01/28/2004 12:00AM

An alternate slant on slots

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A report issued on Tuesday by a committee in the Maryland House called for the state to own its own casinos and criticized any state policy that would award the licenses to racetracks only.

The report, which was largely fashioned by House Speaker Michael Busch, an opponent of racetrack slots, called for the slot machines to be owned and operated by the Maryland Stadium Authority. Management of the casinos would be put up for competitive bidding.

The report does not specifically endorse slots, but offers the plan as a blueprint if the legislature approves a bill this year legalizing the machines. Last year in Maryland, efforts to pass slots legislation failed largely because of Busch's opposition to grant monopoly licenses to racetracks, a plan favored by Gov. Robert Ehrlich.

Monday, Ehrlich offered a compromise plan that would legalize a total of 11,500 slots at four racetracks and also allow for the construction of two casinos along I-95, the state's major highway. The licenses for the two casinos, which would operate 4,000 slots in total, would be put up for competitive bid and be overseen by a committee appointed by the governor.

In comments Tuesday published by the Baltimore Sun, Busch said he opposed Ehrlich's new plan because it did not fully address the state's budget deficit. Busch has said that he believes the state must raise taxes to resolve the state's budget shortfall.

Debate over the past 18 months among Maryland legislators has focused on whether racetracks should be beneficiaries of slots legislation. Movement on the issue since the defeat of the legislation last year has swung toward giving the racing industry a smaller slice of revenues from slots while expanding slots licenses beyond racing facilities.

The House committee report recommended that the horse racing industry be a minor factor in determining how the state should set up casinos. The report said that the "relationship between video lottery gaming and horse racing is tenuous at best." However, the report did recommend the use of slots revenues from state casinos to enrich purses at racetracks.

The Maryland racing industry has argued that the state's racetracks are suffering because of competition from neighboring states where slot machines are legal at racetracks, including West Virginia and Delaware. Tracks in those states have been able to afford double-digit increases in purses since being authorized to operate slot machines.