Nonprofits criticize Maryland slots plan

Gretchen Parker

Thursday, Aug. 14, 2003 | 9:15 a.m.

ANNAPOLIS, Md. -- The Ehrlich administration slot-machine bill killed by state lawmakers would be one of the least profitable paths for the state to take if it decides to expand gambling, according to a study released Wednesday by two nonprofit groups.

The Ehrlich proposal would generate an estimated $1.18 billion a year, compared to $1.6 billion if slots licenses are given to the highest bidder, the study found.

The study was conducted by the Maryland Tax Education Foundation, a taxpayers' group, and The Maryland Public Policy Institute, a nonpartisan research organization.

"We don't advocate for or against slots. We're just trying to put out the economics of it," said study co-author Thomas Firey, a senior fellow at the Maryland Public Policy Institute and managing editor of a journal published by the Cato Institute, a libertarian Washington think tank.

The report studied six possible scenarios for legalizing slots, including the Ehrlich proposal that was passed by the Senate but killed by the House of Delegates in April.

The Ehrlich plan would have limited slot machines to racetracks and would have let track owners keep 39 percent of the money lost by gamblers. The study put that plan at the bottom of the list of six proposals.

A proposal the authors described as "more sophisticated" would make more money for the state by letting bidders compete for slots licenses and letting them put slots in areas outside of racetracks. Licenses would go to bidders who agreed to accept the smallest share of revenue from the slots. Researchers predicted the slots owners would take 21.5 percent of revenue.