Pennsylvania's legislative leaders announced yesterday that they have agreed to put 37,000 slot machines at sites across the state, opening a vast new outlet for gambling in the region and, some believe, intensifying pressure on Maryland officials to follow suit.
Maryland Gov. Robert L. Ehrlich Jr. (R) said the agreement, which will be put to a formal vote in Harrisburg next week, highlights the failure of his state's legislature to forge a similar deal. As a result, he said, "Pennsylvanians will benefit as thousands of Marylanders cross state lines to spend their discretionary dollars."
Word of the deal prompted a series of closed-door meetings between top state officials in Annapolis yesterday, and Maryland Senate President Thomas V. Mike Miller Jr. (D-Calvert) said he believes it has reinvigorated his efforts to convene a special summer session to legalize slot machines.
"It's a day we all knew was going to come," Miller said. Although a slots bill "was necessary two years ago and last year, now it becomes imperative."
The presence of so many new machines within easy reach of Maryland's urban centers will create two problems for the state, Miller said. It will provide Marylanders with a new outlet for spending their money out of state. And, he said, it will pour so much cash into Pennsylvania's horse racing industry that Maryland's entire racing circuit could collapse.
But backing from Ehrlich and Miller -- both ardent supporters of legalizing slot machines to pay for improvements to education and to subsidize racing -- has not been enough to bring gambling to Maryland. House Speaker Michael E. Busch (D-Anne Arundel) has twice led efforts to block slots proposals, favoring instead a plan to place the matter before voters.
Yesterday, Busch said the action in Pennsylvania does not convince him that an urgent response is needed. To the contrary, he said, the Pennsylvania decision could illustrate the risk involved in using gaming proceeds to balance a state budget.
"Just watch now and see what happens to West Virginia and Delaware," Busch said, referring to two other neighboring states that have turned slot machine revenue into a key foundation of their budgets. "If Pennsylvania comes online, what will they do to survive? Are they going to have to allow table games or full-fledged casinos?"
Delaware, which attracts most of its gamblers from neighboring states, stands to lose $20 million to $25 million in fiscal 2006, and $30 million to $35 million the next year, Delaware's finance secretary, David Singleton, told the Associated Press yesterday. If Maryland also approved slots, Delaware could lose more than $100 million annually.
Busch said he does not want Maryland to "fall into that trap. We should never look at gambling [proceeds] as a primary source of revenue."
Although he held firm yesterday, aides to Ehrlich said they believe the House speaker will be forced by the Pennsylvania decision to soften his opposition.
Efforts to put pressure on Busch are underway. Ehrlich said Pennsylvania's action "highlights the refusal of the Maryland House of Delegates to act on my plan to dedicate $800 million in slots revenue per year toward K-12 public education." And Maryland Republican Party Chairman John Kane released a statement blaming Busch "and his buddies" for "refusing to negotiate on slots in Maryland, going against public opinion every step of the way, and rejecting bipartisan overtures."
Kane's assertion did not take into account Busch's repeated pledge to negotiate a solution that involves placing the slot machine matter before voters. That, Busch said, was the only reason a summer session was considered at all -- because a vote was needed before Sept. 8, the deadline for putting the issue on the November ballot.
"You've got a balanced budget; revenues are up. I don't see the need to rush back and do a slots bill," Busch said.
Lobbyists for various segments of the horse racing industry said the scope of the Pennsylvania agreement creates the crisis. The deal would raise $1 billion by allowing 3,000 slot machines at each of 12 sites, including eight horse racing tracks. It also would devote 18 percent of the proceeds from slots to the Pennsylvania racing industry.
Alan Rifkin, who represents the owners of the Pimlico and Laurel Park race tracks, said the agreement turns Pennsylvania into an "800-pound gorilla" and requires a response. "It's no longer a question of whether Maryland can get ahead of the curve," he said, "but whether it now even has the chance to catch up and protect its assets."
Gerard Evans, who represents the Maryland Thoroughbred Horsemen's Association, said that if the Pennsylvania decision inspires similar action in Maryland, "it's great news."
"If not, it's terrible news," he said. "It will be the death knell for racing."
Slots opponents said they believe the idea that Pennsylvania poses a threat to any portion of the Maryland economy is overblown. And even if it did, they said, Maryland residents have much deeper reservations about gambling than do their neighbors in surrounding states.
"It's a completely different environment," said Del. Peter Franchot (D-Montgomery), one of the most vocal opponents of a gambling expansion. Busch "should be under no illusion that this puts him in a difficult position. There is tremendous support for him around the state, and for the position he has taken."