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Retailers asking: Why stop at slots?

The Baltimore Sun

As Gov. Martin O'Malley makes a pitch for slot machine gambling as part of his attempt to address a $1.7 billion budget shortfall, a powerful retail lobby is asking that he go one step further by pushing for table games.

The Maryland Retailers Association, miffed by O'Malley's inclusion of a state sales tax increase in his budget package, is suggesting instead that the state approve full casinos.

Without them, Maryland will lose customers to West Virginia, which has approved slots and table games in some jurisdictions, said Tom Saquella, president of the organization.

"We would support legislation that would involve table games and full casinos," Saquella said. "We always felt that slots was good for the economy. We never bought this zero sum game."

Though an O'Malley spokesman and other lawmakers said this week that table games are unlikely to be part of any tax package approved by the General Assembly this fall or during the next legislative session, some argue that if the state legalizes slots in coming months, a debate over casinos would be imminent - and unavoidable.

House Speaker Michael E. Busch, a longtime slots opponent, likened the jockeying for slots and casinos among Mid-Atlantic states to an "arms race."

He predicted that if Maryland signs off on slots, there would be an 80 percent chance that the state would eventually expand those sites to include table games, such as blackjack, poker and craps.

"I don't think it'll be a surprise to anyone to see that these facilities will turn into full-blown casinos," said Busch, an Anne Arundel County Democrat.

"The myth of limited slots has been broken up and down the Eastern Seaboard. It's going to take place, there's no doubt about it."

O'Malley proposal

As part of a proposal that includes gas and sales tax increases and a plan to revamp the state income tax, O'Malley said Tuesday that the state should legalize slot machine gambling.

His plan calls for 9,500 state-owned slot machines. Some of the machines would be located at Maryland racetracks.

O'Malley told reporters that the slots plan would generate about $550 million for the state once implemented. About $100 million would go to supplement horse racing and $6 million to help problem gamblers.

O'Malley's predecessor, Republican Gov. Robert L. Ehrlich Jr., pushed unsuccessfully each year of his term to legalize slots.

Yesterday, Ehrlich told WBAL radio that "it's about time we get a slots bill passed."

Deal, no deal

Ehrlich said he was offered a deal in 2003 to gain passage of a slots bill if he agreed to an increase in the state sales tax, but he rejected the proposal.

"And so here we are four years later. We have lost a lot of farmland. We have lost a lot of jobs. We have lost a lot of breeding. ... We potentially could lose the Preakness," he said.

The slots issue has been as polarizing as any the General Assembly has debated, prompting concerns about the social impact of gambling, especially in poorer communities. But some, including Senate President Thomas V. Mike Miller, have argued that slot gambling provides a quick and practical fix for the state's budget woes.

Miller said he wants to see slots implemented before any discussion of table games.

"I'm not advocating it," the Southern Maryland Democrat said. "I think public opinion will demand something like that in the future, but for [now], I think we need to keep pace with our sister states."

Substitution

Representing about 700 businesses across Maryland, the retailers association is lobbying for O'Malley to include table games in any slots proposal. It is suggesting four locations: the Inner Harbor, National Harbor in Prince George's County, and still-undetermined sites on the Eastern Shore and in Western Maryland.

In exchange, the retailers want O'Malley to drop plans to increase the state sales tax from 5 percent to 6 percent. O'Malley hopes to raise $730 million by increasing the sales tax and extending it to health club memberships, property management and other services.

Three West Virginia counties passed referendums this summer approving table games. Pennsylvania has slots in five locations and would allow up to 61,000 terminals at 14 sites. Pennsylvania has also implemented electronic table games, and lawmakers have discussed the need for casino games, an effort to attract the Atlantic City crowd. Delaware also has slots and electronic table games.

Ahead of the game

Jeff Zellmer, legislative director for the Maryland retail lobby, said that if state lawmakers approve slots alone, they would be short-changing themselves, allowing West Virginia to remain a bigger draw for the region's gamblers and providing an opening to Pennsylvania to move to casinos.

"If we put slots in, they'll come in with casinos," he said of Pennsylvania. "We'd be behind again. This way we'd be ahead of the curve, the first one out of the starting block on that."

In 2006, racetracks with slots took in $3.6 billion nationwide, compared with $32.4 billion overall for commercial casinos, according to the American Gaming Association.

Warren Deschenaux, director of the office of policy analysis for the nonpartisan Maryland Department of Legislative Services, said table games could boost the state's gambling revenue.

"Conventional wisdom says that slots are usually between 70 percent and 80 percent of casino revenues," he said. "So, in theory, adding table games could, depending on other factors, increase revenues by around 25 percent."

Robert Carpenter, an associate professor of economics at the University of Maryland, Baltimore County, said the states are going to want to protect their revenue streams, and one way to do that is by offering extended opportunities for gambling.

The question, Carpenter said, is does Maryland want to serve state residents or attract vacationers from other places.

"Are we going to become a destination resort?" said Carpenter, who has studied slot machine gambling and horse racing in Maryland. "To be a destination resort, you'd want to offer more than slots."

Baltimore Mayor Sheila Dixon has opposed slots in the past. Her spokesman, Anthony McCarthy, said this week that Baltimore wants any plan coming out of Annapolis to address the social consequences of gambling.

"As far as the mayor is concerned, everything is on the table for conversation," he said. "There is a school of thought that tabletop gaming has a better financial benefit than slots. It employs more people at various levels, so therefore it gives cities like Baltimore more of an opportunity to maximize those dollars."

But Rep. Albert R. Wynn, a Democrat whose district includes the sprawling National Harbor project, cautioned against the governor's plan.

Said Wynn: "There seems to be very little support for slots and even less support for casinos in Prince George's County."

jennifer.skalka@baltsun.com

Sun reporter James Drew contributed to this article.

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