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Non-track slots plan gains in Maryland

Aug 26, 2003 7:35 AM

Maryland seemed on the road to joining other mid-Atlantic states earlier this year in permitting their racetracks to transform themselves into racinos with the addition of slot machines. After all, revenues from these facilities would help meet the state’s budgetary shortfalls. And, the measure would have the support of newly elected Gov. Robert Ehrlich.

But then, Magna Entertainment Corp. (MECA) stepped in to acquire the state’s biggest tracks, Pimlico (home of the Triple Crown’s Preakness) and Laurel, as well as the training facility at Bowie. Initially, the move was hailed by Joe De Francis’ critics.

De Francis and his sister, Karin, inherited the Maryland Jockey Club from their father, Frank, who was credited with a major turnaround for Maryland racing. But Joe De Francis’ operating style has been the subject of major criticism.

When the terms of the sale were announced, leaving a strong minority position in the hands of the De Francis family, many politicos soured on the racino proposal, suggesting that Joe and Karin would share several millions of dollars because of the way the legislation was written.

Led by House Speaker Michael E. Busch, the legislation was derailed with a study committee left to determine the value of expanded gaming. Findings indicated the state would benefit more if the slots were placed at facilities away from the tracks.

Busch looked northward to see that the New York Racing Association (NYRA) had contracted with MGM MIRAGE Inc. (MGG) to erect a building at Aqueduct and operate the facility that would have 4,500 video lottery machines with the state getting about 60% of the revenues. He liked the idea.

Last week, Busch unveiled his plan to have the Maryland Lottery Commission own the machines and install them at the Maryland State Fairgrounds in Timonium with the state raking in most of the revenues. The plan, though premature, was well received by a number of politicos.

Even Gov. Ehrlich felt the approach was beneficial. He said he felt Timonium "is the wrong location for a facility like this" and that the program should at least benefit horse racing. But he was encouraged that Busch had at least found some benefits to a slots program whereas during the recent debate Busch had taken a position opposing all such programs.

As for the results of recent study by the University of Maryland, the suggestions were negative towards track operations. A study leader suggested the legislature should consider eliminating racetracks from the slot proposal in order to maximize the state’s financial return on the expanded gambling.