O'Malley Slots Plan Arouses Suspicions

Lawmakers Scrutinize Control of Site Selection

Gov. Martin O'Malley called a special session. (Chris Gardner - AP)

As Maryland lawmakers turn their attention to slot machine gambling, some are asking whether a bill put forward by Gov. Martin O'Malley (D) goes too far in steering licenses to preordained locations.

The bill, the focus of a hearing today, calls for a state commission to award licenses to operate up to 15,000 machines based on a competitive bidding process. But three of the five locations in the bill appear narrowly crafted to favor a potential operator, lawmakers say.

The bill -- which would take effect only if voters approve it in a referendum on slots next year -- would allow a slots parlor within one mile of a particular intersection in Worcester County. Ocean Downs Racetrack is in that area. Somewhat less-restrictive language would allow a parlor at Laurel Park racetrack in Anne Arundel County.

Past or present owners of both tracks have contributed thousands of dollars to O'Malley and other Maryland politicians and stand to benefit financially if slots are legalized at those locations. O'Malley aides strongly deny that those donations affected the bill.

A third site described in the bill would allow a slots parlor at a planned sports and entertainment complex in south Baltimore that is being developed on city-owned land by a company in which Baltimore Ravens linebacker Ray Lewis is a partner. A spokesman for Mayor Sheila Dixon (D) said yesterday that the site is her "preferred" location in the city.

House Speaker Michael E. Busch (D-Anne Arundel) said that he is continuing to study O'Malley's bill but that he has concerns about "unjust enrichment or entitlement. . . . The whole idea is there should be a competitive bid."

Busch, the legislature's most powerful slots opponent, is supporting O'Malley's proposal to put the question of legalizing slots to voters in a referendum. But he and other lawmakers suggested that there will be significant debate over the details of the bill that O'Malley hopes will pass in the current special session devoted to addressing a budget shortfall of at least $1.5 billion.

O'Malley's slots bill, aides say, could eventually generate more than $700 million a year for the state and about $400 million for operators. An additional $100 million a year would be set aside to subsidize Maryland's horse-racing industry.

Although some track owners have expressed interest in slots, others in the racing industry have said it makes little difference where parlors are located as long as enough of the proceeds are earmarked to enhance racing purses.

"The governor ran on slots at the racetrack, so it's not surprising that two of the sites he's proposing are at or around racetracks," said Joseph C. Bryce, O'Malley's chief legislative officer.

A gambling industry analyst who examined O'Malley's bill said it appears to foster little competition for a majority of the licenses. "With three of the five locations, it's definitely been greased," said Jeffrey C. Hooke, managing director of a McLean-based corporate finance consulting firm. "I guess that's just a fact of Maryland politics."

Analysts say two other sites in the bill are likely to draw more competition for licenses: one on state land near Rocky Gap Lodge in Allegany County and one along Interstate 95 in Cecil County.