A November slots referendum designed to keep millions in gambling dollars from going to nearby states would, if approved, likely end up sending millions in tax revenue to out-of-state racehorse owners, according to a new analysis by a taxpayer advocacy group.
In 2007, 58 percent of Maryland thoroughbred race winnings went to out-of-state owners, according to the report to be released today by the Maryland Tax Education Foundation.
If that trend continues, much of the $80 million in annual thoroughbred purse subsidies under the proposed legislation will continue to flow to non-Maryland horse owners and a small number of in-state breeders, said Jeffrey C. Hooke, a gambling analyst and president of the Bethesda-based nonprofit.
"If people think this referendum is going to save the Maryland racing industry, I think they're sadly mistaken," said Hooke, an investment banker who supports legalized gambling but not subsidies to private racing interests.
Hooke has studied Maryland gambling proposals for years and has criticized some previous plans as being too generous to the gambling industry. He said his think tank is not funded by either slots opponents or proponents.
Maryland horse breeders and pro-slots interests said Hooke's statistics merely reflect the slow exodus in recent years of racehorses to neighboring states that offer purses fattened by slots subsidies.
If voters approve expansion of slots here, they say, breeders will return to Maryland and local farms will again flourish, in turn boosting the regional economy and protecting green space from further development.
"If the referendum passes, then it will be easier to encourage people to bring top stallions ... to the state of Maryland," said James B. Steele Jr., president of the Maryland Horse Breeders' Association. "I know people who reluctantly left the state. I think some of them will come back."
In the November referendum, voters will decide whether to amend the Maryland Constitution to authorize 15,000 slot machines at sites in downtown Baltimore, Anne Arundel, Allegany, Cecil and Worcester counties.
The state's education budget would be the chief beneficiary of a slots-related windfall estimated at about $600 million a year, but the plan would also give as much as $100 million annually to the struggling horse racing industry.
A Sun poll in January found that a strong majority of likely voters oppose using state funds to prop up the racing industry, though most poll respondents did favor the slots referendum.
