Baltimore took a big bet on casino gambling. A decade later, is it paying out?

The screens flash. The machines chime. The chandeliers twinkle. There are free soft drinks to keep you caffeinated, a phone-charging station at the base of your slot machine and not-so-discreet cameras to track your every move.

At the Horseshoe Casino in Baltimore, the only thing missing is a crowd of gamblers.

Now open for a decade, the casino was supposed to anchor a glittering sports entertainment district near downtown. Instead, cars hurtle through an industrial area along a busy roadway in front of a casino that has been performing worse than in any previous year. It employs about one-third as many people as in its first year and has fallen behind the competition.

Horseshoe Casino was billed as a $442 million development, equivalent to $586 million today, when it opened August 2014 on the site of a former chemical factory. But its gambling revenue peaked around 2016 and began a long, steady decline, according to state data. Since its high point, in inflation-adjusted dollars, gambling revenues are down by two-thirds. A deal last year valued the casino at less than $273 million.

Nevada-based Caesars Entertainment Inc. owns Horseshoe and has sunk hundreds of millions of dollars into a bet that the site will lure more gamblers. The Baltimore site is one of the biggest, by square footage and total games, of Caesars’ more than 50 casinos across the country, outside of Las Vegas.

Since 2021, Caesars has paid $121 million to buy out its partners and take full ownership of Horseshoe. Last year, the company paid another $267 million to retire a loan on the property. This summer, Caesars brought in new leadership to run the casino. Caesars’ most recent quarterly earnings report shows it has more than $12.4 billion in debt.

One gaming industry expert pointed to the casino’s location in a largely industrial area, along with perceptions of Baltimore crime as possible reasons for the Horseshoe’s struggles. Management also faulted years of underinvestment in the property.

Representatives of Caesars did not respond to requests for comment. Attempts to reach the current and former managers of Horseshoe Casino were unsuccessful.

On a recent Thursday night, a woman sat alone at the bar of the casino’s steakhouse, musing about politics to the staff. Scattered throughout the casino, patrons punched the buttons of slot machines. Others looked at their cards and put down chips at the tables. But the gaming floor was largely a sea of open machines and tables.

Maryland deals in

Maryland has grappled with legalized gambling for decades. Slot machines in particular have a controversial history here. In the 1940s, when it was difficult to find legal ones outside Las Vegas, slot machines were legal in parts of Maryland. They popped up seemingly everywhere along U.S. 301 in Southern Maryland, an area that became known as “Little Nevada.”

“Just about any establishment big enough to accommodate a slot machine has one, and many Southern Maryland businesses have dozens, scores and even hundreds of the hungry contraptions,” the Associated Press reported in 1962.

The machines were a boon to the budgets of local governments, but politicians and religious leaders were outraged over what they considered their predatory and addictive power.

A pastor in Charles County said he “saw poor people put groceries back on the shelf in order to play the slots a few more times before leaving the store.”

Faced with accusations of bribery and gambling by children, Maryland’s legislature voted in 1963 to ban slot machines. Other states cracked down on gambling, too, but the allure never went away.

In recent decades, especially after the 2008 recession, state and local governments looked to casinos as a way to make money and create jobs without raising taxes.

Once states like Delaware and Pennsylvania took the plunge, lawmakers in Maryland grew increasingly worried about missing out on the action. Following years of contentious legislative sessions and ballot questions, the state got its own Las Vegas-style casinos.

Starting in 2010, Maryland sprinkled casinos in six very different locations across state: off of an exit for Interstate 95 in Harford County, next to a horse racing track on the Eastern Shore, as part of a shopping mall in Anne Arundel County, inside a rustic state park in Western Maryland, near the sports stadiums in Baltimore, and just outside Washington along the Potomac River.

All six have faced challenges. At times, they’ve cannibalized each other’s business. Public data from state regulators shows their revenues dropped whenever a new competitor opened. The biggest plummet came in 2020, when the coronavirus pandemic shut down casinos for two full months. Since then, the overall gambling revenue in Maryland has recovered and surpassed pre-pandemic levels.

Last year, the sites made nearly $2 billion in combined revenue from table games, such as craps and blackjack, and electronic slot machines, according to state data, but not every casino is raking it in. Horseshoe is the only Maryland casino performing worse today than in 2019.

According to filings with federal regulators, Caesars said the Horseshoe Casino was still profitable. It turned about $1 million in profit each month in parts of 2021 and 2022 — but even that came with a price.

‘What it was supposed to be’

Jacob Witmer, Horseshoe’s new general manager, told regulators in August that the casino had been cutting its way to profitability. Caesars is reinvesting in the casino, rebuilding its local executive team, and expects to reverse its downward slide by next year, he said.

“We are in the process of restoring Horseshoe to what it was supposed to be,” Witmer said.

And for Baltimore, Horseshoe Casino was supposed to be a jackpot. A revenue generator. A top employer. A game-changing development in a new entertainment district.

Indeed, some revenues have been used as planned: going toward constructing schools, rehabilitating wetlands, propping up Maryland’s horse racing industry and more. Additionally, Horseshoe Casino pays $14 million to the city every year, plus $3.2 million in rent for its parking garage. That money partly offsets a property tax credit awarded to more than 70,000 Baltimore homeowners.

But many of the jobs touted by city officials have since gone bust. Horseshoe Casino had nearly 2,400 employees when it opened in 2014. As of September, that number had dwindled to fewer than 800, according to state data.

Some of those employees claim Caesars used a variety of schemes to whittle down their paychecks, underpaying them by at least $5 million. They filed a class action lawsuit earlier this year, alleging the casino manipulates the tipping system, rounds down their clock-in times, and improperly deducts fees from their paychecks.

Caesars denied the allegations in court filings. The lawsuit is ongoing.

The casino is falling short of other expectations, too. More than a decade after the grand opening, the surrounding area remains largely industrial — far from the sports entertainment hotspot once envisioned.

Located along a busy road that feeds into the highway, it has become a magnet for self-storage facilities. Greyhound drops off out-of-town gamblers at a bus station next door, just 400 steps away from the entrance of the casino.

There are hotels scattered across downtown Baltimore. But unlike most casinos — including its competitors in Maryland — Horseshoe does not have its own hotel. Instead, when gamblers tire, the nearest hotel is a Holiday Inn Express, which the city has also used as emergency shelter for the homeless.

One positive development nearby has been Topgolf. The sports entertainment complex, which shares a parking garage with Horseshoe, opened in 2022.

That momentum was supposed to carry forward with The Paramount, a planned $50 million, 3,750-seat concert venue between M&T Bank Stadium and Topgolf. The Paramount originally said it would open more than a year ago.

The structure was built, but then work was abruptly halted after backers say their funding fell through.

Contractors led by Clark Construction sued in August 2023, saying they were not being paid. Recent court filings show that those behind The Paramount — now called The Ostend — continued to express optimism throughout this year that they could line up new funding, but it hasn’t happened. Clark terminated their contract in July and filed a new court action seeking to recover $4.6 million.

Today, the building sits empty and unfinished, gathering graffiti tags.

In a statement, Baltimore Development Corp. President and CEO Colin Tarbert said the city’s development arm remains hopeful about the growth of the area. A $14 million streetscape improvement — funded by the city and state — is on its way, which will create a “pedestrian-friendly and aesthetically pleasing” connection from the casino to M&T Bank Stadium.

But enlivening the area could be an uphill climb, said James Karmel, a Professor of History at Harford Community College and the author of “Gambling on the American Dream.”

Karmel described the Horseshoe’s location as challenging to access for drivers and not able to capitalize on neighboring football crowds. Part of that, he said, stems from the reluctance among “suburbanites” to stay downtown long.

“There’s not a crime wave happening outside the casino, but it does play a role,” said Karmel, referencing the 2022 shooting of a man in the casino’s parking garage. “There’s been no renaissance, neighborhood-wise, like in Canton or Federal Hill in that way where it becomes a hot neighborhood.”

At a groundbreaking ceremony in 2013, then-Mayor Stephanie Rawlings-Blake described Horseshoe Casino as the spark that would create a new entertainment district, connect the area to the nearby professional sports stadiums, and unleash millions of dollars in private development.

She told the crowd to close their eyes and imagine a transformed corridor within three to five years.

The next year, the mayor doubled down on those predictions at a ribbon cutting.

“You just wait and see,” Rawlings-Blake said.

Banner reporter Justin Fenton contributed to this article.