Raising the stakes in Md. gaming rift

Gambling: Video machines proliferate in W.Va. bars at the state line, threatening nearby businesses and widening the slots debate.

February 19, 2002|By Greg Garland | Greg Garland,SUN STAFF

CUMBERLAND - With little fanfare, West Virginia is creating dozens of new, legal gambling venues within a few miles of small towns across Western Maryland.

A state law that took effect Jan. 1 allows as many as 9,000 video gambling devices to be installed in bars and social clubs throughout West Virginia.

The law sparks a significant change in Maryland's gambling landscape that some predict will add fuel to the political debate in Maryland over the fractious issue of legalizing slots.

Although the video gambling devices have just started trickling into bars along the Maryland border in recent weeks, their impact is being felt by some businesses near the state line.

One place hit: Geatz's, a family-owned steak and seafood restaurant and lounge in Cumberland managed by J.P. and Brenda Geatz. A two-minute drive away, just across the Potomac River in Ridgeley, W.Va., is My Place Club - where people can go to gamble on video devices that the Geatzes are forbidden to have in their business.

"A lot of our regular bar crowd like to gamble, and they tell us they are going over there [Ridgeley] to play," laments Brenda Geatz.

Like many other bar owners in Allegany County, the Geatzes say they once had unregulated, or "gray," video poker games but removed them after authorities cracked down in 1999.

Maryland House Speaker Casper R. Taylor Jr. said he sympathizes with small-business owners such as the Geatzes. The double-whammy of a crackdown on "gray" machines with similar gambling devices becoming legal just across the state line is devastating the bar and lounge business in Western Maryland, the Allegany County Democrat said.

"We have got to come to grips with the competitive dilemma we find ourselves in Maryland from the standpoint of generating revenues for the state and of evening the playing field for our private sector economy," Taylor said.

Still, he stopped short of an outright endorsement of legalized video gambling devices for bars in Maryland. Although he supports slots at Maryland's horse tracks to help them compete with tracks in West Virginia and Delaware, Taylor said legalizing them in retail establishments raises more troublesome issues. "I have not reached a conclusion about what to do with retail establishments and gambling," he said.

West Virginia legalized the gambling devices for bars and social service clubs through that state's lottery. Bars are allowed up to five devices; social service clubs can have 10. They are tied into a central computer at the lottery that keeps track of the amount of money the machines generate.

The devices - some identical to the electronic slots at four West Virginia racetracks and manufactured by major slot machine makers - offer a variety of games, including video poker and slot-style games.

Players pumping $20 bills at a time into the machines can bet up to $2 a play, building credits they can play off or cash in as winnings. The maximum payoff varies depending on the brand of the machine and its manufacturer.

Although Maryland offers Keno games through its state lottery, the video machines in West Virginia are more akin to slots and offer rapid-fire, interactive play.

The video gambling devices can be a lucrative source of revenue. As of early this month, the 1,400 video gambling devices on line with the West Virginia lottery were generating an average of $120 each a day, after payoffs to winning players, lottery officials said.

At that rate, a bar with five machines would produce annual revenues after payoffs of about $200,000. The take is generally split three ways - among the state, the establishment owner and an operator, who buys, installs and services machines at locations.

The state's share can run as high as 50 percent, depending on how much money the devices generate on average statewide during each three-month period, lottery officials said.

While they are a lucrative source of revenue, critics say, they carry a heavy price tag for some, especially low-income families. "It's not a painless tax," said Alice Click of Point Pleasant, W.Va. "It affects the poor especially, and we have more than our share of poor people in West Virginia. "

Click heads the state's chapter of Concerned Women for America, a conservative group that advocates pro-family causes. She said horror stories are cropping up of gamblers losing their paychecks.

State-mandated signs above the machines at places such as Ollie's Sports Bar & Grill, just south of the Maryland line off Interstate 81, warn of the dangers: "Caution: Gambling and playing this machine can be hazardous to your health, your finances and your future."

But on a recent Thursday night, the warning seemed to draw little notice from players at Ollie's, their faces locked on to the colorful glow of the video screens as they fed $20 bills into a bank of four machines. "You've got to figure you can't win, but it is great entertainment," said one of Ollie's regular players, Richard Huene, who lives near the bar.

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