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Horse Sense

Who's Betting How Much On The Slots Question

Alex Fine

By Edward Ericson Jr. and Van Smith | Posted 10/22/2008

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This is it, the big one, what could be the end of the slots debate in Maryland.

If Question 2 on Nov. 4's ballot is approved by voters, it will bring to a close a decades-long standoff over adding more ways to gamble legally in Maryland. The result will be a constitutional amendment that can only be changed with another referendum.

If it fails, the debate will continue. The gambling industry and its opponents will soon start fighting again, keeping lobbyists, lawmakers, and voters busy with a question that, at its core, was first answered 35 years ago, with the advent of the Maryland State Lottery: Should state revenues rely on people losing money in games of chance?

Most Maryland voters in 1972 answered "yes" to that question, and thus instituted state-run gambling, an enterprise that quickly became the state's third-largest revenue source, behind income and sales tax. These days, the lottery contributes half a billion dollars annually to the state's general fund. Now voters are being asked whether they want to add privately run gambling to the mix: 15,000 slot machines at five locations across Maryland, resulting in a funding mechanism for public education and the horse-racing industry without the heartache of tax hikes.

Question 2 is a big-money issue that draws big-money players, especially on the pro-slots side, which since the early 1990s has been spending money year after year to try to bring more of the state's politicians over to its cause. The anti-slots crowd, meanwhile, has depended largely on the inflexible stances of sympathetic legislators, who have tended to collect campaign donations from anti-slots business interests, including the restaurant, tavern, and bingo industries, as well as vending-machine companies whose "amusement only" devices have long been used for illegal gambling.

Divining the path of money-fueled influence peddling over the question of expanded gambling in Maryland since it began in earnest in the early 1990s has involved a convoluted series of investigative efforts. Legislators' votes and campaign finances had to be tracked and cross-referenced with business and court records and lobbying reports. With a straight-up referendum, though, understanding who is behind either side, and for how much, is simpler. The respective campaign-finance reports of the committees--For Maryland For Our Future on the pro-slots side, and Marylanders United to Stop Slots, the main group on the anti-slots side--supporting each side of the issue tell the story, and the only vote that matters is the one coming up Nov. 4.

History can be a guide to the future, and a brief look at what followed the 1972 lottery referendum shows that other purveyors of gambling asked for government help--and generally got it. Horse racing, bingo halls, and a variety of other legal gambling schemes said to benefit charities found allies among legislators while local authorities generally winked at illegal gambling, nominally out of respect for community traditions.

"We have every form of gambling that exists in Maryland already," lobbyist Gerard Evans said in 1994, when he and Annapolis' other top influence-peddlers first started pushing hard to let slots into Maryland. The point was that people are gambling here already, so the state should bring it into the taxable economy. In 1998, in the face of then-Gov. Parris Glendening's steadfast refusal to expand legalized gambling, then-Speaker of the House of Delegates Casper Taylor Jr., a slots advocate from Western Maryland, finished Evans' thought: "Taxpayers aren't getting anything out of [widespread illegal gambling]. It's all an underground economy because we don't want to face up to the reality."

Now, the game has changed. Voters are being asked not to face the reality of revenues foregone due to illegal gambling in Maryland, but the reality of massive slot-machine gambling in Delaware, Pennsylvania, and West Virginia, which lures Free State players across the state line. And instead of shepherding existing gambling activities in Maryland into a new era of coexistence with 15,000 legal slot machines, as was done after the lottery was introduced, the General Assembly this year acted to drive potential rivals of legal slots deeper underground by banning or phasing out slotslike bingo and poker machines already in use in Maryland.

Question 2's advocates say it will net $660 million in gambling income annually for the state by 2012, most of it money already being spent by Maryland residents who play slots out of state. If voters reject the plan, supporters say the result will be higher taxes and/or reduced public spending, poorer schools, less state support for public safety, and an eventual end to job-producing horses running on Maryland's racetracks. Not mentioned is the fact that if slots are defeated Nov. 4, their advocates will almost certainly return to Annapolis later to keep trying.

Opponents of Question 2 promise ruin if Maryland voters legalize slots again. The gambling industry uses skewed figures to make its case look good, anti-slots advocates claim, and instead of the money promised, it will bring only broken dreams and gambling addicts, bound to cause adverse effects that will ripple through the economy. The gambling corporations are themselves based out of state, opponents say, and will take most of the money home, and once they get more gambling in Maryland they will demand, and get, more.

If you haven't heard these competing claims, it is not for the campaigns' lack of trying. Once the state legislature paved the way for the referendum, the messages started being sent across the airwaves, on the internet, by canvassers, mailings, and speakers in churches, Rotary Clubs, business forums, and community meetings. The pro-slots group has spent more than $1.4 million on media this year, and a million more on signs, door-knocking, polls, and other field expenses. The issue has been debated ad nauseam. And in those debates, each side has often pointed to the other, sometimes hinting, sometimes declaring: You have a hidden agenda.

Here then is, as far as discernable, an account of each side's full agenda, as laid out in their respective public financial disclosures as required by election law. In these documents are the names, addresses, and dollars attributable to the combatants in this epic struggle. City Paper has analyzed them with one eye on the state's gambling history and the other eye on the business histories of key players--the better to set everything in its proper context.

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