Risky Bet On Slots

Gamble: As pro-slot-machine politicians prepare to take office, Maryland should watch pace and nature of gaming expansion.

November 24, 2002|By Greg Garland | Greg Garland,SUN STAFF

The mood was triumphant among top casino executives, slot manufacturers and horse-racing interests at a conference at Dover Downs in Delaware, two days after the Nov. 5 elections.

This had nothing to do with political ideology. The door to casino-style gambling at racetracks had just opened in Maryland and Pennsylvania with the election of pro-slots governors. Massachusetts, Kentucky and Ohio could be next.

"The question isn't if gaming will expand, but how much and how quickly," exulted Don Snyder, president of Las Vegas-based Boyd Gaming.

It probably can't happen quickly enough to satisfy slot supporters in Maryland who were practically giddy over Robert L. Ehrlich Jr.'s election as governor .

During his campaign, Ehrlich made slots the centerpiece of his plan for tackling the $1.8 billion budget deficit the state faces over the next two years.

Ehrlich is pressing for slots to be approved by the General Assembly during the upcoming session and his spokesman said slots could be in operation by early 2004.

But before racing off to open the door to slots, Ehrlich and key legislators who support legalizing the machines would do well to consider the experience of other states and prepare Marylanders for what is coming.

Ehrlich and other slots supporters have so far studiously avoided using the "C" word - as in "casinos" - but that is exactly what the state will be getting if slots are authorized at four racetracks.

For example, consider Charles Town Races and Slots in West Virginia's eastern panhandle. The once-practically derelict track now glistens with 2,500 slot machines and plans to add 1,000 next year. The huge facility has all the trappings of a Las Vegas-type casino - down to cocktail waitresses in skimpy outfits serving free drinks for patrons to help empty their pockets.

Last year, slots generated $81.3 million in gross revenue for the Charles Town track's owners, compared with $7.8 million from horse races. The figures come from tabulations made after the paying of winnings to bettors and gaming taxes to the state.

The Dover Downs harness track in Delaware, where slot operations are managed by Las Vegas-based Caesars World, offers a more upscale version. Its facilities include a recently built hotel with luxury accommodations, a concert hall, ballroom and gourmet restaurant.

Ehrlich's own plans to generate $800 million a year for Maryland's treasury assumes as many as 3,500 slot machines at each of four racetracks. That's as many as are to be found at the MGM Grand in Las Vegas. Keep in mind that slots account for 80 percent or more of a casino's revenues, according to gambling experts.

Ehrlich says he wants to restrict slots to Pimilico Race Course in Baltimore; Laurel Park in Anne Arundel County; Rosecroft in Prince George's County and at a track to be built near Cumberland in Western's Maryland's Allegany County.

But will slots remain restricted to the tracks for long? Not likely, if the experience of other states is any guide.

West Virginia started out with limited slots at tracks. Then, betting limits were raised, as were the number of devices each track was allowed to have. Since Jan. 1, video gambling devices have been allowed in bars and social service clubs. And some are now pushing to let tracks in West Virginia have table games such as craps and blackjack.

"It's a natural evolution," said Edson R. "Ted" Arneault, president of Mountaineer Race Track & Gaming Resort in Chester, at the northern tip of West Virginia.

Arneault, a speaker at the conference in Dover, said his customers want table games, along with the slots.

Delaware, too, looks to expand beyond offering slots at tracks. It is considering sports betting and possibly waterfront casinos.

C.B. Forgotston, a New Orleans lawyer and outspoken gambling opponent, said Maryland policy makers are fooling themselves if they believe they can limit gambling once they open the door. No other state has succeeded in doing so, he said.

"Once the camel's nose gets under the tent, it's in," Forgotston said.

And proliferation isn't the only thing that Marylanders need to worry about.

Gambling interests and their lobbyists generally succeed in gaining control of legislatures to get what they want. They often end up wielding enormous influence.

"They have a lot of money, and they have a lot of money at stake, so they become a major, major political player," said Earl L. Grinols, an economics professor at the University of Illinois at Urbana-Champaign who studies the gambling industry.

He added: "It's like inviting a 900-pound gorilla into your home. Pretty soon you don't have control of your home any more."

Clearly, there is a lot of money at stake if Maryland legalizes slots, given the Baltimore-Washington region's huge population.

Steve Rittvo, president of a New Orleans-based gambling consulting business, estimates slots in Maryland could generate revenues of $1.2 billion to $1.5 billion a year.

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