Despite Progress, Uncertainty Still Exists Over Maryland Slots

Despite the passage of slot-machine legislation by both chambers of the Maryland General Assembly, the headline in the Feb. 27 Baltimore Sun cautioned: "Slots' Future Still Uncertain."

That is precisely how the state's racing leaders view the politically charged battle being waged over slot machines even as the initiative has gotten farther along in Maryland than ever before. In 2003 and 2004, the Senate passed bills authorizing slots, but the bills died in a House of Delegates committee without ever coming to a vote on the House floor.

On Feb. 25, the House approved a slots bill by the narrowest possible margin: 71-66. Seventy-one is the number of votes required to pass a bill in the 141-member chamber.

Still, the euphoria with which Maryland's racing leaders were expected to greet a slots victory in Annapolis was nonexistent. They seemed almost shell-shocked by the nail-biting narrow margin of victory, the pitfalls that remain before the bill would become law, and a last-minute amendment that inflamed a long-simmering dispute between the Thoroughbred and Standardbred factions.

The House bill would authorize 9,500 slot machines at four locations and, based on strict limits placed upon locations, only one could be a racetrack. Laurel Park would be eligible to apply for one of the licenses, but it would not be assured of gaining it. Thirty percent of proceeds would go to the operator, and 3% would go into a fund for the first five years to be divided by all the state's tracks for capital improvements.

By contrast, the bill passed earlier by the Senate would place 15,500 slot machines at four tracks and three other locations to be determined. The tracks would likely be Laurel Park, Pimlico, Rosecroft Raceway (a harness track near Washington, D.C.), and a still-to-be-built track in Western Maryland. Thirty-six percent of proceeds would be retained by the slots operators.

"We've got two versions of a slots bill, and they need to be reconciled," said Alan Foreman, attorney for the Maryland Thoroughbred Horsemen's Association. "It's such a hot-button issue. Any number of issues could mean it's downfall. There's no way for anybody to feel one way or the other right now. There's a long way to go yet."

Because the House and Senate passed different versions of a slots bill, the normal legislative process calls for a committee of House and Senate leaders to broker a compromise bill. But House Speaker Michael E. Busch, who is opposed to slots, said he would not tolerate a single change to the House bill. Busch played the central role in blocking slots legislation the past two years.

Racing leaders fear that if any slots bill becomes law, then it will be the one less beneficial to racing, or at least to Thoroughbred racing. The House bill would provide up to $100 million per year to purses and state-bred funds.

However, it would divide that money 70% to Thoroughbred racing and 30% to harness racing. Because of a last-minute intensive lobbying effort by the harness industry, those percentages were changed by the House Ways and Means Committee from 90% to Thoroughbreds and 10% to Standardbreds. That inflamed a deep-seated conflict between the two sides on how to share revenues. The harness side argues that 30% of the betting at the state's major tracks takes place at Rosecroft. The Thoroughbred side counters that, regardless of where it's bet, 90% of horse wagering in the state is on Thoroughbred racing.

"You're back to the same problem that's haunted the industry for years: How to divide revenues," said Foreman, the Thoroughbred horsemen's attorney. "It's going to create another battle. It puts us again in the position of having to fight to get a larger share."

Rosecroft likely would get slots under the Senate bill. It would not get slots under the House bill, but it could receive about $20 million for purses, which Foreman described as "a windfall." This year, racing under a reduced schedule of 106 nights with $40,000 in purses per night, Rosecroft will award about $4.24 million in purses.

Under the House bill, the Thoroughbred industry would receive no more than $70 million per year for purses and bred funds. The thoroughbred horsemen and breeders had hoped for at least $90 million to remain competitive with neighboring states with slot machines (Delaware and West Virginia) or about to get them (Pennsylvania).

"Does it get the (Thoroughbred) industry where we want to be? No," said Billy Boniface, president of the Maryland Horse Breeders Association. "But that's better than where we were before. We never intended to live off slots revenue. We have to use slots to grow our business."