|Time is running out in Annapolis, where the General Assembly must pass a balanced budget by March 31.
Since before his election, Governor Ehrlich has assumed that more than
10,000 slot machines will help fill a big hole in next year's budget. After
all, our new governor was a strong and outspoken advocate for slot machines
during his campaign. And, of course, he won the election.
But the election was not a referendum on slots.
Voting for Ehrlich was not the same as voting for slots, and many people
voted for the new governor who do not support slot machines.
Ehrlich and his staff made a mistake crafting a budget strategy that depends
on a new form of state sponsored gambling being in place this year. Making
state government dependent on slots, and addicted to it, is not something
that ought to be done in haste.
Institutionalizing slots is as complicated as it is controversial. The
current wrangling about various elements reflects the fact that it isn't
simply a matter of yea or nay. Many unresolved questions deserve ample time,
thorough consideration, and more participation by the citizens of the state.
That isn't going to happen if the governor and assembly, operating in a
crisis atmosphere, push unexamined legislation through the process in the
next two or three weeks.
Rushed or not, the governor has taken time to negotiate the details with
racetrack owners, who got a lot of input this week. A meeting or two, and
already the one-time gambling licensing fees have been cut by two-thirds and
gambling proceeds earmarked for schools have been reduced.
The current budget dilemma is not a good enough reason to abandon good
process and be saddled with mediocre results. But, so far, Ehrlich appears
determined to race ahead, with blinders on, in spite of stumbling out of the
If the finish line is to be pushed back a year or longer to allow for a more
thoughtful approach, it will likely have to be over the objections of
Governor Ehrlich and Senate President Mike Miller.
Ehrlich's gubernatorial campaign received more than $120,000 in
contributions from racing and gambling interests. Miller has also been a
major beneficiary of the racing industry. In recent months, a subsidiary of
the Maryland Jockey Club has given more than $200,000 to a national
political action committee headed by Miller.
The general assembly doesn't have to say no, right now. But it ought to say
Among other things, a little time will give us a chance to reconsider the
connection between slots and schools. As rhetoric or reality, binding a
percentage of gambling revenues to education funding is a cheap form of
political blackmail, and leaders who accept that ought to be ashamed of
There is nothing about either gambling revenues or school funding that makes
the connection any more natural or reasonable than linking the income from
slots to highway maintenance or sewage treatment.
The state generates revenues in a number of ways, and it distributes the
money according to various commitments and priorities. Whether you favor
slots or not, let's stop pretending that supporting our schools and
educating our children has anything to do with gambling. If we enable the
gambling industry to establish a bigger foothold in Maryland, it will not be
something we do for our kids.
It is constructive to look at South Carolina, which is a rare exception to
the rule, having shut down a $3 billion-a-year gambling industry in 2000,
after realizing they had made a mistake.
In South Carolina, it wasn't about slots machines. Instead, they added tens
of thousands of video poker or blackjack machines. But the bottom line is
that it's all electronic gambling.
Gambling operators routinely underreported income to evade state taxes,
according to two state revenue commissioners. The gambling industry "has
been lying like a rug about the profitability of the business," one said.
The industry evaded rules intended to control gambling, such as limits on
payouts and on the number of machines allowed at a single location.
The state's top law-enforcement officer said that organized crime was moving
into the state, attracted by the huge amounts of untraceable cash generated
by the gambling machines.
One major gambling operator was convicted of bribing a sheriff's deputy for
protection from criminal investigations. Other major gambling operators had
convictions for tax evasion and conspiracy.
Video gambling interests quickly built one of the largest lobbying
operations in the state, spending hundreds of thousands of dollars to push
their cause in the state legislature. When Governor David Beasley came out
against gambling in 1998, the industry poured hundreds of thousands of
dollars into the campaign coffers of his opponent. Beasley was defeated for
re-election that fall.
Addiction counselors in South Carolina reported a fourfold increase in
people seeking help for gambling addiction. Studies estimate that anywhere
from 1.5 percent to 7 percent of the adult population in states with legal
betting will become compulsive gamblers.
If we install thousands of slot machines, we can expect to experience many
of the same problems in Maryland. And, as long as we have gambling or
seriously entertain the possibility, we can expect gambling interests to
become a permanent part of our political and electoral landscape, as they
were in the recent election.
What can we expect in the future?
The Washington Post reported that "some lawmakers have said representatives
of Las Vegas casino magnate Steve Wynn told them he is planning a trip to
Annapolis to make a personal pitch to build full-blown gambling palaces in
Maryland. Harrah's Entertainment Inc., a major casino and riverboat firm,
has hired a local lobbyist. Horseshoe Gaming Holding Corp., which owns
casinos in Mississippi, Louisiana and Indiana, has been interviewing local
lobbyists as well."
There are a lot of concerns and uncertainties if Maryland legalizes this
particular form of gambling. But while there is a lot at risk, it won't be
a financial risk...to the state, because, just like the casinos in Las Vegas
and Atlantic City, the "house" rules guarantee a big profit. Racetrack
owners and horse breeders will make a lot of money. The state of Maryland
will make a nice profit, too.
The people who put money in the slot machines, and their families, will lose
$1.3 billion...the first year.