants.” After these grants got out of hand, Marylanders ran out of patience with gambling interests. By 1860 the last state-sanctioned lottery closed.

The gambling pendulum swung open again in the forties after which nearly 5,000 legal slot machines operated around the clock in Anne Arundel, Calvert, Charles, and St. Mary’s counties. By the sixties, disgust with the culture of political corruption the slots created triggered an anti-gambling movement. After a protracted legislative battle the last legal slots were finally closed down
in 1968.

In the seventies, Maryland’s Governor was indicted in a scandal involving the award of lucrative “racing dates” to favored tracks. After politically connected insiders bought a racetrack with only 18 “days,” the Governor reversed himself and joined campaign to increase them to 94.   It is in this context that Governor O’Malley’s announcement of a deal with MGM Resorts International to build a casino at National Harbor meets knowing dismay. Unlike the operators for Maryland’s the original five casinos, selected through a competitive bidding process, MGM was selected as a result of a secret deal with the Governor.

Tony O’Donnell

Republican House Leader Tony O’Donnell describes it well:

“The arrogance of this process is just nauseating. The notion that this Governor would strike some backroom deal with MGM and Prince George’s County Senator Mike Miller is quite astounding. We find no redeeming qualities to this back room deal or to some of its principles. Offering these special interests a lower tax rate and no competitive bidding for a new location and then turning those same interests loose to hound the General Assembly sounds more like something out of a Mario Puzo novel than what should be the transparent operation of government.

Regardless of how you feel about expanding gambling, this aberrant and low-brow behavior does not pass the smell test. I think several dozen legislators, including many who otherwise support gaming expansion, may be reluctant to participate in such a disgusting process. In fact, many of our caucus members are advocating a boycott to help engage Marylanders and to advise the rest of the nation of our disgust should this Governor call a Special Session for his ‘special’ friends.”

Earlier this year the Baltimore Sun reported that Caesars Entertainment, the company hoping to win a casino license for Baltimore, had contributed to $150,000 to the Democratic Governor Association chaired by Governor O’Malley. At the time the Governor’s spokesman’s defended him, saying he was insulated from any inference of wrongdoing because the casino selection was made by an independent board appointed by O’Malley, the House speaker and the Senate president.

No such “insulation” exists for National Harbor. In fact the Washington Post quotes a gambling industry source as commenting “It’s safe to say that we have viewed the process from the very beginning as just a sleazy process that has unfolded in Maryland.”   So who has Governor O’Malley selected?

The New Jersey Division of Gaming Enforcement reviewed O’Malley’s firm’s background, concluding: “From the beginning of its efforts to enter Macau, MGM pursued partnerships with persons that it knew were associated with those aspects of gaming in Macau most heavily penetrated by organized crime.”

“Numerous governmental and regulatory agencies have referenced Stanley Ho’s association with criminal enterprises, including permitting organized crime to operate and thrive within his casinos.” The report went on to say that a private-investigation firm employed by MGM Mirage concluded that Stanley Ho was “linked closely” to 14K and Sun Yee On, two major Macau “triads,” or organized crime groups, and also had links to Russian organized crime and North Korean authorities. They partnered with Ho anyway.  New Jersey MGM Report   Their conclusions about the business relationship between Stanley Ho and O’Malley O’Malley’s “sole-source” National Harbor casino operator led to their being required to divest of their New Jersey gambling interests. Rather rescind their license immediately New Jersey gave MGM 18 months to sell their interests in the state but required a trustee be appointed if the sale took longer.

Think of it, a casino operator thrown out of New Jersey because of criminal ties, but personally welcomed to Maryland by Governor O’Malley. Close your eyes and you will not have much trouble visualizing the negative television commercials running in 2015 a head of the Iowa caucuses.

Mark Uncapher
Montgomery County Republican Chairman