Baltimore Sun

Slots measure passes Senate budget panel

Senate President Thomas V. Mike Miller (seated) confers with state Sen. Patrick J. Hogan during the meeting of the Senate Budget and Taxation Committee.
After its second major rewrite of Gov. Robert L. Ehrlich Jr.'s gambling proposal in less than a week, a Senate committee approved last night a plan to permit 15,500 slot machines at three racetracks and three tourist destinations in Maryland.

The plan, which now goes to the full Senate for a vote, could shut out slot machines from both of Maryland's harness tracks -- Ocean Downs near Ocean City and Rosecroft Raceway in Prince George's County -- but it adds Dorchester County as an Eastern Shore site eligible for expanded gambling.

The most significant change to the measure came after hours of behind-the-scenes lobbying by state Sen. Gloria G. Lawlah. She vigorously fought to prevent having slot machines at both Rosecroft and the National Harbor development -- two sites located a mile apart within her district. The bill was altered to require at least two miles between gambling locations.

"They took out Ocean Downs and kept slots out of Ocean City, but why am I taking two sites in my district?" asked the Prince George's Democrat.

While Lawlah didn't explicitly say she preferred National Harbor over Rosecroft, she predicted the proposal from the development on the Potomac River near Oxon Hill "will be more upscale" than the harness track and ultimately would attract more gambling revenue.

Other senators said they anticipated their action would have the effect of shutting out Rosecroft in favor of National Harbor -- a site that has long been favored by Rep. Albert R. Wynn for gambling.

The 11-2 vote by the Budget and Taxation Committee is the same margin by which Ehrlich's slot machine proposal was approved last year, and Senate leaders predicted last night that the bill will win passage from the full chamber, perhaps as soon as the end of this week.

"I think it will be tougher than last year, because there are some more unknowns," said state Sen. Ulysses Currie, a Prince George's Democrat and committee chairman. "But I think we might do better than last year, because the governor is working harder, and we now know more than a year ago."

Opponents vowed to continue to fight the bill and emphasize how the measure permits slot machines far beyond the racetracks. "There's still a chance that slots will be coming to your neighborhood sometime soon," said W. Minor Carter, lobbyist for a coalition of anti-slots groups.

The bill passed last night is radically different from the 2003 measure narrowly passed by the Senate and defeated in a House committee, and it also varies significantly from the proposal introduced by Ehrlich this year.

Last year's plan permitted 11,500 slot machines at four racetracks -- Pimlico Race Course, Laurel Park, Rosecroft and a site to be built in Allegany County.

Ehrlich's original 2004 plan permitted 15,500 slot machines at the four tracks and two other unspecified sites along the Interstate 95 corridor.

As recently as Monday, the Senate committee was considering a revised plan that added two sites to the list eligible for expanded gambling: Ocean Downs and a third nontrack location.

But Senate leaders and the governor's staff spent hours over the past two days in closed-door meetings -- including an hourlong session late Monday night in which the governor lobbied eight senators to pull Ocean Downs out of the bill. Republican senators had threatened to kill the entire proposal over Ocean Downs.

Under the new plan, all six slot licenses would be assigned by competitive, sealed bids. A nine-member commission -- with three members each picked by the governor, Senate president and House speaker -- would make the selections.

Four tracks would be eligible to apply for the three racetrack licenses -- Pimlico, Laurel, Rosecroft and the Allegany site -- and each could receive as many as3,000 slot machines.

Three other licenses for nontrack locations would be selected from applicants in Cecil, Dorchester and Prince George's counties and Baltimore City. The committee excluded three counties eligible in the governor's proposal: Baltimore, Harford and Howard.

Some senators and lobbyists said the overnight decision to add Dorchester seems aimed at encouraging a bid to install slots at the 1 1/2 -year-old Chesapeake Hyatt Regency Resort in Cambridge, while others suggested it would permit slots at track owner William J. Rickman Jr.'s nearby off-track betting parlor.

Two of the three locations could have 2,000 machines, and the third could have 2,500 machines. Each of the winning bidders would be required to submit application fees of at least $10 million, although they could commit to higher up-front amounts in their proposals.

Track owners' bids could not ask for more than 36 percent of the slot machines' revenue, and nontrack bids' would be limited to no more than 30 percent -- ensuring that at least 51 percent of the gambling revenue would go back to the state for education funding. Legislative analysts predicted education revenue could exceed $800 million a year under the plan.

"The governor is pleased with the progress in the Senate," said Ehrlich spokesman Henry Fawell. "The important point is that we have bipartisan progress on the governor's plan to fund education with slots revenue."

Gerard E. Evans, a lobbyist for the Maryland Thoroughbred Horsemen's Association, praised the heavily amended measure last night for giving racing purses the boost needed to be competitive with other states. "It's a great bill, a marked improvement from last year," Evans said.

But Rickman -- who owns the Ocean Downs track and the Allegany site -- predicted the bill would spell the end for his harness track.

"Ocean Downs is doomed to oblivion," Rickman said. "It can't compete, so it won't last two years."

Rickman also questioned whether the parameters set by the committee will make it economically viable for him to pursue slots for Allegany.

The committee approved several amendments last night aimed at resolving concerns from the track owners about whether they could make money from the slots proposals, cutting how much money they need to spend to build their slots dens and how much they must reinvest each year in their racing facilities.