Racing industry leaders propose 18,000 slot machines at 5 tracks

Ehrlich distances himself from plan, which both foes and allies say overreaches

January 11, 2003|By Michael Dresser and Greg Garland | Michael Dresser and Greg Garland,SUN STAFF

An ambitious proposal by Maryland racing interests to install 18,000 slot machines - or one for every 300 Marylanders - at five state tracks stumbled out of the gate yesterday as supporters and foes of expanded gambling accused the industry of overreaching.

The plan, which industry leaders drafted at the urging of Robert L. Ehrlich Jr., was welcomed by the governor-elect - but only as a starting point for discussion. He emphasized that the proposal represented the industry's position - not that of his incoming administration.

"Our instruction to them was to get on the same page," Ehrlich said last night. "We draft our bill."

Ehrlich was quick to reject the most inflammatory provision of the industry plan: a proposal to put 2,250 slot machines at Ocean Downs outside Ocean City.

"That's just a nonstarter," he said.

Ehrlich has said he would support slots at the Pimlico, Laurel and Rosecroft tracks and one being built in Allegany County. But he has firmly ruled out an expansion of gambling on the conservative Eastern Shore, where many fear the slots would tarnish the "family" image of Ocean City.

The governor-elect, who will take office Wednesday, had encouraged the various factions of the racing industry - including standardbred and thoroughbred track owners and breeders for both - to come together on a plan they all could support.

"The fact that they could agree on something was historic," Ehrlich said.

The plan they came up with - a copy of which was obtained by The Sun - goes far beyond the plan Ehrlich campaigned on last year.

The industry is calling for 4,500 slots apiece at Rosecroft, Laurel and Pimlico - more than most of the major casinos in Las Vegas and Atlantic City, N.J., hold.

Thomas Bowman, president of the Maryland Horse Breeders Association, who was chosen by Ehrlich to be chairman of the industry effort, said two tracks owned by William Rickman Jr. - Ocean Downs and the track being constructed near Cumberland - would be allowed 2,250 machines each.

Ehrlich's proposal called for about 10,000 slots statewide. Last night, the governor-elect said the scale of the facilities proposed by the industry could be a problem.

"It's something we're cognizant of," he said.

Ehrlich said the industry's proposals for splitting the proceeds "also need to be tweaked."

The industry plan says that its proposed licensing fees could generate $300 million in the fiscal year beginning in July - giving the state a good start toward closing a $1.2 billion revenue shortfall.

The proposal calls for the state to receive 37 percent of the profits early on. Its share would eventually rise to 55 percent as the track industry pays off the costs of its initial investment.

Bowman said that would give Maryland the highest take of any state with slot machines.

The industry would start out collecting 49 percent, but that amount would decrease to 41 percent as revenues increase. In addition, 11.2 percent would go to thoroughbred and standardbred purses in the early going, but that percentage would also decrease over time. A smaller percentage would go into a breeders' fund.

The industry's proposal asked Ehrlich to seek protection against the legislature's reducing its share of gambling revenues, cutting the number of authorized slot machines or permitting slot machines to be installed anywhere but at the five tracks.

Bowman, a Cecil County breeder and veterinarian, conceded that the proposed slots at Ocean Downs are "not going to happen."

"Ehrlich is against slots at Ocean Downs and Timonium," Bowman said. The report does not call for slots at Timonium.

Rickman said the proposal submitted to Ehrlich isn't etched in stone.

"This is a work in progress," Rickman said. "It's just a starting point to open discussion with the administration and the legislative leadership."

Nothing in the proposal calls for an immediate expansion of slots to Ocean Downs, he said.

"It just can't be excluded forever. That's all we're asking," Rickman said, suggesting that public opinion toward slots in Ocean City could change.

The proposal says that if Ocean Downs were not to seek to install slots, the other four track owners would pay a small portion of their gambling revenues to that Eastern Shore track.

Opposition on the Eastern Shore is adamant.

Senate Minority Leader J. Lowell Stoltzfus, who represents the resort town, said that would only happen "over my dead body." Stoltzfus said he spoke with Rickman, Ocean Downs' owner, just Monday. "I told him slots are not right for us, and I will vigorously oppose it," the Republican lawmaker said.

Ocean City and Worcester County officials say gambling threatens a nearly $1 billion tourist industry that is fueled by more than 8 million visitors who stay at the Atlantic resort every year, generating as much as $100 million annually in state and local taxes.

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