The smart state

November 16, 2003

POLLS SHOW most Marylanders are for legalizing slot machines. And in Annapolis, there's momentum for just that. The question doesn't seem so much if, but how.

But Maryland has rejected gambling twice before. In 1963, the state shut down Southern Maryland's slots. In 1995, a state commission decided legal gambling was too risky, concluding it might bring big social costs without sizable economic benefit.

Those were smart moves, and the essential question now is whether Maryland remains savvy enough not to fall for gambling's hollow promises: hundreds of millions of dollars in new tax revenue and some new economic development. A smart state would see through both.

Maryland's estimated slots take could be in the range of $750 million a year. This would help, but not solve, the state's long-term structural budget deficit. But wait: The gains would be offset by many new costs, from regulating the casinos and from increased crime, social-service demands and lost business productivity.

Attorney General J. Joseph Curran Jr., a longtime gambling foe, last week brought a top gambling economist before the legislative task force studying the issue. He pegs such costs at more than $200 per adult per year. In Maryland, that would be $600 million - negating much of slots' revenue.

The legislators asked a few polite questions, barely stifled a collective yawn and quickly moved on. Even if $200 per adult is an overestimate, the figure ought to have been a wake-up call. In other words, a smart state would demand a fuller accounting.

Gambling interests also dangle economic development benefits. If an area is desolate - Nevada after the collapse of mining or Atlantic City by the 1970s - gambling can bring tourists, income and jobs. But Maryland - one of the nation's wealthiest, most highly educated and most high-tech states - should be smart enough to ask itself what, say, 3,000 mostly low-paying service jobs in casinos would do for a work force of 2.9 million.

Maryland's future, as touted in all state development efforts, is as a center of the new knowledge economy. Already, this state is among the nation's leaders in residents with college and advanced degrees. It boasts the highest percentage of professional and technical workers, particularly scientists, engineers and mathematicians. It's a national leader in federal research spending, biotech, information technology and defense electronics. Do slots jobs even fit?

But slots mean more economic activity, right? Perhaps, but mainly to the extent that in-state casinos recapture Marylanders' out-of-state gambling and attract out-of-state gamblers. A state Department of Business and Economic Development study this year estimated that 70 percent of all Marylanders' slots spending would be reallocated spending - money that would otherwise be spent and taxed in-state anyway. Another sucker bet.

The push for gambling is a sound-and-light show. Under fiscal stress, states have been falling for it. But Maine voters just defeated a proposed huge casino; the international credit-card giant MBNA, with regional headquarters there and in Baltimore, contributed heavily to the anti-gambling campaign. And in Washington, D.C., in the mid-1990s, the area's Board of Trade, a powerful business lobby, derided city officials when they dared even to talk about casinos.

Maryland should follow suit. It must solve its fiscal problems by firmer means, focus on building and selling its considerable knowledge assets, and distinguish itself as a state that's too smart to gamble.

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