Md. Budget Crisis: Slots Take Center Stage as Special Session Reaches End of First Week

By BERNIE BECKER, Capital News Service

ANNAPOLIS (November 5, 2007) - The debate over slot machines dominated the fifth day of the special legislative session Friday, as Gov. Martin O'Malley's top legislative aide, Joseph Bryce, faced tough questions from lawmakers following dueling rallies in the shadow of the State House.

The governor, meanwhile, flanked by Senate President Thomas V. Mike Miller and House Speaker Michael Busch, said he was optimistic his proposal for a referendum on slot machines in the state will pass.

Slot machines are a key element of the governor's plan to bridge a $1.7 billion budget shortfall. Even though they would provide little revenue over the next few years, the administration says slots would eventually produce around $700 million a year, about half of which would go toward education.

O'Malley's proposal, which would go to referendum next November, would allow for up to 15,000 slot machines at locations in Baltimore City and Allegany, Anne Arundel, Cecil and Worcester counties.

The bill is based on a slots bill the House passed in 2005 that allowed for 9,500 machines at four locations. But the 2005 bill called for slots in Frederick and Harford counties, while O'Malley's bill substitutes Baltimore City and Cecil and Worcester counties, moves questioned by lawmakers.

Delegate Craig Rice, D-Montgomery, asked Bryce why Frederick County was removed since it is close to Charles Town, W.Va, which has the most slot machines in the region.

Delegate Page Elmore, R-Somerset Bryce about switching Cecil for Harford, which he said would put two slot parlors on the Eastern Shore.

Bryce responded that, even without slots in Frederick County, slot machines in Anne Arundel County would be as close to the Washington, D.C., suburbs as Charles Town.

He also said that, once Baltimore was included in the proposal, it did not make sense to place slots close by in Harford County so the administration moved up Interstate 95 to Cecil County.

Delegate Ron George, R-Anne Arundel, asked Bryce why slots could not be addressed in January's regular session, while Sen. Lowell Stoltzfus, R-Somerset, questioned why a constitutional amendment was needed to legalize slots.

Bryce said that slots had so dominated discussion in the state and was such an important issue that it needed to be resolved quickly.

He also said slots is a big enough and complicated enough issue that it merits a constitutional amendment. Bryce later told Stoltzfus he "would be happy to work with" Stoltzfus if it meant the senator would vote for the bill.

Stoltzfus, who like other Republicans has vowed to vote against slots in the special session, responded not to expect that to happen.

On Thursday, the House Republican Caucus announced that it would not support a referendum on slots during the special session of the legislature.

“The Constitution of Maryland is not the vehicle for a piece of slots legislation” said Minority Leader Anthony J. O’Donnell (R-Solomons). “This document is meant to stand the tests of time, as a repository for the broad, fundamental ideals of our government. Specifying the locations of video lottery terminals is hardly a fundamental value of government.”

The House Republican Caucus is in favor of slots, but they differ on the implementation. An analysis of a Republican-prepared comparison of the Governor's plan for slot vs. what Republicans want indicates the key difference is that Republicans want more control placed into the hands of private business concerns instead of the state government.

Republicans say they want slots in six locations determined by the "free market" vs. the five proposed by the Governor. Republicans also want slots to be owned by "private enterprise" vs. the state government.

Republicans are also calling for a "fair-market auction" to determine the hold rate for the slots. The Governor's plan say this is possible, but the auction winners would be selected by a government-determined formula. Republicans say they want the winners determined by an "independent investment bank to the highest bidder." The hold rate is the percentage of money that a slot machine would pay out to the customer vs. keep for the operator. A hold rate of 90% means the mean would return $90 of every $100 and keep $10.

But Miller, speaking after the joint news conference with Busch and O'Malley, said he thought some Republicans would eventually support the referendum.

At the pro-slots rally, organized by the Maryland Jockey Club, Miller told the crowd he knows what horse racing means to Maryland, noting that George Washington had come to Annapolis to bet on horses.

Mark Sharp, a horse owner and trainer, said at the rally slots were vital because horse racing "was hanging on by its shirttails," pointing at increased purses in neighboring states that had approved slots.

Horse trainer Tim Hooper told lawmakers that he had moved from Pennsylvania seven years ago because of the strength of Maryland's horse industry. Now, purses in Pennsylvania have surpassed those in Maryland, "but I don't want to move back."

"I've seen what slots can" do, Hooper said.

Sharp and others dismissed the claim that slots can increase crime and have adverse social effects.

But slots opponents disagreed. Delegate Luiz Simmons, D-Montgomery, called slots "the crack cocaine" of gambling and quoted O'Malley, who said slots "disproportionately target the poor" when he was mayor.

And Paul Wells, who runs a ministry for ex-offenders in Prince George's County, said he gets "to see the results of gambling," when addicts gamble away rent and food money.

Slots affect "the least, the lost and the left behind" the most, he added.

(David Noss contributed to this article)

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