A day after Maryland's horse tracks announced severe budget cuts and reduced purses, Gov. Martin O'Malley said he believes slot machines at tracks are necessary to save the state's racing industry and the jobs that depend on it.
"The racing industry and the jobs and the open space that is used by the racing industry - all these things are threatened by their inability to compete with tracks in states around us who are able to offer slots," O'Malley said during a news conference. "We can't expect them to thrive, or even survive, ... if we handicap them and don't allow them the tools that the tracks in all the other states are using."
The governor has ordered Thomas E. Perez, who regulates racing as Maryland's secretary of labor, licensing and regulation, to visit Delaware, Pennsylvania and West Virginia to check out the competition. O'Malley said he is in discussions with Senate President Thomas V. Mike Miller and House Speaker Michael E. Busch in hopes of crafting a slots compromise as part of the effort to close a projected $1.5 billion budget shortfall.
The governor made some of his strongest comments to date in support of slot machine gambling the day after the Maryland Jockey Club announced that it would be reducing purses for the rest of the year because of competition from neighboring states where slots supplement racing.
Pennsylvania is in the midst of its plan to offer more than 60,000 slot machines statewide. Delaware recently adopted electronic table games for gambling, and Pennsylvania quickly followed suit.
A legislative committee in Delaware approved a proposal Tuesday to allow sports betting in the state to help it stave off competition from neighboring states, though the measure's prospects are uncertain.
The only setback for gaming in the area came with a vote over the weekend by residents of Jefferson County, W.Va., who decided not to allow table games at the Charles Town Races and Slots facility.
However, those involved in the debate there said the vote was born less of objections to gambling than of a desire to get a better deal for taxpayers. On the same day, voters in Ohio County in the western part of West Virginia approved table games for a racetrack casino there.
O'Malley has long said that he supports a limited slots program at the racetracks to support the racing industry, but he never conveyed the enthusiasm for the subject that his predecessor did. Gov. Robert L. Ehrlich Jr. made slots his top priority but was stymied four years in a row, largely by Busch's opposition.
O'Malley has generally mentioned slots as an afterthought in his list of ways for the state to fix its fiscal problems, but yesterday he named it as a key element in budget negotiations with Busch and Miller.
"We're trying to sort through all this and do it in the context that is comprehensive and broader than allowing it to be the one issue that derails compromise," O'Malley said. "We have been engaged in conversation with the speaker and also the president of the Senate about a comprehensive solution. ... Stay tuned."
Miller said that with the Jockey Club's announcement, "Hopefully, people will come to their senses." But Busch said yesterday that he remains wary of the kinds of slots proposals that have been advanced in the past few years. Among his chief objections have been the idea that giving slots licenses to track owners would amount to "unjust enrichment" and that people should have a say in whether slots come to their communities.
Busch reiterated his view that the state can subsidize the racing industry without giving a blank check to track owners. He noted that New Jersey supplements racing with proceeds from Atlantic City casinos but doesn't allow slots at tracks, and that Maryland's House of Delegates has twice passed bills to provide a supplement to the industry from unclaimed lottery funds, only to see them fail in the Senate.
"I concede that the horse racing industry is at a competitive disadvantage because purses in other states are supplemented by gaming revenues," Busch said. "We believe the number that the thoroughbred industry needs in a year is about $50 million to be competitive. ... There should be a set amount of money that we give them."
The political calculus for slots is likely to be difficult. Some Senate Republicans who voted for slots when Ehrlich was governor have said they would be reluctant to do so now that O'Malley, a Democrat, would be deciding how the proceeds would be spent. Also, large blocs of opposition remain in the House.
"Just like any other business, I am also wondering what responsibility racetrack owners are taking," Del. William A. Bronrott, a Montgomery County Democrat, wrote in an e-mail. "I don't sense a very high level of effort on their part to do what most responsible and smart business people do - take some personal responsibility to aim high, think creatively, know your audience, and modernize your marketing approaches instead of looking for very questionable, uncreative approaches like slot machines."
Comptroller Peter Franchot, one of the strongest anti-slots voices in the state, said the fact that voters in a West Virginia county that has slots rejected more gambling is a lesson to Marylanders that "slots are the wrong direction."
"Most people who have cancer would just as soon not have more cancer," Franchot said.
But the lesson of the Jefferson County, W.Va., vote is nuanced, said John Doyle, a Democrat in West Virginia's House of Delegates who helped lead the opposition to table gaming.
Although some residents oppose gambling of any kind, most in the community support the slots parlor at the racetrack there, Doyle said. In a year or two, they might be ready to support table games as well, he said.
William Rickman, who owns the Dover Downs racetrack and slots parlor in Delaware and who has worked to legalize slots in Maryland, said gambling expansion is inevitable.
"If you looked at the polls, the acceptability of slots [in Maryland] was much less five years ago than it is today," Rickman said. "People are seeing it more as entertainment."
Del. Richard B. Weldon Jr., a Maryland Republican whose district is just across the Potomac River from Charles Town, said he has close ties with Jefferson County and that people there seem happy with slots. That voters there rejected table games proves that their slots program is so successful that they're not worried about competition from Maryland, he said.
"I don't think you can find a portable classroom in Jefferson County, and every road from Harpers Ferry to Charles Town is newly paved, so, yeah, I would guess they're pretty satisfied," Weldon said.
One of the key stumbling blocks in Maryland has been the opposition of communities to having gambling in their midst, a problem Busch and other delegates have sought to solve by tying slots to referendums, either statewide or in the jurisdiction where slots are proposed, or both. Busch said he has mentioned the idea to O'Malley.
"I think the citizens of Maryland ought to take note that these other states have at least had referendums to determine the length and breadth of the operations," Busch said. "Regardless of what came out, it was an important lesson to draw because the citizens had a say."