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Bingo devices under threat

They look like slots, they play like slots, they pay out like slots, and they have proliferated for years under a legal loophole.

But with Maryland girding for a debate over expanding state-sanctioned gambling, top lawmakers said yesterday that they intend to back legislation that would outlaw loosely regulated electronic gambling machines.

Placed in dedicated parlors or bars and restaurants from Western Maryland to the Eastern Shore, many of the machines have spinning cherries or BAR icons but are technically considered bingo games, not slot machines.

Several legislators, including Senate President Thomas V. Mike Miller and House Speaker Michael E. Busch, said the state should get rid of them because they compete with the lottery and could potentially diminish revenues from slot machines that would be allowed if voters approve their legalization in a November referendum.

"These machines have sprung up almost like a disease," said Miller, a strong proponent of legalized slot machines. "These are counterfeit slot machines, but the money goes to private entrepreneurs. It doesn't benefit the state."

The proposed ban is likely to set up a major fight on several fronts: one with the owners or operators of the machines, who have spent hundreds of thousands of dollars on lobbying and campaign contributions; another with officials from Western Maryland, where the machines are highly regulated and provide revenues for education and emergency services; and among nonprofit organizations throughout the state, many of which depend on revenues from the machines to survive.

Sen. Thomas "Mac" Middleton, who planned to file a bill today that would eliminate all electronic machines by the end of the year, said the spread of the machines in his Southern Maryland district reminds him of "the old days" when slot machines were in every bar or tavern.

"Some of us feel it puts the whole [slot machine] referendum in jeopardy," he said. "People see the machines cropping up everywhere and will say that they don't want them anywhere. Others might say, 'Well, I like slot machines just where they are now, I don't need to go to any of the tracks, so why should I vote for it?'"

Bruce Bereano, a lobbyist for Frank Moran & Sons, a Baltimore company that manufactures the Instant Bingo machines, said his client has always complied with the law.

If the bill passes, he said, nonprofits that receive money from the machine revenues, including fraternal organizations, rape crisis centers and veterans posts, might have to shut down.

A 2006 report by the Abell Foundation estimated that nearly 3,500 machines were operating in Baltimore City and Baltimore County, giving operators a windfall of $91 million to $182 million a year. Those machines were often labeled as "for amusement only," but payouts were made under the table.

However, the machines that are allowed to make legal payouts now number in the thousands. They are allowed to operate because of a 2001 ruling by the state's highest court, which said they are legal because the outcome of the game is not determined randomly, as it is with slot machines. Each machine has a preset number of winning combinations, which are distributed to players randomly.

State Comptroller Peter Franchot has made an effort to crack down on the illegal variety of the machines - seizing eight on one occasion from a Baltimore bowling alley - and has also audited the revenues of three bingo parlors in Anne Arundel County, although no action was taken against them, said Joe Shapiro, his spokesman.

Still, Franchot sent a letter this week to legislative leaders declaring his intentions to crack down even further.

Owners and operators of the devices have been a consistent and prodigious source of campaign contributions.

In the last election cycle, operators or manufacturers of the machines and their family members gave more than $170,000 in donations to nearly 100 political candidates and committees.

If charities find their fundraising diminished because of the ban, so be it, Busch said, adding that the operators had created "an underground economy."

"There's always worthy causes, but the fact of the matter is that there are numerous legislative initiatives that provide many services to people that are needed," he said, naming health care and education. "The services of the state need to be dealt with first."

Del. Kevin Kelly, an Allegany County Democrat, railed against the plans, noting that the electronic machines in his county are highly regulated by a gaming office, and that the tax money is used for education and emergency services.

"It's terrible. It's going to decimate my county," he said, noting that the games provided $1 million for a $40 million high school that was built recently. "Every penny is accounted for and taxed, so our problem is: How can we make up that funding?"

bradley.olson@baltsun.comSun reporter Timothy B. Wheeler contributed to this article.

Copyright © 2015, The Baltimore Sun
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