A spin of the wheel

The Baltimore Sun

Even the most ardent supporter of Maryland's approach to slot machine gambling has to be a bit disappointed with the results so far. The economic downturn and the state's hard-nosed approach to profits and investment requirements resulted in just six development proposals for the specified five locations. Two of the bids failed to include the mandatory licensing fee (including, stunningly, the one submitted by the Canadian-based owner of the Laurel and Pimlico racetracks) and are therefore likely to be disqualified.

At minimum, it means the state budget will be short about $40 million in licensing fees in the next fiscal year. But more troubling is the possibility that the enterprise might not produce anywhere near the maximum 15,000 machines approved by referendum last fall. That would mean the loss of millions - perhaps hundreds of millions - of dollars in state revenue in several years.

But right now, that's only a possibility. Even with the potential disqualifications, the state would still be on the path to license at least 6,550 machines and perhaps 10,000 or more under the existing bids - assuming proposals for Baltimore and Cecil County are beefed up. That's still a lucrative enterprise.

Another positive development is the proposal by Baltimore's David Cordish to develop the Laurel location into a billion-dollar entertainment and hotel complex at Arundel Mills. That could turn slots into something beyond a budget-balancing fix. His plan would not only provide thousands of jobs at a time of rising unemployment, it would also create a real economic engine and tourism mecca for the region.

That makes state Senate President Thomas V. Mike Miller's call for a bidding do-over premature at best. A supporter of Maryland horse racing, Mr. Miller is no doubt unhappy with Magna Entertainment Corp.'s failure to include the required licensing fee with its Laurel bid. It's bizarre that a company that spent $2 million on the slots referendum chose not to put one penny behind its proposal.One key to making this work, however, rests with Mayor Sheila Dixon, who may yet walk away from a city slots location because it won't produce the $36 million in annual rent she was counting on to lower Baltimore's property tax rate. That would be a mistake - for the future of Pimlico and the Preakness and most especially for city schools. The mayor's heart was in the right place, but the state's high tax on slot machine profits gives her little to stand on.

Better for the city to get what it can for tax relief and focus on making the city's slots facility into a retail-restaurant-entertainment venue like Mr. Cordish's bid. The city is too dependent on state aid to ignore the consequences of what losing out on 3,750 slot machines in Baltimore would mean for the state budget.

Later this week, the commission in charge of awarding the slots licenses will offer an analysis of the bids and spell out what the state's options are. At the moment, the most attractive is to let the process continue without political interference.

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