O'Malley Aide Offers Case for Md. Slots

By John Wagner
Washington Post Staff Writer
Wednesday, August 15, 2007

Marylanders who play slots in West Virginia and Delaware are contributing about $150 million a year to those states' tax coffers at a time when Maryland's horse racing industry is at "a distinct competitive disadvantage" compared with its neighbors, according to a new report by one of the governor's top officials.

The report, which plays down concerns about crime and other social ills associated with slot machines at racetracks, comes as Gov. Martin O'Malley (D) and Maryland lawmakers consider tax increases and other ways to close a projected budget shortfall next year of nearly $1.5 billion. It appeared to solidify O'Malley's position that slots, which have bitterly divided lawmakers in the past, should be part of a revenue package in the coming year.

"Tens of thousands of Marylanders are voting with their feet, and traveling to West Virginia and Delaware to play slots," wrote Thomas E. Perez, secretary of labor, licensing and regulation, in the report to O'Malley released yesterday. "By not having slots, Maryland has already left hundreds of millions of dollars in potential general fund revenue on the table, and the tables are located in West Virginia and Delaware."

Although similar findings have been cited by slots supporters, the new administration's imprimatur on such arguments was seen as a significant development by lawmakers and legislative aides who were briefed on the report's findings.

O'Malley told reporters last night that the report "underscores what many of us have known for some time: Our neighboring states are clobbering our racing industry. . . . Hopefully, in the upcoming months, we will be able to address that and find a reasonable compromise."

Perez wrote the report after being dispatched by O'Malley to visit slots venues in neighboring states. Perez said decisions by West Virginia and Delaware a decade ago to subsidize racing purses with slots proceeds has "resuscitated and revitalized the previously moribund horse racing and breeding industries in those states."

Perez said it is too early to gauge the long-term effect of slots in another neighboring state, Pennsylvania. But in the seven months since their arrival, proceeds have been "staggering," he said, with Pennsylvania taking in $250 million this year as the state's share.

Demand for slots among Marylanders is quite strong, Perez wrote. Marylanders, for example, spend more at West Virginia's Charles Town Races and Slots than do residents of other states, accounting for 30 to 35 percent of its revenue, according to officials at the facility. Those officials, Perez said, identified their most lucrative market as Montgomery County, a jurisdiction where most lawmakers have opposed past attempts to legalize slots.

In his report, Perez acknowledged that gambling can become a serious addiction, but after a preliminary investigation, he found that "it appears that the legalization of slot machines in jurisdictions close to Maryland have not led to a spike" in crime.

Slots opponents said the report did nothing to resolve some of the thorniest issues that bogged down debate over slots during the administration of Gov. Robert L. Ehrlich Jr. (R).

"What's not included in that report is the answers to the hard questions, like where are you going to put these things?" said Aaron Meisner, chairman of StopSlotsMaryland.

In the past, a majority of lawmakers in Prince George's County, for example, have strongly opposed slot machine gambling. That stance is not likely to change, many of them said last week, despite news that a Pennsylvania-based casino operator has agreed to purchase Rosecroft Raceway, a harness racing track in the county.

O'Malley and other officials are also likely to hear a good deal this week about opposition to bringing slots to Ocean Downs, a racetrack near Ocean City. A coalition of businesses in the area has banded together to place "No Slots in Maryland" signs on hotels in Ocean City, the site of a conference hosted by the Maryland Association of Counties. O'Malley is spending much of the week there.

"We just feel like it's the high road not to have them," said Lenny Berger, owner of the Clarion Resort Fontainebleau Hotel and leader of the Ocean City Economic Development Committee.

Berger said he would rather see lawmakers raise taxes than risk the social ills associated with slots. O'Malley will hear that message from those attending a fundraiser for him tonight in Ocean City, Berger said.

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