Racing interests tell state studies of slots are flawed

Meanwhile, W.Md. track developer offers warning

November 06, 2003|By Greg Garland | Greg Garland,SUN STAFF

CUMBERLAND - Striving to have sole control over slot machine gambling, Maryland racing interests sought yesterday to discredit two studies issued this year that appear to show taxpayers could get a better deal if the state put the machines at sites other than tracks.

Representatives of Magna Entertainment Corp., which owns Pimlico Race Course in Baltimore and Laurel Park in Anne Arundel County, also tried to shoot down the idea of state-owned slots emporiums, saying they wouldn't necessarily yield more money for the state's treasury.

Meanwhile, Delaware racetrack casino operator Bill Rickman Jr. told lawmakers who were touring Western Maryland yesterday that he would have to abandon his plans to build a racetrack in Little Orleans in Allegany County if slots were allowed nearby but not at the proposed track.

Rickman's warning mirrors a similar one Magna has made that it might not be able to fully complete its plans to improve Pimlico, and that the track's future could be in jeopardy if that track doesn't get the machines but they are permitted elsewhere.

These developments come as the racing industry, which has lobbied for slots for years, finds itself fighting to maintain a prominent seat at the table as lawmakers actively consider alternative sites for slots.

Magna's efforts to discredit the independent studies done by Jeffrey C. Hooke, an investment banker affiliated with a conservative tax policy group, and Robert E. Carpenter, an economics professor at the University of Maryland, Baltimore County, came during a public hearing on slots last night at Allegany College of Maryland.

Western Maryland was the last stop on a statewide tour by the House Ways and Means Committee, which has been conducting a study of the idea of legalizing slot machines.

Paul Girvan, managing partner of a New Orleans-based consulting firm hired to do a market study for Magna, told lawmakers the separate studies done by Hooke and Carpenter were flawed.

He said they were based on faulty assumptions about the size of the market for slots in the Baltimore-Washington region and the operating costs for a large racetrack casino operation.

Girvan focused mostly on Hooke's study, saying his entire analysis was "skewed" because it was based on "false and deceptive assumptions."

Hooke's analysis found that the state could generate $1.5 billion by auctioning slots licenses to the highest bidder.

Girvan said his company, the Innovation Group, estimates that 13,500 slot machines in Maryland would each generate about $350 a day, much less than Hooke concluded.

Told of the comments, Hooke responded: "Our study is unbiased and based on fact. People can challenge the assumptions, but we believe our assumptions are in line with what is reality."

Magna also took aim at an idea promoted by House Speaker Michael E. Busch that the state should build and control slots emporiums if a decision is made to go forward with slot machine gambling.

Paul Micucci, executive vice president of gaming for Magna, which is based in Ontario, Canada, told lawmakers that he set up a state-run slots program for racetracks in the Canadian province and knows the shortcomings of that system.

"It's a big bureaucracy, it really is," Micucci said of the Ontario Lottery and Gaming Corp., which runs 27 casinos - 18 of them at racetracks.

"Business risks should be taken by entrepreneurs, not government," Micucci told lawmakers.

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