Updated on 09/16/2011 8:48AM

Visions of VLT's dance in their heads


WASHINGTON - Maryland's racing industry has been beset by so much adversity in recent years that horsemen, breeders, track employees, and fans can scarcely believe that they are on the brink of astounding good fortune.

When Robert Ehrlich Jr. made a strong stretch run to defeat Kathleen Kennedy Townsend in the gubernatorial race, he gave the sport hope for salvation. Ehrlich is an unequivocal advocate of legalizing slot machines - or video lottery terminals - and installing them at the state's racetracks. If his plan becomes reality, the impact on Laurel, Pimlico, and Rosecroft will be profound. It may seem a fantastic notion, but Maryland's Thoroughbred tracks could be offering the biggest purses in the nation.

The issue of slot machines has loomed over Maryland racing for years. While the state's tracks have had plenty of problems of their own making, they were dealt a double whammy by the legalization of slots in two neighboring states. As revenue from the machines resuscitated Delaware Park and Charles Town, it lured Maryland-based horses to run for bigger purses at those tracks. Charles Town's competition has wrecked the quality of the lower-level claiming and maiden races at Laurel and Pimlico that used to be those tracks' bread and butter.

Although many Maryland political leaders supported slots, and public opinion polls favored them, too, Gov. Parris N. Glendening staggered and hurt the racing industry with his declaration, "No slots, no casinos, no exceptions." Townsend shared his opposition, while Ehrlich advocated the devices as a partial remedy for the state's huge budget deficit.

Even slot-machine opponents concede that the machines are powerful revenue-generating devices. If little Charles Town can produce more than $4 million a week in revenue with its 2,500 machines, what could Maryland do with them?

Before the election, an Ehrlich spokesman gave the Baltimore Sun a rough outline of Ehrlich's vision for slots. If 15,000 machines generated $300 apiece in profits per day (a reasonable premise, based on other states' results), they would produce about $1.6 billion a year in revenue. The state would impose a 50 percent tax, getting $800 million a year for its coffers. This is a larger bite than most other states take, but the remaining 50 percent still constitutes a large economic pie to be divided.

West Virginia allots 14 percent of slot revenue to go to racetrack purses; in Delaware and other states the figure is 10 percent. Because Ehrlich has always been a supporter of the state's horse industry, and many politicians back it strongly, they are not likely to shortchange horsemen and breeders. Even if only 10 percent of slot revenues went to purses, and even if the Thoroughbreds were getting a share from "only" $1 billion a year, that would mean an annual increase of $100 million into purses at Laurel and Pimlico.

Purse money at these tracks now totals about $40 million a year. After the infusion of slot money, multiply the current purse structure by a factor of 3.5. Maryland's purses could even exceed those in New York, California, and Kentucky. This is not an absurd vision. Until now, most of the tracks that have installed slots were moribund operations needing the machines for survival - Charles Town, Delaware, Prairie Meadows in Iowa, Sunland Park in New Mexico, and others. So far, no major U.S. racing state has employed slots to transform an already-viable operation into a national powerhouse. Inevitably, it will happen somewhere - and it is most likely to happen in Kentucky or Maryland, where the Thoroughbred industry is important enough to have solid political support.

Any bill that Ehrlich proposes will be the object of intense infighting in Annapolis. Anti-slot legislators will try to stop the measure, of course, but they appear to be in the minority. Many of the leaders in the legislature are pro-slot, but they are also Democrats working for the first time with a Republican governor, and they might not want to let Ehrlich get the state out of its budget mess with a politically palatable solution such as slots. Some Democrats have already advocated putting off the legalization of slots by saying that the issue should be put to a statewide referendum in 2004.

Until the slot question is resolved, the Maryland tracks are going to be in a state of near paralysis. When Magna Entertainment Corp. purchased Laurel and Pimlico, it promised major improvements to the physical facilities. But it can't plan before knowing if each track will need a massive expansion to accommodate all the new slot machines.

This is nothing new, of course. The state's racing industry has been paralyzed for years because of Glendening's intransigence on slots. But with a pro-slot governor bound for Annapolis, Maryland racing could be about to enter a bright new era.

(c) 2002, The Washington Post