Budget Shortfall Renews Push for Slots
Opponents Hope Wrangling Over Details Fells Plans, as It Has in Past

By John Wagner
Washington Post Staff Writer
Sunday, May 27, 2007

With Maryland facing a fiscal crisis and yet another governor warning that the Preakness Stakes could soon leave, many in Annapolis believe lawmakers will finally legalize slot-machine gambling, pumping hundreds of millions of dollars into the state budget and propping up the faltering horse-racing industry.

Yet the betting is far different among a band of slots opponents who gathered last week to start gearing up for what is certain to be another bruising fight. The opponents' hope is that the prickly details that helped sink every slots bill pushed by former governor Robert L. Ehrlich Jr. (R) will once again prevent consensus.

Gov. Martin O'Malley (D) has voiced support for placing a "limited" number of slot machines at tracks to save racing jobs but done little to answer some of the questions that bogged down past debates: How many machines should the state authorize? Who should own them? Where should they go? How much money should the state retain? And how much say should communities have before the slot machines arrive?

"The devil is in the details in a major way on this," said Aaron Meisner, a Baltimore financial adviser who heads StopSlotsMaryland, the group that launched its efforts anew last week. "I think there are enough questions out there that don't have good answers that it will fall apart again."

Senate President Thomas V. Mike Miller Jr. (D-Calvert), a leading proponent of expanded gambling, predicts that the legalization of slots is "going to happen," either in a special session this fall or when lawmakers reconvene in January. Miller pushed slots legislation through his chamber in each of Ehrlich's first three years in office.

The latest version of the bill sponsored by Miller would have put 15,500 machines at four racetracks and three other locations, generating more than $800 million a year for the state, according to legislative analysts. More than $90 million a year would have been earmarked to enhance horse-racing purses -- about what the industry says it needs to compete with surrounding states -- and $500 million would be retained by slots operators.

A slots bill -- on a smaller scale -- has passed the House of Delegates only once since Michael E. Busch (D-Anne Arundel) became House speaker in 2003. Busch said in an interview this month that he is open to discussing expanded gambling but uncertain that any legislation would pass in the House again.

"I think in many respects the dynamic is going to be much tougher than it was in the previous four years," Busch said.

The bill approved in 2005 received the bare minimum of votes required in the House and was declared dead on arrival in the Senate.

It included only four locations -- none in Baltimore or Prince George's, home to two of the state's best-known racetracks: Pimlico Race Course, the home of the Preakness, and Rosecroft Raceway in Oxon Hill. Baltimore and Prince George's locations were excluded after overwhelming votes by their House delegations against allowing slots in their communities.

Busch said he does not think the sentiments of those two delegations have changed in the past two years and finds it difficult to envision a bill passing the House that includes locations there.

Republican support for slots, meanwhile, is likely to erode without Ehrlich in office, Busch and others suggested. The House bill that passed two years ago was supported by 35 of the chamber's 43 Republicans and 36 of its 98 Democrats.

Republicans lost six seats in last year's elections, and some GOP delegates supported the 2005 slots bill out of loyalty to Ehrlich, despite having qualms about gambling.

House Minority Leader Anthony J. O'Donnell (Calvert) said the Republican caucus has not yet taken a position on the slots issue going forward. But his view, he said, is that the state should capture money Marylanders are spending to gamble in neighboring states.

"We have hundreds of millions leaving the state right now," O'Donnell said. "We should endeavor to keep that money in the state to solve our fiscal problems. That's certainly a better idea than the massive tax increases being contemplated by those on the left."

Slots proponents are banking on the size of the state's looming budget shortfall -- nearly $1.5 billion -- to persuade wavering Democrats to embrace the idea as part of a fiscal fix.

"You've never had the overlay of the state being in a full-scale fiscal meltdown," said Gerard Evans, a lobbyist for the Maryland Thoroughbred Horsemen's Association. "After debating this issue for six years, I would hope we could reach a consensus fairly quickly."

Evans said the industry is not as concerned with the location of the machines as it is with ensuring an adequate cut of the revenue to enhance purses.

"The bottom line is the racing industry needs $100 million a year to stay competitive with Pennsylvania, West Virginia, Delaware, New York and New Jersey," he said. "All of those states either directly or indirectly are supplemented by slots."

Sen. Ulysses Currie (D-Prince George's), chairman of the Senate Budget and Taxation Committee, which has jurisdiction over slots bills, said he thinks the size of the state's budget shortfall "will bring members on board who heretofore would not support slots." Even so, Currie said, "I think it still is going to be an uphill climb," given the dynamic in the House.

Hoping to make that climb as steep as possible, leaders of StopSlots talked at last week's organizational meeting about raising money and replicating other efforts from past years. Those included spreading the word through churches, particularly in black congregations in jurisdictions where slots venues might be placed, about social ills associated with slots. The group's leaders also said they would court Republican allies more aggressively than before.

One wild card in coming months is O'Malley.

Spokesman Steve Kearney said it is unclear whether the governor will introduce a slots bill of his own or work to build consensus among House and Senate leaders.

But, Kearney said, the governor is willing to compromise, as all players involved should be. That could mean accepting a plan that brings in more revenue to the state than O'Malley has suggested or accepting locations other than tracks, Kearney said.

"I think this is a good test for the governor," said Sen. James Brochin (D-Baltimore County), who predicted that a slots bill will pass in the coming year. "Being governor is about leadership. It wasn't enough that Ehrlich had the idea. This is O'Malley's test to get it done."