03/07/2003 12:00AM

New slots plan takes some heat


Gov. Robert Ehrlich's revised proposal for slots at racetracks in Maryland was sharply criticized by members of the Maryland legislature on Thursday, according to reports in the Baltimore Sun and the Washington Post.

The governor's proposal, which would nearly double the amount of money given to tracks compared with Ehrlich's initial plan, was criticized on several fronts - from revenue splits to the way the report was released. In response, some legislators called for a one-year moratorium on any discussion of legalizing slots.

At the same time, Maryland Jockey Club president Joe De Francis said in a telephone interview on Friday that racetrack interests played no part in shaping the new proposal. De Francis supported Ehrlich's gubernatorial campaign last year, and one racing official said yesterday that critics of the new plan would seize on the racing-friendly language to draw a link between De Francis and Ehrlich.

"That is utterly ridiculous," De Francis said on Friday. "The governor's proposal has the lowest share of any racetrack-slots operation in the country, and the notion that I had any special influence with the governor is complete and total nonsense."

The slots proposal would give racetracks in the state a 23 percent cut from slots revenues to pay for expenses while the state would take 5 percent to pay for the machines. Tracks would then get 26 percent of what is left over, or approximately 46 percent of the total revenues from slots.

The state's education fund would get approximately 44 percent of the revenues from slots. Many legislators reacted strongly to the idea that schools would get less than tracks.

"I came in ready to vote for slots," said Sen. Paula C. Hollinger, a Baltimore County Democrat, quoted in the Sun. "There's nothing left in there for people like me to vote for."

Sen. Nathaniel J. McFadden, who was characterized as a slots supporter by the Sun, also said that he wouldn't support the revised plan.

"The only reason I considered this bill was the number in there for public education," McFadden said. "These numbers are now below my threshold."

Jim McAlpine, president and chief executive of Magna Entertainment Corp., which purchased majority shares in the Maryland Jockey Club's two tracks late last year, said that Ehrlich "beat us down" with the racetrack splits in the new plan. But he said that the revised proposal would make slots at tracks profitable, in contrast to Ehrlich's earlier proposal.

"You have to get a return," McAlpine told the Sun. "You can't just throw capital at the wall and not worry about getting any return on it."

The new proposal would allow 3,500 slots at Pimlico, Laurel and Rosecroft Raceway. Each track would have to pay a $40 million licensing fee for the right to open the slots parlors, compared with a $100 million fee in Ehrlich's earlier proposal.

Ehrlich's new plan was unveiled at 9 o'clock on Wednesday night, and many legislators who were briefed about the revenue splits said they felt the had been misled by the governor's staff, the Sun and Post said.

"I thought at the time they negotiated a pretty good deal, but obviously I didn't have the accurate numbers," House Speaker Michael Busch told the Sun. Busch said he now supports a one-year moratorium on any slots legislation.