Altering his vision of legalized gambling to accommodate shifting politics, Gov. Robert L. Ehrlich Jr. proposed last night the construction of two slot-machine palaces along the Interstate 95 corridor in addition to thousands of video lottery terminals at four Maryland racetracks.
Ehrlich said the state should authorize two "non-racetrack destination locations" for slots along the major north-south highway that bisects Baltimore and many of Maryland's other population centers.
A bill unveiled by the governor late yesterday would allow such facilities to contain a combined 4,000 machines in either Baltimore, Cecil, Harford, Howard or Prince George's counties, as well as Baltimore City. Specific Locations would be determined by a commission controlled by the governor's appointees.
The governor's bill marks one pole in a debate that will grow clearer today when a House committee takes up a report of its summer-long study of expanded gambling. Shaped largely by House Speaker Michael E. Busch, the report divorces slots from the issue of helping Maryland's horse racing industry and calls for state-owned slots facilities.
A draft of the House report recommends slots halls be considered not only near Interstate 95, close to Maryland's border with Delaware, but also the Eastern Shore; and on major routes in the Frederick area between West Virginia and major metropolitan areas in Maryland.
In all cases, the report says, any slots halls should be built in areas that don't impinge on existing residential neighborhoods or in "highly congested commercial areas." It says they should be located in nonresidential areas near major thoroughfares. The right to manage slots emporiums should be subject to competitive bidding, the report says, to determine true market value.
It suggests otherways to help racing, including changing some regulations and designating a small share of proceeds from state-run slots facilities to the horse industry.
That's far different from the governor's proposal, which would confine most of the slot machines to racetracks but adds some nontrack locations. Overall, the governor's proposal increases the statewide total of machines 35 percent over the bill he supported last year, which passed the Senate but died in the House.
"For the past year, there has been a growing interest in non-racetrack locations," said Paul E. Schurick, the governor's communications director.
Under Ehrlich'sthe plan, three existing racetracks and one as yet unbuilt in Western Maryland would get 11,500 machines, the same as in a bill approved by the Senate last year. The proposal would generate at least $700 million for public education, although the governor's office could not provide an specific amount last night.
Busch, the chief critic of slots, favors the state constructing publicly owned slots palaces so that racetrack owners are not "unjustly enriched." overly enriched. While the governor did not explicitly endorse the public ownership concept, his aides indicated that he was willing to negotiate.
Also up for discussion, Ehrlich aides said: another Busch idea that would limit slots licenses to one per corporate owner, which could mean that Magna Entertainment Corp. and the Maryland Jockey Club would have to chose between their Laurel Park and Pimlico Race Course.racecourses.
"The governor has expressed a true willingness to work through any of the details," said James C. "Chip" DiPaula Jr., the governor's budget secretary.
Busch said last night that slots alone do not offer a solution for the state's finances, but indicated that the issue could come up for a full House vote - something that did not happen last year.
"I would not vote for what I call a stand-alone slots proposal. That does not mean that others won't have the opportunity to do so," he said. "I would hope that the vast majority of Democrats in the House would understand the dynamics of what they have to do to bring a comprehensive solution to the budget problem."
Senate President Thomas V. Mike Miller expressed support for the governor's legislation last night, saying the proposal would help prevent money from leaving the state.
"This bill will provide an economic boomlet to the state in terms of jobs, in terms of construction, in terms of money for education," Miller said. "He, like myself, represented a rural area, and agriculture continues to be the No. 1 industry in the state. And it's very frustrating to me to go home to my district and see billboards saying, 'Come to Charles Town, 3,000 more slots.'"
A draft of the House report, to be considered today by the House Ways and Means Committee, urges "strong consideration" of five to six state-owned, "destination-style gaming locations" for slots halls at key sites around the state.
"Since limiting video lottery terminals to racetracks only is not essential to the future success of the horse racing industry, video gaming locations beyond racetracks should be strongly considered," the report says.
Reaction to the governor's plan was mixed, with some lawmakers saying they could support the concept of gambling away from racetracks and others vowing they would block slots from their communities. "The governor is trying to strike a balance to get a bill moving," said Sen. E.J. Pipkin, an Eastern Shore Republican who represents Cecil County. "Without any concessions, we are back where we were last year." Pipkin said he would oppose slots at the Bainbridge site in Cecil, a frequently mentioned potential location, but could support other areas. Del. Frank S. Turner, a Columbia Democrat, was less accomodating. "Oh, never will it come to Howard County," he said. "Never. Never."
Shortly After the defeat of his slots plan last year, Ehrlich vowed he would spend no more political capital on gambling legislation. But with the costs of a multiyear schools reform package increasing and the governor ruling out sales or income tax increases, Miller asked the governor to submit legislation once again.
While Ehrlich said previously he considered this year's bill to be a "placeholder," DiPaula said yesterday that "we're going to put in 100 percent effort to get the bill passed."
Signaling a strong willingness to negotiate with Busch, Schurick, the communications director, said that only three conditions were deal-breakers: The governor would not accept slots at the Ocean Downs harness track near Ocean City, is still opposed to full-scale casinos, and refuses to allow a slots bill to be tied to a sales or income tax increase.
Under Ehrlich's plan, the non-racetrack sites would be selected by a blue-ribbon panel composed of five gubernatorial appointees plus two each appointed by Busch and Miller. The panel would be charged with selecting from bidders who offered the highest return to the state, and would also consider promised road improvements, job creation and minority participation.
Schurick said that he expected large development partnerships to participate in the bidding, which could open the slots market to a new cast of players.
"The subjective nature of the award process for the two off-track locations is disturbing, since it opens the door for more influence peddling and taxpayer ripoffs," said Jeffrey C. Hooke, a Chevy Chase investment banker who advocates auctioning slots licenses.
In much of its substance, the Ehrlich proposal is a repeat of the measure that passed the Senate a year ago, with 39 percent of the slots proceeds to track owners and 46 percent to education, with the rest going to other purposes.
"It's kind of a rehash from last year, with a couple of bonuses thrown in for parties who are yet to be named," said Hooke.
Paul Micucci, vice president of Magna Entertainment Corp., the majority owner of Pimlico Race Course in Baltimore and Laurel Park, in Anne Arundel County,said the company was just relieved to be included in Ehrlich's bill.
Sun staff writers Michael Dresser and Kimberly A.C. Wilson contributed to this article.
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