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UM prof's slots analysis: Bill gives tracks too much

March 28, 2003

When Maryland's horse track owners took the position that the proposed bill to legalize slot machines would give them barely enough revenue to make a profit, we were skeptical.

Now a University of Maryland economics professor has done an analysis that backs our view. And so once again we say: If the tracks aren't ready to accept less, the state should seek proposals from other would-be operators.

The study comes from Robert Carpenter, economics professor at the university's Baltimore County campus. His analysis says the state senate version of the slots bill would give the tracks $649 million more than they need to build new facilities to house thousands of slot machines.

And Carpenter said the upfront application fee of $15 million that the bill would charge to three Central Maryland tracks is way too low.

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Ken Shea, a representative for the track owners' investment banking company, disagreed with Carpenter's analysis. Shea told the Associated Press that the proposed split - 39 percent for track owners - is the lowest of any state except New York.

Is the senate's proposal to give track owners $600 million per year too stingy? Not from where we sit, given the fact that slots won't be like lottery tickets, available at every convenience store. Under this bill, to play slots, people will have to go to the race tracks.

Have other states given track owners a better deal? Yes, but that doesn't mean Maryland has to follow their example. When push comes to shove, track owners will take less and still make millions.

The best argument for pushing them to take less is that every dollar that goes to education through this proposal is one that won't have to come from tax revenues, or from cuts in other programs. Lawmakers' first concern should be Maryland's schoolchildren, not those who will operate slot machines for a profit.

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