- The Washington Times - Wednesday, August 15, 2007

ANNAPOLIS (AP) — Marylanders contributed about $150 million in taxes last year to Delaware and West Virginiaby playing slot machines in those states, according to a report released yesterday.

The amount represents about 10 percent of the state’s projected $1.5 billion shortfall, according to the report by Thomas Perez, Maryland’s secretary of the Department of Labor, Licensing and Regulation, which regulates the horse-racing industry.

“It’s important to acknowledge that in a very real sense, the slots horse is already out of the barn in Maryland,” Mr. Perez wrote in the conclusion of the report. “Tens of thousands of Marylanders are voting with their feet, and traveling to West Virginia and Delaware to play slots.”

The report also concluded Maryland either needs to legalize slot-machine gambling or use state money to help save horse racing, an important industry “in serious economic distress.”

By failing to legalize slot machines, Maryland “already has left hundreds of millions of dollars in potential general fund revenue on the table, and the tables are located in West Virginia and Delaware,” Mr. Perez wrote in the report he prepared for Gov. Martin O'Malley, a Democrat. “If we fail to identify a stable funding source, the industry will wither away in my judgment, and the economic consequences will be significant.”

Slot-machine gambling has produced contentious debate in the General Assembly for years, stalling every time.

Gov. Robert L. Ehrlich Jr., a Republican, made slots a centerpiece of his 2003-06 term, but was repeatedly defeated by the Democrat-controlled Assembly, particularly House Speaker Michael E. Busch, Anne Arundel Democrat.

Mr. Busch, who says he is not totally opposed to legalizing slot machines, has been wary about how many should be allowed, where they should be placed, how the proceeds would be disbursed and how the licensing agreements would be reached with companies that stand to benefit.

“I don’t think anyone wants to see any unjust enrichment,” he said yesterday afternoon, adding: “You’ve got to go through a thoughtful process with this.”

Mr. O'Malley has supported slots at race tracks since he was mayor of Baltimore, home of Pimlico Race Course and the Preakness Stakes, which is the second leg of the Triple Crown. He said after taking office in January that he would support slots on a limited basis but failed to present a slots proposal to help reduce the budget shortfall during his first Assembly session.

Senate President Thomas V. Mike Miller Jr., Southern Maryland Democrat, has supported slots. Last session, he introduced a bill that would have put more than 15,000 slot machines at seven locations across Maryland, including at four race tracks.

The report cites a University of Maryland study in 1999 that estimated the total economic impact of the racing industry in the state to be near $600 million and involve about 9,000 full-time jobs.

To write the report, Mr. Perez toured slots venues in neighboring states for a month. He talked to officials at race tracks and scanned parking lots for Maryland license plates.

“The conclusion is simple: Slots have simultaneously benefited the racing industries in these states and jeopardized the long-term viability of Maryland’s horse-racing and horse-breeding industry,” he wrote.

The report also states the horse-racing industry protects an important part of the state’s open space. Farms relating to horses account for 685,000 acres of land with a value of about $4 billion. The industry “provides an important buffer against sprawl development,” Mr. Perez wrote.

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