Gambling tax would apply to pinball, video games Senate panel narrowly approves bill


A Senate committee has approved a bill that would put a 5 percent tax on gambling in Maryland, a levy that also would apply to money dropped into pinball machines, video games and video poker devices.

Sponsored by Sen. Julian L. Lapides, D-Baltimore, the measure squeaked by the Budget and Taxation Committee yesterday on a 7-6 vote.

"Of all the things that have ever been proposed to be taxed, if anything makes any sense, this is it," said Sen. John A. Cade, R-Anne Arundel, a co-sponsor of the bill.

Mr. Lapides accepted amendments to the bill that would essentially keep small church bingo games and other such operations from having to pay the tax by exempting gambling games operated only by volunteers for nonprofit groups.

The tax -- 5 percent on gross receipts, or the total money wagered -- is aimed at the various forms of gambling not currently regulated by the state. That would include everything from so-called tip jars in Western Maryland to slot machines on the Eastern Shore to casino nights in Prince George's County to professional bingo operations in Anne Arundel. The State Lottery and horse racing would not be subject to the tax.

The nongambling devices covered by the bill -- the pinball and video games as well as the video poker devices that many think are used for illegal gambling -- would, like slot machines, be required to have tamper-proof counters installed.

Mr. Lapides originally thought the bill would raise more than $100 million, allowing the General Assembly to kill the state's keno game without suffering a revenue loss.

But the Department of Fiscal Services estimated the tax would bring in only $10 million a year. Mr. Lapides contends it will actually raise much more though he has backed off his initial estimates.

Mr. Lapides has raised the possibility that the tax could be administered by a gambling commission proposed by House rTC Speaker R. Clayton Mitchell Jr. designed to control the same forms of gambling the Lapides bill seeks to tax. Mr. Mitchell's measure received approval from a House committee this week.

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