Md. horse racing industry stunned at prospect of D.C. casino gambling

August 21, 1993|By Eric Siegel | Eric Siegel,Staff Writer Staff writer William Thompson contributed to this article.

Maryland horse racing and breeding officials are issuing dire warnings about the "absolutely catastrophic" impact on their industry of proposed casino gambling in the District of Columbia.

But the State Lottery Agency, while conceding that a gaming parlor in the nation's capital could initially hurt lottery sales in the state, predicted no significant long-term impact.

A spokeswoman for Washington Mayor Sharon Pratt Kelly confirmed yesterday that casino gambling was among the options being considered by city officials as a way to finance a new downtown convention center. The Washington Post first reported the proposals.

Gov. William Donald Schaefer said yesterday that he understood why the financially strapped district government would consider casino gambling, but said its efforts would not change his opposition to allowing such gambling in Maryland.

"I am opposed to casino gambling in the state of Maryland. Any attempt to bring it in would be met with a veto," Mr. Schaefer said.

Last year, the Maryland legislature killed a "riverboat bill" that would have allowed ships outfitted as casinos to pick up passengers who could have gambled as the boats cruised the Chesapeake Bay and its tributaries. But the legislature passed a separate bill reversing a long-standing law that forced cruise ships originating from other cities to shut down their casinos while sailing the Chesapeake.

Several states now permit some form of casino gambling, arguing that casinos generate jobs and attract tourists, and there are casinos on more than half the country's 280 Indian reservations. Critics argue that casinos are an unreliable source of revenue and that the chief beneficiaries are the gaming companies that run them, not the jurisdictions where they are located.

Yesterday, Joseph De Francis, owner of Pimlico and Laurel racetracks, said that the news that Washington was considering licensing a casino "hit like a ton of bricks."

"The economic foundation of the horse racing industry is wagering. A casino would siphon off too much of that money. The impact on our industry would be catastrophic, absolutely TC catastrophic," Mr. De Francis said.

State officials should do "everything humanly possible" to stop casino gambling in Washington, Mr. De Francis said, including lobbying the Maryland congressional delegation to oppose the initiative. Any move to allow casinos in the district would require the approval of Congress.

If Washington does get a casino, Mr. De Francis said, Maryland should allow forms of casino gambling at racetracks.

Richard W. Wilcke, executive director of the Maryland Horse Breeders Association, said he was "certain" the opening of a casino inWashington would hurt Maryland horse racing. "The Washington market is an important market for us," Mr. Wilcke said.

The Maryland horse racing industry generates about $500 million a year for the state's economy, according to state officials. Horse breeding generates another $500 million, industry sources say.

Neither Mr. De Francis nor Mr. Wilcke would estimate just how much business the state's tracks might lose if casino gambling became a reality in Washington.

But Ray Paulick, editor-in-chief of The Blood-Horse, a Lexington, Ky.-based magazine that covers thoroughbred racing, says that tracks located near casinos that have opened on riverboats or Indian reservations have seen their attendance and the amount of money wagered decline by as much as 30 percent.

Track forced to close

In a "worst-case scenario" in Minnesota, Canterbury Downs, a once-successful racetrack, was forced to close last year after a casino opened on an Indian reservation five miles down the road, he said.

"Instant action is what people want. What casinos offer are slot machines and video poker machines where the action comes every five seconds," Mr. Paulick said.

Marty Goldman, deputy director of the Maryland State Lottery Agency, conceded casino gambling could "potentially" hurt sales in the Washington metropolitan area, which account for about a third of the annual $750 million in sales. But he said he was "not overly concerned" about the effect of a Washington casino, adding, "I'd be much more concerned if it was in Baltimore."

Nationally, the opening of casinos has initially resulted in reduced lottery sales, said William S. Bergman, executive director of the North American Association of State and Provincial Lotteries. But lottery sales have rebounded, he said.

Other options

In Iowa, for example, fiscal 1990 lottery revenues were $168.3 million, Mr. Bergman said. The figures dropped to $158 million in 1991, when the state became the first of several to launch riverboat gambling on the Mississippi. But lottery revenues grew to $165.1 million in 1992 and $204.7 million in 1993, he said.

District of Columbia officials say they are considering several options as they look for a way to finance a proposed $500-million convention center. The Post reported that under one proposal, the district would sell the current convention center to a company that would turn it into a casino. In exchange for the right to operate a casino, the company would provide financing for the new convention center.

Unnia Pettus, a spokeswoman for Mayor Kelly, said other options under consideration include a regional tax, a bond issue and corporate sponsorship. "No one option is better than the others at this stage."

William N. Thompson, a professor at the University of Nevada at Las Vegas who specializes in government policy on gambling, predicted yesterday that Congress would never approve casino gambling in Washington.

"I think Congress would not be disposed to do that at all. I don't think we want people to go to Washington for that reason," he said.

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