Slots coming back to state

Friday, Nov. 7, 2008

Voters broke the years-long legislative impasse on the highly flammable issue by authorizing a constitutional amendment to legalize 15,000 slot machines at five locations statewide that will generate sorely needed revenue for state coffers.

The referendum, which was expected to be a close vote, passed 59 to 41 percent statewide and was favored by voters in all 24 jurisdictions in Maryland. Supporters said the decisive win was a mandate for stronger schools, which will receive the largest percentage of slots proceeds, and no new taxes to fill a gaping revenue shortfall.

"There are still tough choices to be made in Annapolis to address the budget crisis, but thanks to the new revenue due to the passage of Question 2, our children's future will be protected," said Frederick W. Puddester, chairman of the pro-slots For Maryland For Our Future committee, in a statement sent to supporters on Wednesday.

Maryland will join 37 other states that currently have some form of legalized electronic gaming.

Support for the referendum was surprisingly high in Southern Maryland, where slot machines dominated the landscape in the 1950s and 1960s, bankrupting families and tarnishing the region's image for years.

Voters in Calvert and St. Mary's counties supported the constitutional amendment by identical 63 to 37 percent margins, while the spread was 64 to 36 percent in Charles County.

"It's important to remember that slots in Southern Maryland was here a very long time ago and that memory is fading in much of the county," said St. Mary's College of Maryland political science professor Michael J.G. Cain, referring to the thousands of new families who have moved to the region after slots were removed in 1968.

"The past is not prologue anymore," echoed former state senator J. Frank Raley, who helped to outlaw slots four decades ago and remains one of gambling's most vigorous opponents.

Another likely contributing factor is the distance of the proposed slots parlors from Southern Maryland.

The gambling halls will be located in Allegany, Anne Arundel, Cecil and Worcester counties and Baltimore city, pending zoning approval in each community, which is the next battlefield in the slots debate.

The sluggish economy played into the hands of well-financed slots proponents, who argued that gambling proceeds would eliminate the need for painful cuts caused by large budget deficits.

Opponents conceded that the economic downturn made efforts to defeat the referendum very difficult.

"They saw this as a way of easy money," Raley said. "This was a good time for that to be on the ballot because the economic system has really got people upset and nervous and it's money."

The budget challenges trumped opponents' arguments that slot machines will not yield the anticipated revenue and will lead to costly social ills like gambling addiction, increased crime and political corruption.

"When you have legitimate ties to gambling, that gives the gambling interests wide open spaces to work the legislature and use their money, so they become a very powerful force as far as what the legislature does," Raley said.

The slots package, carefully constructed alongside spending reductions and $1.4 billion in tax increases during last year's special session to eliminate the $1.5 billion structural deficit, is expected to generate more than $600 million annually for the state once they are fully implemented in fiscal 2013.

But they will not help to plug a gap between revenues and expenditures that could exceed $1 billion in the next few fiscal years.

About half the revenues will go towards education with the balance divided between slots licensees, the horse racing industry, minority business initiatives, a gambling addiction treatment center and other programs.

Thoroughbred owners lauded the measure's passage as an industry-saving decision.

Gambling opponents, who were heavily outspent during the campaign, relied heavily on the faith community to push for the defeat the referendum, but the economic slide reinforced supporters' contention that the state needed the estimated $400 million in slot machine revenue that currently flows to states with legalized gambling.

"The current fiscal headwinds made this a tough sell in saying we need to get revenues in more traditional ways," Cain said.

The focus now shifts to putting the 15,000 slots terminals in place. Gov. Martin O'Malley and legislative leaders will appoint members to the State Lottery Commission, which will own the machines and govern their use, and a separate panel that will consider bid proposals at the five sites.

Bids for the five licenses must be submitted by Feb. 1. Legislative leaders recently said they might have to revisit the percentage of proceeds that slots operators receive to attract bidders who receive a higher slice of the pie in other states.

The Maryland Jockey Club announced on Wednesday plans to apply for a license at Laurel Park in Anne Arundel County.

Opponents pledged to continue their fight against slots at the local level, but it appears the biggest hurdle was cleared with the referendum's passage.

No new slot machine parlors or types of gambling can be approved without another referendum, which Raley said is good to ensure gaming stays out of Southern Maryland.