Talk about a “game changer.” Once hailed as an economic engine that would reduce Baltimore property taxes and shower local communities with gambling revenues, Horseshoe Casino Baltimore was quietly designated a recipient of gambling impact funds today.

Bunched together with other expenditures, the Board of Estimates diverted $3 million from the Casino Local Impact Fund (CLIF) to bolster Horseshoe’s private security force because city police could no longer “consistently” provide the necessary manpower.

There was no announcement of the policy change and reallotment of funds, which was ratified by Mayor Brandon Scott, City Council President Zeke Cohen and Comptroller Bill Henry.

The agreement hands over $500,000 a year for six years to CBAC Borrower LLC, majority owned by Caesars Entertainment, to hire personnel to protect casino patrons “from dangers when visiting and/or patronizing the property.”

The money comes from revenues collected from Horseshoe, Maryland Live! and MGM National Harbor earmarked by the Maryland legislature to “directly benefit” communities that suffer negative impacts from their proximity to casinos.

Such benefits include public infrastructure investments, sanitation, public safety, community development, including housing, and other public services.

Currently, 17 neighborhoods share in CLIF funds, including Federal Hill, Ridgely’s Delight, Sharp-Leadenhall, Cherry Hill, Mount Winans and Westport. Some $730,000 was distributed to 23 community projects last December.

Spillover Benefits

The city argues that Horseshoe Casino is eligible for CLIF money because it is a “supporting anchor institution” that provides spillover benefits to neighborhoods.

“Supporting anchor institutions and the spillover benefits their presence yields to communities is an eligible use of CLIF under the state law authorizing the City to receive said funds for community development purposes,” argues the 13-page agreement drafted by the city law department.

The agreement did not go through the South Baltimore Gateway Partnership, according to documents in the comptroller’s office. Nor is it part of the South Baltimore Gateway Master Plan, adopted by the city in 2015 as the guiding document for allocating CLIF funds.

The document was auto-signed on March 3 by Baltimore Planning Director Chris Ryer and CBAC’s Senior Vice President Jacob Witmer and approved today by the BOE.

It permits the casino to hire personnel to “monitor” parking areas and pedestrian routes around the casino, including the Warner Street Entertainment District, and to provide paramedics or other medical professionals to respond to emergencies.

Diminished Returns

Made retroactive to July 1, 2024, Horseshoe will receive its first CLIF payment of $250,000 in coming weeks, with a second payment due by July 2025 and additional $250,000 payments every six months through 2030.

It is unclear whether the police department will continue to assign staff to patrols in and around the Horseshoe property, as it did during its first years of operation.

Revenues at the casino have been on a steady decline since 2017 (here and here) when MGM National Harbor opened in Prince George’s County and Maryland Live! expanded its hotel and entertainment facilities at Arundel Mills.

Located on Russell Street amid a string of gas stations, two public storage facilities and a Holiday Inn Express, the casino’s revenues dropped by 6% last month compared to February 2024, and are half what they were a decade ago, according to the State Lottery and Gaming Control Agency.

The facility was opened with great fanfare in August 2014, with Mayor Stephanie Rawlings-Blake promising it would provide thousands of new jobs, generate at least $1.3 million a month in CLIF funds and bankroll a property tax reduction for homeowners through a lucrative ground rent lease.

The ground lease never lived up to the city’s expectations and has made no impact on the property tax rate.

Last month, the casino generated less than $560,000 in CLIF funds, according to the gaming control agency.