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Official focuses on bar games

Franchot pushes effort for city, Balto. Co. to halt video gambling licenses

By Bradley Olson

Sun reporter

March 18, 2008

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Comptroller Peter Franchot is pushing for Baltimore City and Baltimore County to stop providing licenses for thousands of video gambling machines that critics allege make illegal, "under the table" payouts in area bars and restaurants.

Lawmakers in Annapolis drafted legislation this year seeking to outlaw the machines, only to discover that they already are prohibited. Under an opinion released yesterday by state Attorney General Douglas F. Gansler's office, payoffs from video poker games constitute "illegal gaming."

Baltimore City and Baltimore County license the devices and collect fees from bar owners who have them, even though police on vice squads in both jurisdictions have busted the operators in recent years.

"In the Baltimore region, there is a practice of the right hand not knowing what the left hand is doing," Franchot said. "We have a chance to fix this problem once and for all."

Some counties have tried recently to crack down on similar gambling machines.

Washington County officials, upset at the sudden proliferation of electronic bingo machines in their jurisdiction, have attempted to slap one distributor of the devices with 24 violations of its gaming statutes and $120,000 in fines. And the sheriff in St. Mary's County in Southern Maryland is preparing for a sweep to confiscate similar machines there.

Legislation approved by the Senate and under consideration in the House of Delegates would outlaw devices such as those now common in Southern Maryland. But language targeting the Baltimore-area machines was stripped from an early version of the bill.

Franchot said that leaves "a huge loophole" and asked members of the House of Delegates - who are scheduled to hold a committee hearing on the bill today - to close it.

But legislators and state officials who drafted the bill say they can't make the machines more illegal than they already are.

Senate President Thomas V. Mike Miller said in a written statement yesterday that the point of the bill being considered in the General Assembly is to outlaw devices that look and act like slot machines and have been operating legally either under a 2001 court ruling or by exploiting provisions of Maryland law that allow "charitable gaming."

The problem with the Baltimore-area machines is one of enforcement, Miller said.

Patrons play the games - often labeled "for amusement only" - and win by accumulating "free plays." That is allowed, but when establishments pay money or merchandise for the "free plays," the practice then becomes illegal.

"Where there is illegal gaming occurring that is clearly illegal under current law, I encourage Mr. Franchot and local law enforcement to enforce the law," Miller said.

A 2006 report by the Abell Foundation, a Baltimore nonprofit, found that as many as 3,500 of the devices exist in Baltimore City and Baltimore County, paying out between $91 million and $181 million a year.

"In Maryland ... the illegal slot business appears to be condoned by prosecutors, courts, and liquor boards," the report said. "Their unresponsiveness keeps the industry humming; criminal charges are routinely dropped and fines are too small to act as a deterrent. The typical Baltimore City liquor board fine for illegal gambling is $225, less than half the amount of money the average gambling machine earns in a week. The Baltimore County liquor board does not hear any gambling cases."

Baltimore City spokesman Sterling Clifford did not return a call seeking comment for this article.

Ellen Kobler, a Baltimore County spokeswoman, said the county has no enforcement problem, noting that last year, the county seized dozens of machines and "went after" 38 individuals believed to be involved in illegal gambling activities. She could not say how many of those cases resulted in successful prosecutions or what the penalties were.

Kobler also said the machines are not illegal if they don't make payouts.

"You could say it's like a deck of cards," she said. "A deck of cards is legal until you start playing poker for money."

She said the county does not renew licenses for vendors or establishments found to have violated the law.

In one such case last year, the owners of the Corner Stable, a restaurant in Cockeysville, were charged with several gambling violations, but prosecutors agreed to a "stet agreement," which basically puts the allegations on hold. The county confiscated the machines and $3,225.

Franchot made his call for legislation banning the machines outside that restaurant.

Two of his alcohol and tobacco inspectors said they saw two of the machines inside the restaurant in plain sight.

The recent proliferation of similar devices in rural Maryland has caught lawmakers' attention. Owners and distributors of the machines last year lobbied state's attorneys in Allegany, St. Mary's and Washington counties, threatening in one case to sue if their machines were not allowed. They spread by the hundreds, particularly in Southern Maryland.

In a case that will be heard next month by the state's Office of Administrative Hearings, the Washington County Gaming Office has cited distributor Frank Moran & Sons for 24 violations of its local gambling regulations.

Bruce C. Bereano, a lobbyist for Frank Moran & Sons, said he was unaware of the case but that his client obeys the law.

"If the local authorities say no" to machines they have asked to bring into Maryland counties, "we stop and we abide by that and go on our way," Bereano said.

bradley.olson@baltsun.com