Devil in the details

December 12, 2003|By Jon S. Cardin

HERE ARE 10 things I have learned about slots from the testimony, reports, lobbyists, site visits, national experts and countless constituents:

1. Maryland is losing over $400 million in gaming revenue to neighboring states, money that should be injected into Maryland's economy. One of our primary concerns ought to be plugging the drain.

2. Maximizing slots revenue at the expense of other state revenue is poor public policy.

The experts assert that slots will significantly shrink the disposable income of Marylanders and tourists who spend their money on taxable goods and services.

In Gov. Robert L. Ehrlich Jr.'s slots bill last year, the payouts were 92 percent and the state received less than half of the remaining 8 percent. We must avoid slots bills in which the state gets only 4 cents on the dollar because 4 cents is not enough and because that dollar is lost to taxable businesses, from which the state already gets 5 percent.

3. There is an intrinsic moral issue related to the social costs of slots. Attorney General J. Joseph Curran Jr. paints an ominous picture of the long-term social and economic costs outweighing the benefits by a rate of 3-to-1. He reminds us that a governor's horizon is at most eight years, whereas the negative outgrowth of seeding slots could last for generations.

4. In our cost-benefit analysis, we must reconcile competing claims.

For example, libertarians believe gambling is an individually elective vice. Conversely, some say slots unfairly burden the poor, promote addiction and attack the most vulnerable people and businesses. Still others believe that the alternatives (expanded sales tax base, increase in sales tax, service cuts, etc.) have far worse ramifications for the poor.

To keep things in perspective, my analysis has slots as merely one revenue option among many.

5. The chutzpah of the racing establishment, especially the track owners, is demonstrated in its assumption that slots should be dedicated to its beleaguered industry.

I am sympathetic to the horse industry in Maryland for historical, economic and environmental reasons. But for Mr. Ehrlich or the owners to suggest that their needs transcend those of our children, our elderly and our other businesses is audacious.

Racetrack owners argue that they provide a good venue for slots, but they have failed to show why they merit a right to a monopoly. I could support racing industry subsidies, but that is a policy decision, not an entitlement borne by the horse people.

6. The money belongs to the state. I am not convinced that a windfall exists, but insofar as there is money to be made, the state alone is entitled to it. Therefore, our goal should be to maximize state revenue through state control and not to subsidize private industry. The one exception is to provide adequate assistance to communities directly impacted.

7. No one wants slots in his neighborhood (NIMBY -- Not in My Backyard).

My neighborhood, Timonium, an Ehrlich stronghold, boasts support for the governor's initiatives. Nevertheless, my community is unanimously opposed to slots at our racetrack. I agree. But what does NIMBY say about the fortitude and underlying wisdom of gambling expansion?

8. Casinos has become a dirty word but slots has not. The only difference between casinos and slots palaces is that casinos, by adding table games, appeal to a wealthier clientele.

9. I understand why many Marylanders feel uneasy about slots. Nevertheless, our neighbors usurp our wealth, our budget remains in crisis and our governor fails to consider other revenue options. To that end, our gaming policy, while not a foregone conclusion, should allay the above-mentioned concerns and focus on four goals: recapture lost money, maximize state profits and their control, maximize small business development and minimize social and community impact.

10. The best way to recapture lost money is to place our businesses as close to our competitor's as possible while remaining more convenient to the customer -- that is, the gas station phenomenon. Expanding gaming on or near our borders will capture folks before they leave our state to spend money elsewhere.

In addition, building facilities outside urban centers or population growth areas marginalizes effects on vulnerable communities and local businesses. Moreover, border areas with new facilities have a chance to grow their businesses.

By building cultural and multifaceted destination sites with restaurants, performance spaces and other amenities, we provide attractive and slightly more convenient venues than our neighbors. Hence, the risk to our established communities and its residents is minimized and the return for our state is maximized.

Jon S. Cardin, a Democrat, is a delegate to the Maryland General Assembly from the 11th Legislative District.

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