The Slots Mirage
The promise of pain-free revenue rings hollow.

Saturday, November 1, 2008

IT IS INCREASINGLY apparent that Maryland slots won't fulfill the promises that the referendum's backers are peddling. Don't take our word for it: A vice president of one of the largest gaming companies in the country recently suggested as much. Supporters have long boasted that Maryland will capture an unusually high percentage of slots revenue -- 67 cents on the dollar.

But that rate may not leave enough money on the table to satisfy ravenous casino operators. Gambling giant MGM Mirage said it has no interest in bidding on any of the five proposed Maryland casino sites. One of its senior executives told the Baltimore Sun that the steep tax rate is incompatible with the high-end development that supporters envision: "Clearly, the state of Maryland has decided . . . they want boxes with slots in them. That's all you could do at that tax rate." To lure slots operators, Maryland may have to lower the tax rate, diminishing a $660 million annual revenue projection that is already questionable.

If that isn't enough to give voters pause, consider the motives of the referendum's high-profile backers. Much of the money donated to For Maryland for Our Future, the leading group promoting slots, comes from gaming interests. Magna Entertainment, the parent company of the group that runs Laurel Park, funneled $2 million to the slots effort; Penn National Gaming donated $1 million. Both companies are angling to operate slots sites. Another group is made up of a son of Baltimore Orioles owner Peter G. Angelos and two former state politicians; the three together contributed $300,000 to the effort and are likely to bid on slots licenses.

Voters should ask whether these donors, who are behind the blitz of pro-slots television and radio ads, have the best interests of the state in mind. Marylanders need look no farther than Delaware to see the pitfalls of approving slots. After the state introduced the machines, calls to the state's gambling-addiction help line tripled, from 1,400 in 1997 to more than 4,500 the next year. Though Delaware slots have generated millions of dollars, state officials have had to aggressively promote the machines.

Fourteen years after Delaware legalized slots, residents still debate their merits. Maryland voters should end the debate now by voting against slots and the false promise they symbolize.