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The Slots Debacle

If you think Maryland’s legislative branch has a propensity for stifling common-sense business moves and the resulting tax benefit, no further proof need be given than its bungling of the slots referendum and implementation. The General Assembly has already put the state at least eight years behind border states like Delaware and West Virginia whose coffers have been filling with proceeds from gaming revenue.

In 2002-2003, when slots first appeared feasible, the major holdup was that – gasp! – a Republican governor might actually get the credit. Rather than come out and say that, the House speaker blamed his blockade on daddy issues, which somehow were quelled when a Democratic governor was elected.

Did I leave out the hypocrisy of the anti-gaming legislators? Oh, I must have missed that while buying my kids a Slurpee at the neighborhood 7-Eleven, you know, as they gazed at the colorful scratch-off lottery tickets behind the counter, near the Powerball line, caddy-corner to the Keno machine.

In the meantime, Marylanders and tourists kept taking their gambling money to sister states, shaking their heads at the futility of elected officials.

In 2008-09, after slots easily passed a statewide referendum by nearly a 3-to-2 margin, the political and bureaucratic dysfunction got worse. The restrictions on the slots licenses led to a paucity of bids, several of which were defective on their face. And let’s be clear – if you can’t make money in the gaming industry, you can’t make money, so something had to be wrong with the process.

The rationale given by experts is that the 67 percent gaming tax is far too high given the investment required. One of the five sites mentioned in the slots referendum failed to even garner a bid (Rocky Gap), another is being held up by local litigation (Arundel Mills) and a third awaits a new bidder (Baltimore City).

By the way, that large empty space south of the stadiums on Russell Street is where the proposed city casino would go. Did I mention that, in addition to the 67 percent tax, the successful bidder for the city slots license also gets to pay ground rent? Ahhh, nothing says Baltimore City like ground rent.

Here’s the biggest joke of all: By the time Maryland’s slots parlors are up and running, most Marylanders and tourists will once again be taking their gambling money to border states, shaking their heads at the futility of elected officials.

You see, neighboring states have realized that if you’re going to allow slots, you might as well allow table games (e.g. poker, blackjack, roulette), because not everybody likes pushing a button for three hours, hoping for a row of 7s or to electronically spin the Wheel of Fortune. To their credit, politicians like Mike Miller, Catherine Pugh, and Baltimore’s new mayor, Stephanie Rawlings-Blake, understand this common-sense approach and have expressed it to their constituents.

In the interim, Maryland, like most states, is in desperate need of revenue. The slots gaming tax would mean more money for schools and related infrastructure. Ultimately, that’s what this is about and why the dysfunction of the General Assembly is distressing.

One comment

  1. I agree with your analysis of legislative incompetence in the handling of slots, but must take issue with one assumption that continues to fool the press and the public.

    Although the language of the slots referendum may lead a casual observer to believe that “[t]he slots gaming tax would mean more money for schools and related infrastructure,” that is not factually correct. Ironically, even as legislators disguised the constitutional amendment with language favoring schools, they quietly passed an appropriations bill that channels the money far from the classroom.

    Call it creative accounting. Call it political manipulation. But after reading and digesting a bill that did not go on the public ballot, you won’t call it a pro-education bill. See Brief of Appellants at http://www.kramerslaw.com/press-room/cat_view/24-challenging-slots-ballot?start=15.

    Unfortunately, slots will not save the schools or the State from the incompetence of our legislative leaders. Nor will the voters, who will undoubtedly send them back to Annapolis for another four years of frustration.