Committee cuts tracks' share of slots revenues

March 19, 2003

ANNAPOLIS - The Senate Budget and Taxation Committee rewrote Gov. Robert Ehrlich's slot machine bill Tuesday to reduce the amount of money going to track owners and to set aside more money for public schools.

The bill that was approved on an 11-2 vote would provide about $700 million a year for public schools when all 10,500 machines are in operation at Laurel, Pimlico and Rosecroft racetracks. Track owners would get $594.8 million.

The committee also set aside about $90.7 million for horse owners and breeders and about $72 million to help local governments where tracks are located deal with traffic congestion and other problems that would come with an expansion of legalized gambling.

The committee action substantially reduced the share of the proceeds that would be kept by track owners. The governor had proposed giving them 43.6 percent of the take from the slot machines, about $665 million. The new version of the bill would reduce the share to 39 percent.

The revenues set aside for education would increase from 42.1 percent to 48.2 percent, an increase of $59.3 million a year.

Joseph DeFrancis, president and CEO of the Maryland Jockey Club, which operates racing at Laurel and Pimlico racetracks, was present as the committee worked on the bill. Asked afterward what he thought of the changes and the reduced amount of money for track owners, he replied: "No comment."

Track owners had testified earlier that they needed more revenue than they would get under the governor's bill to cover their operating costs, pay for new facilities and still make a profit. They said with tight management they could make the numbers work, but that it would be close.

Racing industry lobbyists repeatedly pointed out that revenues set aside for track owners even in the governor's bill were lower than any other state that allows slot machine gambling at racetracks.

Henry Fawell, a spokesman for Ehrlich, said it was too early to say whether the new numbers will be acceptable to the governor or the racing industry.

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