Gambling proponents typically overstate the amount of revenue that lotteries and casinos will generate for state treasuries. But the numbers rarely fall as far short of the mark as they have in Maryland.
After years of legislative fighting, Maryland voters handily approved a referendum last fall to allow slot machines in a fixed number of locations around the state. Supporters confidently promised that as many as 15,000 machines would soon generate upwards of $600 million annually for the state and its schools.
But it's turning out that very few of the expected vendors are interested in installing or operating anywhere near that number of machines. The state's timing was awful, with the recession having dampened gambling expansions all around the country. Maryland's problems are compounded by the fact that the state's share of the take--67 percent--is exceptionally high.
As a result, there just aren't that many bids on the table. Governor Martin O'Malley's budget for the coming fiscal year assumed revenue of $90 million in licensing fees alone, but the state clearly isn't going to get that. Two of the six applicants for slot machines refused to pay the fees. That disqualified their bids--including one from the owners of the Laurel Park race track, which was expected to be a prime slot machine site. Referendum supporters had said that slots would help save horse racing in Maryland and that placing slot machines at tracks, where gamblers already congregate, would answer safety and traffic concerns.
Instead, the leading bid came from a company looking to build a $1 billion gambling and entertainment complex right next to a big shopping mall called Arundel Mills. This will require a local zoning change, which not surprisingly triggered a great deal of community opposition. An expected $30 million share in the proceeds, however, may prove irresistible to a county looking at a $150 million shortfall. "When faced with a dire budget deficit," says Anne Arundel County Executive John Leopold, "that's an amount of money we can't take lightly."
The fact that 70 percent of the potential revenue from slots turned on a local council vote caused legislators to consider changing the bidding process or otherwise altering the rules in an attempt to jump-start interest. But any changes at this point would only reopen a nearly 15-year-old fight and further delay the flow of revenues, however much reduced.