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Our View: It May Be Tough During A Budget Crisis, But Maryland Needs To Invest In Top-notch Slot Machines For Our Casinos, Lest Gamblers Continue Going To Other States

October 13, 2009

The good news is that after years of debate, a constitutional amendment and months of stops and starts, Maryland is on the verge of actually buying the slot machines that will partially solve its budget problems. The bad news: In the middle of an economic crisis and plunging tax revenues that are forcing severe cuts to health care, education and other top priorities, the state is likely to be shelling out millions more than budgeted if it wants to buy top-notch machines.

Analysts expect that operating expenses for Maryland's slots program - including the procurement of machines - will cost the state $65 million a year, while the 2 percent of slots proceeds set aside to cover them will generate about $27 million. And that doesn't account for the start-up phase when the state will need to obtain the machines but won't have any slots revenue to pay for them, an issue officials haven't decided how to contend with yet. Requests for proposals are due to go out later this month.

Maryland could have avoided this issue by making the slots operators responsible for providing their own machines. But giving the state control helps guarantee the integrity of the system - when it's fully operational, the centralized computer system run by the lottery administration will what's happening on every machine in the state in real time. Plus, if the state had given vendors the responsibility for buying the machines, it probably would have also had to give them a bigger cut of the proceeds than the 33 percent they get to keep now.

What's the difference between new, high-tech slot machines and the old-fashioned spinning reels with cherries and bars? Think of the difference between Pong and an Xbox 360. The new machines, with themes like Star Wars and Wheel of Fortune, are multimedia extravaganzas designed to attract players and hold their attention. Some of them even resemble blackjack or poker tables - complete with a video image of a dealer tossing cards onto virtual green felt. Legally, they are slot machines, but they play just like card games. (This begs the question of what exactly we've accomplished by legalizing slots but not table games, other than preventing casinos from hiring real live human beings to deal actual cards.)

There's something unseemly about the state seeking out the most addictive machines it can find to part gamblers from more of their money. But now that voters have approved slot machine gambling, that's the business we're in. It's foolish to think it would somehow be more virtuous for the state to avoid dipping into its general funds and buy machines that nobody wants to play. In this region, gamblers have a lot of choices, and the landscape is about to get more competitive. Delaware has approved table games, and Pennsylvania is on the verge of doing so. Some counties in West Virginia have them now, though not yet the ones closest to Maryland. Mediocre slots barns aren't going to keep gamblers from crossing state lines, and they certainly won't attract patrons from neighboring states.

It's going to be tough for Maryland politicians to tell those suffering from state budget cuts that they plan to spend millions on slot machines. But they have to do it. Now that Maryland has decided to have slots, all of us - even those who opposed expanded gambling in the first place - have an interest in seeing the program succeed, and it won't if we're saddled with unappealing machines. The gambling environment in the region is simply too competitive. The timing may be terrible, but investing in top-notch machines is almost certainly the single best investment Maryland can make right now.

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