Slots bill spotlights De Francis Racetrack owner says machines are needed to save industry

'Gives politics a bad name'

Some legislators see only special interest at stake in measure

March 17, 1996|By Frank Langfitt | Frank Langfitt,SUN STAFF

Of all the special interests seeking legislation in Annapolis this year, no one stands to gain more immediately from a single bill than Joseph A. De Francis.

Mr. De Francis, the owner of Pimlico and Laurel racecourses, is asking lawmakers to let him operate 4,000 slot machines that he estimates would bring in after-tax revenue of at least $143 million a year.

He says Maryland's horse industry needs slot machines to compete with about 1,200 slots that opened in December at tracks in neighboring Delaware. He also claims that the cost of operating the machines and refurbishing his tracks would leave him and his partners with perhaps just $5 million in net annual profit.

However, figures from Prairie Meadows Race Track and Casino in Iowa, which has 1,100 slot machines, suggest that Mr. De Francis' estimate could be very low. In the first 11 months since it opened, Prairie Meadows has posted a net profit of nearly $60 million.

Even in Annapolis where businesses file bills each year to try to make more money or protect what they already have the amount of cash the slot measure could generate for Mr. De Francis has created a stir.

And the proposal has raised questions about how far Maryland's legislature should go to help one industry and one man.

A bill pending in the House Ways and Means Committee calls for a total of up to 12,000 slot machines that would be spread among the Pimlico and Laurel thoroughbred tracks, the Rosecroft harness track and three unidentified off-track sites.

That is enough machines to serve nearly five of Atlantic City's dozen casinos. Some legislators say the bill is essentially a license to print money.

"It's elitist," says Del. Janet Greenip, an Anne Arundel County Republican and a member of Ways and Means. "Why are we going so far for this particular person or group of people?"

Fellow committee member C. Anthony Muse said such apparent favoritism in tight fiscal times breeds distrust among ordinary citizens. "It gives politics a bad name," said Delegate Muse, a Prince George's Democrat.

The proposal is expected to come up this week for a vote in the committee, where members say it is too close to call. If it is approved by the General Assembly, Gov. Parris N. Glendening has vowed to veto the measure, saying the state needs more time to assess the impact of Delaware's slots on Maryland's horse industry.

It is not unusual for governments to create wealth, whether by awarding a contract to build an airport, creating tax credits for businesses or legalizing certain forms of gambling.

This session, Art Modell wants the state to fund a $200 million stadium in Baltimore for his football team, and he is likely to get it.

Asbestos victims' attorney Peter Angelos, owner of the Orioles, asked the General Assembly to make it possible for his clients to receive millions of dollars in punitive damages. He said he'd give his share of any awards to charity, but a Senate committee killed the measure. In both cases, proponents said that while the bills ++ might generate a lot of money for a few, they were justified by the overall benefit to society. Mr. De Francis follows the same logic.

He says that Delaware slot machines will bleed Maryland's horse industry to death, putting thousands of people out of work. On the other hand, he says, slots in Maryland would increase racing purses, create jobs, produce more than $120 million in tax revenue and pay for a $200 million face lift for Laurel and Pimlico.

As for the notion that the bill would make a rich man even richer, Mr. De Francis notes that he would have to pay a substantial percentage of the slot earnings in state and local taxes as well as a portion to increase purses.

"Thirty-five percent of the gross is going out the door before I've paid one dime of operating expenses or one dime of debt service," Mr. De Francis said. "I would swap this deal for Art Modell's deal any day of the week."

Various interests are lining up for a piece of the slots pie. During the session, groups have haggled over who should get how many slot machines and what percentage of the revenue. In the original draft of the bill, Mr. De Francis' two thoroughbred tracks were to receive their 4,000 slots, but the Rosecroft harness track in Prince George's County would have gotten just 1,000.

"I could never support something that was this lopsided," said Bernard J. Murphy, an official with Bally Entertainment, a casino company that is managing Rosecroft.

The horse industry has now proposed giving Rosecroft an additional 1,000 slots. After a negotiating session last week, Mr. Murphy defended Mr. De Francis' right to profit from the bill.

"My answer is: So what?" he said. "Last time I looked we're still living in America."

The bill's money-making power has also attracted attention from businesses and prominent politicians, potentially drawing together an intriguing coalition of supporters.

Those interested in the bill include:

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