Liquor group presents its slots plan

Proposal to place 5,000 in bars, stores is `dead,' aide to governor says

December 06, 2003|By Johnathon E. Briggs | Johnathon E. Briggs,SUN STAFF

A trade association is proposing legislation to permit 5,000 slot machines at bars, restaurants and liquor stores across the state - an idea that would go well beyond previous plans to expand gambling in the state and which was declared "dead on arrival" by the Ehrlich administration.

The proposal, mailed Thursday to legislators by the 1,300-member Maryland State Licensed Beverage Association, which previously opposed slots, calls for 10,000 electronic gambling machines. The devices would be evenly divided between larger emporiums - one of them a racetrack - and about 1,000 bars, taverns, restaurants and package goods stores across the state. Only businesses that are licensed to sell alcohol and have Keno would be allowed to apply for the slots - up to five machines at a location.

Backers of the plan said it would aid the small-business community and generate $128 million more a year for state and local coffers and nearly $25 million more for horse racing purses than a slots bill proposed by Gov. Robert L. Ehrlich Jr. this year.

"For anyone to say it's a non-starter seems a little unfair when the revenue to the state is greater," said Jack Milani, vice president and legislative chairman of the association. "They [state officials] had no problem using us for Lottery and Keno, but we're out of the loop [on slots.] All they're talking about are the big boys. We want to get in on it."

Joseph A. Schwartz III, lobbyist for the beverage association, said the group was staunchly opposed to Ehrlich's slots-at-racetracks-only proposal during the last legislative session because they feared it would eat into the business of its members.

"We'll stay opposed" if liquor stores are not included, Schwartz said. "The whole point is to find a middle way that can take at least one significant opposition group and put it in favor" of slots.

Under the proposal, mailed to all members of the General Assembly, the 5,000 slots for larger emporiums would be doled out through open bidding. No operator could have more than 1,500 slots at a location.

Milani said the plan would be subject to a statewide referendum next year, but added that local jurisdictions opposed to slots could vote to "opt out" of the plan if it were to pass statewide.

"This is not a new idea," Milani said, referring to West Virginia, which he said has allowed slots at bars and restaurants.

But Paul E. Schurick, the governor's communications director and chief negotiator on slots, said the beverage association plan is "truly one of the worst ideas ever to surface in Annapolis."

"It is dead on arrival. It will be killed," Schurick said. "We do not want slot machines on every corner, in every restaurant and tavern, which is precisely what this bill is about."

He said the governor believes that the appropriate locations for slots are at existing racetracks because they have the "history, culture and infrastructure to handle expanded gambling."

According to a 1999 report by the National Gambling Impact Study Commission, the beverage association plan would be a form of "convenience gambling." After hearing testimony on the availability of electronic devices in neighborhood outlets, the commission concluded that it provides "fewer economic benefits and creates greater social costs." The commission recommended that states not authorize such operations.

"The governor will be going to the leaders of the legislature to block this bill, assuming [the association] can find a sponsor," Schurick said, adding that the proposal complicates the debate over legalized slots at a time when "there are a lot of unanswered questions on the table."

Many of those questions came up yesterday in Annapolis during a half-day symposium sponsored by the League of Women Voters and moderated by Marc Steiner, general manager of WYPR radio. About 90 people attended the forum which examined the revenue and social costs of slots.

Estimates of how much the state treasury could make on slots each year ranged up to $1.6 billion. But Robert Carpenter, an associate professor of economics at the University of Maryland, Baltimore County, argued that the net fiscal impact from slots "won't be as large as we might think" because the state may lose sales tax or lottery revenues as consumers shift their spending.

Should Maryland decide to legalize slot machines, said Rachel Volberg, an expert on the social costs of gambling, it should require that revenue be set aside to treat gambling addiction and study the long-term impact on communities.

Sun staff writer Michael Dresser contributed to this article.

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