Slots in Maryland: Both sides of the coin

October 19, 2008 - 12:18pm

Pro- and anti-slots partisans squared off earlier this week in a debate on the upcoming referendum before the Rotary Club of Frederick -- with the opponent calling slot machine gambling predatory, while the supporter derided state taxes as the real predator.

The state already raises gambling revenue from the lottery, and a study by The Frederick News-Post found the money raised in Frederick County comes disproportionately from low-income areas.

For the 2008-2009 school year, half the county's elementary school districts -- 17 out of 34 -- report having 20 percent or more of their students in the federal Free and Reduced Price Meals program.

But districts with 20 percent or greater participation in the FARM program account for 11 of the 13 districts -- 84 percent -- where lottery retailers reported total lottery sales of $2 million or more between fiscal years 2005 and 2007.

All nine schools in districts where lottery retailers reported more than $3 million in sales reported FARM participation rates of 24 percent or higher.

If voters approve Question 2 in November, Maryland's constitution will be amended to allow the state to license a total of 15,000 video lottery terminals, essentially computerized slot machines, spread across five locations in the state. Under the state law governing how the revenues would be divided, 48.5 percent would go to fund education and school construction, 33 percent would go to the slot machine venue operators, and 7 percent would go to the horse industry, with the rest being divided among other uses.

Despite slots supporters' assertions, slot machines in Maryland would be a tax, said state Comptroller Peter Franchot.

"It is a tax, it's a tax on working families," Franchot said. "Huge amounts of money will come out of working families."

Introducing slots will result in a drain on public services, and an increase in crime rates, Gregory Barford, of Stop Slots Frederick, told the Frederick Rotary Club at its debate Wednesday.

Maryland should set aside more of its proposed slots revenue for treating problem gambling, slots supporter W. T. Mills said at the same debate.

But, he said, gambling is already happening -- in the form of the lottery and people traveling out of state.

Some 90 percent of Charles Town Races and Slots' business comes from out of state, with most of that coming from Maryland, according to the racetrack's operators.

"We're getting the fallout with none of the gain," he said.

The state needs more revenues for education, and the horse racing industry needs the help slots will provide as well, Mill said.

As taxes or as slots revenue, he said, the money for that will come out of people's pockets, and with slots, people at least have the option of whether to pay.

"Talk about predators," he said, "The tax collectors are your predators."

Barford disagreed, saying the state has a spending problem, not a revenue problem.

Festival Major Liquors in Frederick had $2.8 million in lottery sales between fiscal years 2005 and 2007, the most of any lottery agent in Frederick, according to the Maryland Lottery Commission.

Eric Van, the store's owner, said he sees all types of people coming in to play the lottery.

In his opinion, gambling is like drinking or smoking, in that it's something that someone either decides to do, or decides not to do.

Alex Marine, of Acer Farm in Lewistown, said his industry needs the support it will get if the slots referendum passes.

"If they don't do it, I'm leaving the state of Maryland," he said. "I'm taking all my mares and getting the hell out of here ... I love the state but they're ruining the industry."

Between stud fees starting at $1,500, $500 to $600 a month in vet bills, the price of hay and straw, and paying for grooms and other staff, it's easy to have $20,000 to $25,000 invested in a horse before it even starts racing, Marine said.

He said he doesn't want to race across the Potomac in Charles Town, but believes he has no choice because the purses there are twice the size.

If the horse industry collapses, it will take the supporting feed and tack industries with it, and lead to more development as farms go out of business.

"You're taking the history of Maryland away," he said.

Speaking to the Rotary Club, Barford wasn't swayed by appeals to save the racing industry.

"Unfortunately, horse racing is a dying business," Barford said. "To give them this piece of jewelry is totally unfair."