Slots issue at pivotal point for governor

Gambling In Maryland

Outlook 2004 : Turning Points

January 11, 2004|By Bill Atkinson | Bill Atkinson,SUN STAFF

The battle over legalized gambling in Maryland is at a high-water mark this year, say many of the participants in the debate.

"It's kind of like a comet going across the horizon," said Del. Michael E. Busch, the Maryland House speaker whose opposition threatens to thwart the governor's push for slot machines to produce revenue for the state. "It burns very brightly and starts to dim out. Obviously, I think they had more momentum last year."

Significant and contentious issues are typically taken up in a governor's second term. But if legislation to place slot machines at racetracks or elsewhere is rejected this year, some experts contend the impetus to do it next year or later will wane. If the economy improves or if Gov. Robert L. Ehrlich Jr. is forced to make cuts this year to balance the budget minus slots, opponents will have less reason to be convinced of the need to legalize gambling in 2005, many say. Legislative watchers also say it is unlikely that Ehrlich would want to push the issue into 2006, a state election year.

"It is very pivotal," said Michael Gisriel, a former delegate and now a lobbyist who has represented gambling industry clients. "Most of the substantive issues are done in the second or third year."

The slots idea has been debated in Annapolis for years. Former Gov. Parris N. Glendening famously vowed "no slots, no casinos, no exceptions" after initially indicating support for expanding gambling. Last winter, Ehrlich lost his bid for slots in his first legislative session as governor. His proposal would have allowed thousands of slot machines at four horse racing tracks.

Ehrlich's office did not return calls for comment on the subject, but the governor has said he will introduce slots legislation this year. He has not revealed the details of his latest plan.

His administration and other experts estimate that slot machines could generate at least $700 million in annual revenue. The money would help plug Maryland's deficit and could revive the state's ailing horse racing industry and generate money for state programs, such as education, supporters say.

"The economic impact [from slots] would be enormous," said Anirban Basu, chairman and chief executive of Optimal Solutions Group LLC, a Baltimore economic consulting firm that studied the slots issue for the state's largest racetrack owner.

The governor was expected to fare better this session after Busch, an Anne Arundel County Democrat, indicated he would discuss the issue on certain conditions as part of an overall revenue package. But last week, the House speaker said he would prefer a 1-cent increase in the state sales tax, to 6 percent, as a more stable source of revenue for education than gambling.

"All indications are that we are headed for a train wreck during this session," said Gisriel. The lobbyist was certain of a slots bill passing a month ago but has changed his mind on that recently.

"Unless this impasse can be resolved, it is unlikely that the speaker will let the members vote on the merits of the slots issue," he said.

Minor Carter, a lobbyist for an anti-slots coalition, said that if a bill isn't passed this year, its chances of passage in 2005 will dwindle because the General Assembly will have already reduced the state's $700 million revenue shortfall.

"Once they come out of [Annapolis] bloodied, battered, whatever, they have closed the deficit," Carter said. Opponents believe that there are hidden costs associated with slots, such as rising gambling addictions, crime rates and worker absenteeism.

Robert Goodman, author of The Luck Business and professor of environmental design at Hampshire College in Amherst, Mass., said if Maryland can't attract "huge numbers" of tourists to slots gambling, it is a "zero-sum game." The state will likely spend millions on dealing with a growing number of gambling addicts, he said.

But Virgil Helton, deputy director and chief financial officer of the West Virginia Lottery, said West Virginia netted $717 million from slots at horse and dog racetracks in fiscal 2003, up 20 percent from 2002 and up 64 percent from 2001.

TIMELINE

1968

Maryland bans slots.

1996

Gov. Parris N. Glendening vows no slots in Maryland.

2004

Gov. Robert L. Ehrlich Jr. pushes slots bill for second time, but House Speaker Michael E. Busch not swayed as session begins in Annapolis. Others say an improved economy and budget cuts this year would weaken argument for legalizing slots by 2005.

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