Slots Testimony Seen In A New Light

Written testimony submitted to the Maryland General Assembly this month by Penn National Gaming has become a better read in light of the Pennsylvania company's announcement this week that it was pulling out of a deal to buy Rosecroft Raceway, the struggling harness track in Prince George's County.

Company officials blamed the legislature's decision not to make the track eligible for a license to operate slot machines -- or video lottery terminals, in legislative parlance -- if voters approve a referendum next year. Two other exisiting horse racing tracks are eligible for, but not guaranteed, licenses under the bill that passed.

Here's what Eric Schippers, the vice president of public affairs and government relations, had to say about Rosecroft and slots in testimony submitted Nov. 2, during the first week of a special legislative session devoted to fixing the state budget:

"We have spent a great deal of time introducing ourselves to the Prince George's community, including members of our legislative delegation, county council, local business owners, leaders of local charities and civic organizations, and, of course, our more than 375 employees at Rosecroft. Penn National is taking a long-term perspective on Rosecroft, and we've reassured everyone we've met that our purchase agreement is not contingent on the approval of video lottery terminals (VLTs) at the track."

Another development in Maryland racing this week has prompted questions about the likelihood of Laurel Park in Anne Arundel County winning a slots license.

Maryland Jockey Club President Lou Raffetto Jr., who ran Laurel Park and Pimlico in Baltimore, was fired by Magna Entertainment, the Canadian racing conglomerate that owns the tracks. Raffetto was widely respected in Maryland, while leading lawmakers have openly questioned Magna's peformance operating slots at other venues in the country.

The bill that passed the legislature was written with Laurel in mind but is crafted in such a way that other companies could bid for a slots license in the area. The legislation makes operations within two miles of MD Route 295 eligible. A commission appointed by the governor and legislative leaders is tasked with picking the locations if the referendum passes.

By John Wagner |  November 30, 2007; 10:33 AM ET  | Category:  John Wagner
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I live in Chesapeake Beach where video gaming is already alive and well. A well known restaurant in Chesapeake Beach (owned by Mayor Gerald Donovan [D], no less) is basically a hotel/casino on the Bay. I say this with the best of intentions, so don't label me a racist but I've noticed that most of the slots patrons are black and travel from PG county or other areas to chase that ever-elusive jackpot, which saddens me because most are leaving as losers. The only winner is the house and Gerald Donovan. He is a shameful man and has changed the very fabric of the community by trying to turn the place into Atlantic City on the Bay.

If this initiative passes and Laurel gets its slots, then its that much easier to tax low income earners through slots. Appearing as if slots are needed to help bolster State services for low income earners and at the same time using slots to siphon-off their income is dishonest and inane. Is saving a few jobs at horse stables worth risking the social problems that come with slots? Not to me it isn't.

Posted by: CB Resident | December 1, 2007 4:31 PM

Maryland families earning more than $40,000 will pay more taxes under Gov. Martin O'Malley's tax plan that passed last week, according to a report released yesterday by the General Assembly's budget analysts.

The Department of Legislative Services report, the first in-depth look at what Marylanders will be paying after their taxes go up Jan. 1, indicates that households earning more than $40,000 will pay between $7 and $2,659 in additional taxes annually, depending on earnings.

Mr. O'Malley, a Democrat, signed into law last week a $1.4 billion tax increase designed to close the state's $1.5 billion budget shortfall and increase spending on higher education, health care, transportation and the Chesapeake Bay.

"We came together in a very short period of time, developed a comprehensive solution to the structural deficit while also protecting our investments -- transportation, higher education and the environment," said Rick Abbruzzese, a spokesman for Mr. O'Malley. "We did so in a way that is fair to working families of our state."

Mr. O'Malley said at the end of September that 83.5 percent of Marylanders would save money under his tax plan.

But he modified that estimate after legislators stripped a property tax cut and some income tax savings from his plan. Shortly before Mr. O'Malley signed the tax bills, he estimated that between 40 and 45 percent of Marylanders would save money.

The median household income last year in Maryland was $65,144, according to the U.S. Census Bureau. Census figures say that 62.4 percent of Maryland households make more than $50,000.

Analysts from the Comptroller of Maryland's office said at least 46 percent of Marylanders would save money under the O'Malley tax plan, after checking their estimates with the report released yesterday.

House Speaker Michael E. Busch, Anne Arundel Democrat, said during the special session that he expected most Marylanders to save money because of the personal income tax exemption the House included in the plan, which allows most Marylanders to exempt an additional $800 per dependent -- which would save taxpayers about $62 per person in their households.

Mr. Busch did not return a phone message yesterday.

Senate President Thomas V. Mike Miller Jr., Prince George's Democrat, was on vacation yesterday in Florida and was unavailable for comment.

The analysis did not account for some key tax increases passed by lawmakers last month, including a $1 increase in the tobacco tax and the expansion of the sales tax to computer services.

Republican leaders said it should not be surprising that taxpayers will pay more.

"I'm not surprised," said Senate Minority Leader David R. Brinkley, Frederick Republican. "It was a poorly crafted session, it was a poorly crafted process, it was a poorly crafted plan and, like anything else, taxpayers pay for it."

Lawmakers approved the wide-ranging tax plan during the three-week special session, which concluded last Monday.

The sales tax will increase a penny, from 5 percent to 6 percent, the car-titling tax will increase by 20 percent and the income tax on high-wage earners will increase from 4.75 percent to 5.75 percent. The corporate income tax also will increase from 7 percent to 8.25 percent, and lawmakers also approved a measure that would ask voters whether to legalize up to 15,000 slot machines at sites in Baltimore and Allegany, Anne Arundel, Cecil and Worcester counties.

Posted by: Anonymous | December 1, 2007 11:32 PM

none of these discussions matter on where slots will go. martin o'malley has already been bought and in the pocket of guys like rickman. he's a marionette (martinette?) singing their tune and dancing to their music. maryland has been the victim of fraud--the fraudster's name is martin o'malley

Posted by: doesn't matter.... | December 2, 2007 9:09 PM

While Penn National Gaming's agreement to acquire Rosecroft was not conditioned on passage of VLTs, what this Legislation did was create an uneven playing field by providing some racetracks an opportunity to generate new revenues from VLTs and closing the door to others, including Rosecroft and Pimlico -- thus creating two separate classes of "haves" vs. "have nots" among the racetracks in the State.

With VLTs in operation at Laurel Park or Ocean Downs, much of Rosecroft's existing customer base is likely to shift to those facilities offering newer and broader amenities and higher quality racing fueled by VLT revenues.

This was a very difficult decision for Penn National and one that we did not take likely. We feel for the Rosecroft employees and horsemen who've been denied the opportunity to revitalize the historic track through the revenues from VLTs.

Penn National lobbied very hard for Rosecroft's inclusion in the bill, given it has long been projected to be the single highest revenue producing location for VLTs in Maryland. However, we found very few legislators willing to listen to our projections of $540 million in new tax revenues to the State from VLTs at Rosecroft, as opposed to the projected $700 million for the five locations in the bill combined. We also commissioned a poll showing overwhelming local support for VLTs at Rosecroft - as much as 62% in those neighborhoods closest to the track - this, too, unfortunately fell largely on deaf ears.

Posted by: Eric Schippers | December 3, 2007 12:24 PM

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