The Political Economy of Casino Licensing: A Case Study on Maryland's Experience

This paper will argue that casino licensing—the primary method of regulation that states employ to legalize casinos—creates an environment conducive to cronyism and regulatory capture. Well-connected firms lobby for the monopoly right to conduct their business in a state, inevitably linking casino corporations with the political process. While evidence of this phenomenon is observed nationwide, this paper will explore Maryland’s experience with casino legalization. More specifically, it will examine how the licensing process and subsequent political favoritism produced the upcoming $925 million MGM Resorts Casino in National Harbor, Maryland.