OTB looks a cinch for Md. Final approval by Assembly expected

April 01, 1992|By C. Fraser Smith | C. Fraser Smith,Annapolis Bureau Laura Lippman and Marina Sarris of the Annapolis Bureau contributed to this article.

ANNAPOLIS -- Now coming to a "sports palace" or a "state-sponsored bookie joint" or a storefront near you: Off-Track Betting.

Call them what you will -- some even call them "satellite simulcast wagering facilities" -- the Maryland General Assembly is gambling that convenience will stimulate Maryland's horse players and restore health to a racing industry starved for bettors.

The OTB bill passed the House of Delegates yesterday and the Senate Finance Committee concurred with its amendments. The bill goes to the full Senate today for final approval, now considered a formality.

As its price for approval of the OTB system, the General Assembly wants to exact a tax of 1 percent on off-track betting in excess of $100 million a year. After $100 million, the tax would go up another 1 percentage point for each $50 million to a maximum of 4.5 percent.

The chambers' last disagreement on the issue evaporated yesterday when the Senate Finance panel concurred with a House amendment making it clear that the new tax applies only to OTB wagering -- not to the $403 million bet last year at the tracks.

Another amendment that would have given communities advance notice of plans to locate one of these parlors in their midst failed in the House yesterday on a 59-59 vote.

"This bill is vital to the survival of racing as we know it in Maryland," said Joseph De Francis, part owner of the thoroughbred tracks at Laurel and Pimlico.

Enthusiasts envision a network of elegant betting parlors, including fancy restaurants, that give racing fans a chance to put down money on races here and elsewhere.

Proponents have argued that if more money is bet at off-track locations, it can be used to increase purses and keep horsemen from moving to out-of-state tracks with fatter purses. They say racing in Maryland employs as many as 20,000 and spin off as much as $1 billion a year in related business.

Those figures -- and the threat of outside forces siphoning horses away -- have been used successfully in the past to win help from the legislature.

In 1985, the assembly reduced the tax on track revenues from just over 4 percent to 0.5 percent. Some legislators called this a giveaway.

Mr. De Francis told legislators this year that Florida's new OTB system had lured a number of horses and horsemen. Others have blamed the industry's difficulties on a poor economy and poor management. Attendance at Maryland tracks dropped by 6 percent last year.

Not everyone, as usual, found the prospect pleasing.

"It's really offensive," said Sen. Julian L. Lapides, a Baltimore Democrat and ardent foe of racing. "They've gotten enough. We can't give them anymore. It's incomprehensible. I don't know why, in a year when everything else is being taxed, that the track is sacrosanct."

And the amendments cost the bill at least one proponent in the committee, Sen. Leo E. Green, a Prince George's Democrat. Mr. Green, who voted for the bill when it originally passed the Senate, thought the tax should be applied to the combined on- and off-track wagering.

"It was the clear intent of the [Senate] committee to apply the tax to the entire handle [off-track and on-track]," he said. In its original form, the bill passed the committee on a 10-1 vote.

In the House of Delegates yesterday, some fretted that the bill did not provide local governments and communities with enough safeguards against unwanted OTB parlors.

Del. Leon Billings, a Montgomery Democrat, proposed an amendment to require the racing commission to hold an informational meeting in a community where someone wants to open an off-track betting parlor.

Mr. Billings said he wanted to make sure communities were kept informed. "I have a hunch that this is the kind of activity that will move well in darkness," he warned.

OTB details

The off-track betting bill, expected to win final passage today in the Senate, would do the following:

* Allow an unlimited number off-track betting parlors throughout the state. Sponsors of the bill estimate a half-dozen would be opened.

* Impose a tax of 0.5 percent of the first $100 million of OTB wagering and an additional 1 percent on OTB wagering of over $100 million. For each additional $50 million in total betting, another 1 percent would be added, up to a maximum of 4.5 percent.

* Allow the racing industry to increase purses for races in Maryland in an effort to attract and keep horses and horsemen from moving to states where larger purses are currently being paid.

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