Gov. Martin O'Malley's announcement that he will push for legalized slot machine gambling to help solve Maryland's budget woes was short on specifics, but he gave clues to his thinking that suggest he is exploring a slots program that would be similar to Delaware's.
While O'Malley said he favors "state ownership" of slot machines, that doesn't mean the state would build facilities and hire contractors to run them.
Maryland could, like Delaware, lease slot machines from vendors, link them to a central computer through the state's lottery and place the devices in privately run racetracks or other facilities.
Delaware put its slot machines at three privately owned racetracks. The track owners get a share of the profits in exchange for building, maintaining, staffing and managing the casino-like facilities.
Rhode Island and New York have similar slots programs, in which those states lease machines; Pennsylvania, West Virginia and many other states have regulatory and licensing systems but do not lease machines.
Charles Brooke, senior vice president of governmental relations for International Game Technology, a slots manufacturer, said past Maryland slots bills envisioned the state leasing the machines.
"The program that they've talked about is very similar to Delaware's and Rhode Island's," Brooke said.
Delaware Lottery Director Wayne Lemons said representatives of O'Malley's administration and some Maryland legislators have visited Delaware's racetrack casinos in the past few weeks to view their operations.
"We lease machines from the manufacturers," Lemons said. "The lease includes maintenance. They're hooked up to the lottery's computer system."
Steven M. Rittvo, chairman of the Innovation Group, a financial and marketing consulting firm that does work for the gambling industry, said it makes little difference whether the state or a racetrack/facility operator leases slot machines. If a state provides them, it just passes along the costs by taking a bigger share of the slots proceeds.
Lemons said that four vendors are licensed in Delaware to supply and maintain slot machines. Track owners decide how many of which brand they want, he said.
"Their revenue depends on how much gambling runs through their machines, so they have an incentive to keep the best machines on the floor," Lemons said.
