Slots start looking less like a sure bet to win Assembly OK

Backers, opponents agree that recent `feeding frenzy' has harmed gaming effort

January 12, 2003|By Jon Morgan and Greg Garland | Jon Morgan and Greg Garland,SUN STAFF

When Robert L. Ehrlich Jr. scored a resounding victory in November's gubernatorial contest, it seemed to supporters of slot machine gaming that their payday had finally arrived in Maryland.

The backing of the Republican, who campaigned for slots as a tax-free remedy to the state's budget crisis, added conservative support to a policy already endorsed by many Democrats seeking to use the machines to fund cherished programs.

But a series of revelations in recent weeks has both supporters and opponents saying that the apparent greediness of gambling interests has stripped away the veneer of inevitability from slots.

"All of a sudden what looked like an easy coast to success now looks more like an uphill struggle," said Matthew Crenson, a political scientist at the Johns Hopkins University.

Supporters are undaunted, saying that expanded gambling is the only way for the state to raise the money it needs to balance its books without a politically unpalatable tax increase. And it is, after all, a top priority of a new chief executive.

"In my experience, the governor-elect gets his top priority in his first year. That's my sense of the history," said Michael J. Collins, who retired last year after serving 24 years in the General Assembly, most recently as a senator from Baltimore County.

Collins, who served as a co-chairman of a committee that explored expanded gaming and now believes slots are a bad idea for Maryland, predicts supporters will prevail. But he said they have not done themselves many favors in recent months.

"There is an old saying in politics: Pigs get fat, and hogs get slaughtered," Collins said.

Consider:

Shortly after the election, it was revealed that in October the chairman of the state's Democratic Party had quietly joined a group of investors seeking to buy Rosecroft Raceway in Prince George's County in hopes of getting slot machines there - despite the anti-slots position of his party's gubernatorial candidate, Kathleen Kennedy Townsend. The chairman, Wayne Rogers, has since left the post.

In a December disclosure to federal securities regulators, the new owners of Laurel Park and Pimlico Race Course acknowledged a side deal that could result in millions of dollars in slot revenues flowing to former owners of the tracks and others.

Under the deal, the tracks' current majority owner, Magna Entertainment Corp., will initially receive 35 percent of the net proceeds of any money designated to the tracks by lawmakers. That amount increases after five and 10 years, and, after the 20th reaches 100 percent.

The rest of the money will be split among about 20 current and former investors in the tracks, including track president Joseph De Francis, a New York conglomerate called Leucadia National Corp., and Joseph J. Grano Jr., the chairman of Wall Street's UBS PaineWebber Inc. Grano is also chairman of President Bush's Homeland Security Advisory Council.

In records released last week in response to a state Public Information Act request by The Sun, it was revealed that the estate of the late Redskins owner Jack Kent Cooke, who had made a loan to the track's former owners, also would benefit. His estate is due $6 million if slots are legalized by 2006.

A lot of slots

Last week, at the urging of Ehrlich, the often-bickering racing industry coalesced around a proposal for the distribution of slot machines and their revenues. Their idea: put more slots at each track than are in all but the biggest casino in Las Vegas.

Ehrlich distanced himself from the plan, which calls for nearly twice as many machines as he campaigned for, including a batch someday at Ocean Downs - a harness racing track near Ocean City, where city leaders have vowed to fight them.

But the news reinforced the perception of slots legislation as a muscular genie straining to escape its bottle.

African-American leaders in the state had gotten into the act previously, vowing to block slots legislation unless minority-owned businesses get a piece of the action.

And a group of politically connected developers that includes Baltimore's John Paterakis confirmed it wants to build a retirement community, hotels, offices and other businesses at the site of a closed naval training center in Cecil County - and would welcome the chance to put a casino there.

Foes enjoy the show

Kimberly S. Roman, co-chairwoman of NOcasiNO Maryland, which is fighting to keep slots out of the state, said the infighting and revelations about different prominent people and interest groups grasping for money from slots helps her effort.

"I feel they are cutting their own throats," Roman said. "They're the ones who are going to bleed to death, not me."

Of efforts to legalize slots, she said: "We've known it's been nothing but greed, but now the public is seeing that it's nothing but greed. It works for us."

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