Updated on 09/17/2011 10:46AM

Slots in Maryland not about greed


WASHINGTON - Maryland's horse industry has been in need of help for years, and people in the sport have long dreamed that the help might come from the installation of slot machines at the state's tracks. Plenty of outsiders - including important politicians - thought this was a worthy idea, too.

But since Robert L. Ehrlich Jr. (R) was elected governor and the legalization of slots became likely, the debate over the issue has been recast. Accounts in the media have depicted it as an exercise in avarice, as greedy track owners, greedy politicians, and greedy special interests all vie for a piece of a gigantic windfall. Senate President Thomas V. Mike Miller Jr. (D) told The Washington Post's Craig Whitlock: "People are starting to see dollar signs. . . . The greed is turning [lawmakers] off rapidly."

To be sure, nobody in this state has much sympathy for track owners. Joe De Francis, president of the Maryland Jockey Club, has frequently been a lightning rod for controversy. He has operated the Maryland tracks during their years of decline and recently sold a majority interest to Magna Entertainment Corporation, a deal that guaranteed him and his sister, Karin, an extra jackpot if slots were legalized. Reports of this provision sparked complaints that slot money was going to benefit a few individuals rather than the overall interests of the state.

Even though the distinction seems to have been lost lately, "greedy track owners" are not synonymous with the horse industry. Supporters of the industry can and should make a strong case that using slot revenue to help racing is sound public policy.

Neighboring states have concluded that it is a reasonable idea. Charles Town Race Track could not survive on its own merits, but it is an important enough institution and employer in Jefferson County, W. Va., that voters approved slots for it. Delaware Park couldn't survive either, but the state decided it was worthwhile to keep Delaware alive with slot revenue.

In Delaware and West Virginia, the horse business is not especially important. In Maryland, it is. A state study found that the horse business has nearly a $3 billion per year impact on Maryland's economy. More than 200,000 acres are devoted to equine purposes, and that green space makes the breeding business almost sacrosanct to people who care about the environment. Horse racing's importance is not only economic. Pimlico and the Preakness are as much a part of the state's identity as crab cakes and Camden Yards. Except for Louisville, no American city is so closely associated with a horse race as is Baltimore.

Because of the importance of the horse industry, political leaders have been worried for years about the sport's declining health. Some lay most of the blame on De Francis, but many of racing's woes stem from a problem he couldn't control, but the politicians can. Competition from Delaware and West Virginia has hurt Maryland badly, because the high, slot-fueled purses in those states have lured runners away from Laurel and Pimlico. With fields smaller and competition weaker, most Maryland bettors prefer to play out-of-state simulcasts than the live product. Maryland's competitive position is going to deteriorate even further when slots go into Pennsylvania's tracks.

By allotting a percentage of slot money to purses, Maryland will not only cure many of its racing ills but will also restore the sport to a position of national prominence. Even using conservative estimates of revenue, slot money could put purses for many races in Maryland on a par with those in California, New York, and Kentucky. The industry's requests for purse subsidies have been quite restrained. When the track owners last week made their recommendations for the allocation of slot money, they proposed a sliding scale that works out to 6.2 percent if slot revenues are $1 billion in a year. By contrast West Virginia puts 14 percent of revenue into purses and Delaware 10 percent.

"We think this is a better approach than being seen as another greedy party," said Tom Bowman, president of the Maryland Horse Breeders' Association. His members aren't looking for a handout. The state's breeders are committed to the sport and most have been resilient enough to withstand bad times in the past; but they know that they can't succeed if prospective horse owners can't run for reasonable purses.

Magna Entertainment is committed to the sport, too. Its president, Frank Stronach, believes in horse racing as a viable entertainment product; any doubts about his devotion to the game should have been erased when he spent $80 million to build a spectacular training center for horses who race at Gulfstream Park. Stronach has always seemed indifferent to the promise of slot machines. But even he has little or no chance to revive racing in Maryland if purses are inferior to those in neighboring states. It is regrettable that the debate in Annapolis has been sidetracked by talk of greedy track owners when the relevant question is whether to revive horse racing in the state or let it wither.

(c) 2003 The Washington Post