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Slot Machines

Sad, Sad Shills for Slots

by: Eric Luedtke

Mon Sep 15, 2008 at 08:49 PM EDT

If you go over to Politicker, you'll see the new web ad that For Maryland, For Our Future put up. Whose name, by the way, was co-opted by some public relations hack from the Sierra Club's long time slogan, "For our families, for our future." Though as branding goes, the fact that Fred Puddester gets the name of the organization wrong in the video (he calls it 'The Campaign for Maryland's Future) is bad enough. One of two things is happening, as well, either A. My internet connection is running really slow, or B. FMFOF posted their video in VERY high resolution, which would certainly be stupid, because it keeps pausing every second or so to load the video.

In the course of the ad, they promise that passing slots will lead to the following: no new taxes, invest $700 million into schools (not mentioning that this would not be new spending), stop all cuts to public safety and health care, and continue to pay for the tuition freeze at Maryland universities. They also say that not passing it will lead to increased class sizes and layoffs of teachers.

In other words, passing it will give us everything we could ever want. Ever. And if we don't pass it, all government will collapse and we will be thrust into a second dark age from which humanity may never recover. So vote for slots. Or else.

Or maybe I could have just said that I think it's over the top.

Discuss :: (0 Comments)

The State of the Slots Debate

by: Eric Luedtke

Sun Sep 14, 2008 at 09:38 AM EDT

The Sun has a good piece on the slots debate heating up. We had a long lull, but now that we're past Labor Day things are going to be moving pretty quickly. The most interesting part of the article, for me, was this:

"I'm a proponent in a major, active way," O'Malley said during a radio appearance last week, explaining his stance on slots. But he added: "I will not demagogue on it. I don't believe, as some have said in the past, that the only way to fund essential government services is through gambling. I don't subscribe to that."But O'Malley, whose job approval rating bounced from a low of 37 percent in March to 45 percent this month in the Gonzales poll, faces a dilemma over whether to become the face of the pro-slots movement.

If the slots measure loses, the failure could be seen as a midterm election loss.

Slots are a lot more popular among Republicans than among Democrats and Independents. In other words, the referendum could easily become an albatross around O'Malley's neck, both in a primary and in a general, the former because angry Democratic voters could revolt and the latter because they could decide that volunteering isn't worth it, handing the race to a Republican Party on the positive end of an enthusiasm gap.

One very smart politician I talk to once told me that he thinks of the Democratic base in Maryland in terms of three groups:

- Dedicated Democrats: white middle to upper class dems mostly west of 95

- Demographic Democrats: black and latino voters, concentrated in Prince George's County, Baltimore City, and a strip of eastern Montgomery

- Dundalk Democrats: white working class voters mostly east of 95

According to his theory, O'Malley feels confident about the first two groups. He doesn't think middle and upper class progressives or the black communities will ever leave the party, so he focuses on the Dundalk Democrats. According to my politician firned: "We are now living under the Dundalk principle. We can only do things that play in Dundalk."

Unfortunately for O'Malley, this is a pretty myopic view. You've got to keep all portions of the base happy, and slots is an issue that deeply divides them. And what's more, on slots, O'Malley is on the wrong side of the enthusiasm gap. It's exactly those dedicated dems, many of them staunchly progressive, and the black church-going voters who most hate the idea of bringing gambling parlors to Maryland. And they're a lot more passionate about the issue than those who like the idea of slots.  

On the other hand, O'Malley's pretty strongly associated with slots. So perhaps ratcheting up that association won't really change much in voters minds. How do I know? If you looked closely at the cross-tabs from the Gonzales Poll, you saw something really interesting. Both Democrats (48-44) and Republicans (53-38) support the referendum, but Independents oppose it by a 14% margin. There are only two reasons I can think of the Damocrats support it despite the more reasoned and reasonable opposition of independents - either the fear-mongering about service cuts has worked or, more likely from my perspective, there are a lot of Democrats who don't feel strongly either way and are simply following O'Malley's leadership. So not only do I think O'Malley is tied to this thing, but I think his association with it is the major thing keeping the referendum afloat right now.

But, form a purely political perspective, there are really four options here for O'Malley at this point:

A. O'Malley supports slots more strongly, and they pass, in which case he gets slots but has still alienated big chunks of his base.

B. O'Malley supports slots more strongly, and they fail, in which case he both alienates his base and looks ineffective.

C. O'Malley backs off on slots, and they fail, in which case the base isn't so annoyed at him but Mike Miller and pro-slots Democrats are.

D. O'Malley backs off on slots, and they pass, in which case Mike Miller may still be annoyed at him, but the base is happier and pro-slots Dems got what they wanted anyway.

I guess you could also make a couple options for whether O'Malley gets the lion's share of blame for the referendum's passage or failure. But that's getting a little complex for a Sunday morning. As to the four options above, though, it seems to me like a fairly obvious choice. Backing off the issue some reduces the political risks considerably. But, then, I'm biased. 

Discuss :: (1 Comments)

Court Changes Slots Referendum Language

by: Eric Luedtke

Thu Sep 11, 2008 at 05:31 PM EDT

A three-judge panel in Anne Arundel County has agreed with slots opponents that the language of the slots referendum is biased. But the only change they want made is to add one word: primarily. As in, slots will primarily benefit education. Of course, their new recommendation doesn't mention that money from the referendum also goes to pay for services for gambling addicts. Because that would reflect badly on the one-armed bandits.
Discuss :: (1 Comments)

New Gonzales Poll: O'Malley Up, Slots Down (Updated)

by: Isaac Smith

Tue Sep 09, 2008 at 04:21 PM EDT

Gov. O'Malley's approval ratings are up to 45%, up 8 points over the last Gonzales poll in March. Why? Beats me, but I'll throw out two possibilities:

  1. Public disapproval of O'Malley because of the sales tax increase is dissipating. The initial hike caused many people to grumble, but now people aren't so upset about it. Compared with the uptick in inflation generally, and in oil prices in particular, the sales tax increase may barely register anymore. On the other hand, O'Malley's uptick in approval may be because of:
  2. The partial deflation in oil prices over the past month or so. The decline, while likely temporary, probably is making people more comfortable about their economic situation, and thus perhaps causing people to view their elected officials in a more favorable light. But this is all speculative, and would have to be compared with approval ratings for other politicians, not just O'Malley.

The poll also shows that support for the slots referendum has dipped to 49%, with 43 against. Compare this to January, when 54% were in favor and only 38 against. And I see Eric beat me to the punch.

UPDATE: Via Sen. Rich Madaleno, the full poll and methodology can be viewed here.

UPDATE 2: Ezra Klein's post discussing the inverse correlation between a state's size and its governor's approval rating is also apropos. Maryland, as a comparatively mid-sized state, turns out to be in the middle of the pack.

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Support for Slots Referendum Dropping

by: Eric Luedtke

Tue Sep 09, 2008 at 04:10 PM EDT

The long, hard wait for more Gonzales polling is over. Gonzales Research has just released its most recent Maryland Media Poll, and it looks like the slots referendum isn't doing well. According to the polling, 49% of Marylanders now say they support the referendum, and 43% oppose. That's a 10 point swing from January, when the margin was 54-38. Marylanders United to Stop Slots wasted no time in using the poll, sending out a blast e-mail. Quote of the day:

Pollsters note that widely known and debated referendums polling under 50% are on life support.

To my list of quibbles with Marylanders United over small annoyances, the fact that they quoted the Fox News of newspapers, the Washington Times, in their e-mail is obnoxious. But I'm willing to let it pass, because this is very good news for slots opponents. 10 points in two months is doable.

Update: Other news from the Gonzales poll...

- O'Malley's approval rating is rebounding. Essentially, his approval/disapproval reversed from 37-48 in March to 45-35 now (Isaac caught this before me). It's still under 50%, which puts him in tenuous territory for re-election, but the rebounding numbers may scare off some potential Republican challengers. And some Democratic ones as well.

- Meanwhile, Bush's approval rating has dropped to a spectacularly low 23%. You could probably get 23% to agree that the moon is made of cheese, so we're now pretty deep into 'worst President ever' territory.

- A whopping 42% of Marylanders ranked the economy as the biggest challenge facing Maryland. It's impressive to see that much agreement. Second place was taxes, at 12, followed closely by education.

- Obama continues his solid lead in Maryland, taking John McCain 52-38 if the election were held today. No surprise. Just more confirmation that this is a blue state. The polling window includes Obama's convention bounce, but not McCain's, and it could therefore be argued that it overestimates Obama's lead. However, the Gonzales polling matches the composite almost exactly.In any case, we're not a swing state, so the only ads we'll catch are targetted at Virginia and Pennsylvania.

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Slots Ballot Language Announced

by: Eric Luedtke

Mon Aug 18, 2008 at 07:25 PM EDT

Here's the language:

Authorizing video lottery terminals (slot machines) to fund education

Authorizes the state to issue up to five video lottery licenses for the purpose of raising revenue for education of children in public schools, prekindergarten through grade 12, public school construction and improvements, and construction of capital projects at community colleges and higher education institutions. No more than a total number of 15,000 video lottery terminals may be authorized in the State, and only one license may be issued for each specified location in Anne Arundel, Cecil, Worcester, and Allegany Counties and Baltimore City. Any additional forms or expansion of commercial gaming in Maryland is prohibited, unless approved by a voter referendum.

And, as was feared, the language is biased. Rather than simply saying the referendum will legalize slot machine gambling, it ties legalization to education funding. The fact is that any slots money going to education won't be new money, but rather money to meet existing commitments, but the language is worded to suggest to people that it will be more funding for schools. Further, it doesn't mention the money going to horse racing purses or to help gambling addicts, the latter of which would certainly raise the issue of gambling addiction among voters. This needs to go to court, so a judge can impose some neutrality on McDonough.

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Slots Opponents Considering Lawsuit

by: Eric Luedtke

Thu Aug 14, 2008 at 08:39 PM EDT

From the Sun:

Slots opponents said Thursday that they are contemplating a lawsuit to contest the wording of a November referendum on whether to allow the establishment of 15,000 slot machines at five sites across the state.

Whether McDonough is biased on the issue or not, the reasonable assumption that he is corrupts the process. Referenda should be worded as neutrally as possible, and that may mean that in the future it is necessary to create a non-partisan panel, perhaps made up of judges or some other relatively neutral party, to craft the language in these questions. In the meantime, McDonough should have recused himself and, in the absence of that, the lawsuit is a good idea if the language is not neutrally worded.

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Anti-Slots Rhetoric Gets Nasty

by: Eric Luedtke

Thu Aug 07, 2008 at 05:25 PM EDT

This hit my inbox today from Marylanders United to Stop Slots:

Next week, the Maryland Association of Counties (MACO) will be meeting in Ocean City to pat itself on the back for helping to enact the largest tax increase in state history, and amend our Constitution to legalize slot machines - providing a multi-million dollar giveaway to gambling executives.

This backroom deal, crafted by MACO and Annapolis insiders, will do nothing to solve our budget problems or help Maryland families struggling to make ends meet. In fact, this tax increase and slots package was approved just as we were heading into a recession, gases prices were going sky high and thousands of Marylanders were facing foreclosure!

You just can't trust Annapolis when it comes to slots and taxes. Slots are a bad idea for our communities and it is wrong for MACO's to push the pro-slots agenda.

Here's the thing: I'm happy to see groups like MACO called to account for their support of slots. But I'm absolutely puzzled that MUSS is using the tax issue as part of their rhetoric. Or maybe puzzled isn't the word. If all you look at is stopping slots, than tying the slots referendum to tax increases, and to the currently unpopular leadership in Annapolis, is probably a good tactical move.

But strategically, it's a disaster. If the tax package hadn't passed, there would have been massive cuts in services. Some of the groups that advocate for those services are supporting slots. Some aren't. Some haven't made up their mind. Rhetoric like this alienates all those groups. And while tying this to taxes may appeal to a certain extent among the broader electorate, the people who get e-mails like this one are more likely to be politically active, and therefore more likely to have had a stake in the budget debate during the special session. Further, the premise of the e-mail, that people should contact their local county councilmembers about slots, is undermined by the vitriol directed at MACO. Remember that MACO is made up of those same counties those councilmembers help lead. And you catch more flies with honey than vinegar.

In other words, rhetoric like this is going to alienate as many people as it's going to convince among the activists who will bear the burden of fighting the slots battle on the ground. Not a good move. Not at all. Full text of the e-mail below the fold.

There's More... :: (2 Comments, 373 words in story)

The Baltimore Sun States the Blindingly Obvious

by: Eric Luedtke

Sun Jul 20, 2008 at 09:34 AM EDT

In a triumph of investigative reporting that will stand through the ages, the Baltimore Sun has discovered that there are rich people who oppose the slots referendum. Wow. Who woulda thunk it? Who knew that there are people with wealth who are religious, or progressive, or both?

Seems like this is a ridiculous attempt to counteract one of the greatest criticisms of the pro-slots forces, that they get funding from those who stand to directly benefit from the legalization of slots. Of course, we've seen over the last few weeks as both sides have waged a public relations battle over whether either side will accept campaign contributions from gambling interests, but that doesn't prevent companies like Penn National who want to own one of the slots parlors from waging an independent expenditure campaign. And people tend to be a lot more willing to spend money to support something that helps them financially than to oppose something they happen to dislike. Hence:

According to the National Institute of Money in State Politics, the 2006 election cycle saw ballot measures in five states concerning gambling issues: Ohio, South Dakota, Arkansas, Nebraska and Rhode Island. Pro-gambling committees in those states raised nearly $47 million, compared with $7 million by the opposing committees. Gambling-related enterprises with a direct stake in the measures provided almost 90 percent of the contributions; in Rhode Island, casino companies engaged in a turf war over a proposed constitutional amendment that would have allowed a Native American tribe to open a resort casino.

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Hot Slots Mess

by: Isaac Smith

Mon Apr 28, 2008 at 10:51 PM EDT

Marc Fisher:

Put Peter Franchot up against Martin O'Malley in a statewide vote and there can be little doubt that the pesky comptroller from Takoma Park would face a rough time against Maryland's charming governor, even if O'Malley's popularity numbers have drooped to Bush levels.

That's why the governor is only too happy to let this fall's showdown over slot machines be portrayed as an epic face-off between the two Democratic rivals. That's also why Franchot -- the highest state official to stand up against slots and someone who would love to be governor someday -- is simultaneously putting himself out there as the public face of the anti-slots campaign and trying to argue that it's not all about him.

"We want very much for this to be a big tent," says Aaron Meisner, a Baltimore stockbroker and chairman of Stop Slots Maryland, one of several groups in the splintered anti-slots campaign. "But the political reality is there is antagonism between the governor and the comptroller. Lots of people who are strong supporters of the governor but aren't strong supporters of Peter Franchot want to be involved but are holding back. It does create a challenge."

Fuel for the Franchot haters, no doubt; although even if Franchot weren't leading the charge against slots, I doubt the anti-slots coalition would be in better shape. After the special session and the recently concluded regular session of the General Assembly, slots are one of the few options left for filling the state's projected budget deficits. Even though there are many problems with legalized slots, the lack of a clear alternative weakens the anti-slots case.

At the same time, the ostensibly pro-slots forces aren't doing so well either:

But the state's track owners say they might not open their checkbooks because there's no guarantee that they would win the slots licenses envisioned in Maryland's plan. Because the legislation doesn't specifically name Laurel Park, its owner, Magna Entertainment, which also owns Pimlico in Baltimore, is holding back.

"I may be monopolizing the market on wishful thinking here, but there's no evidence that the big gambling companies are ramping up for this campaign," Meisner says.

It's kind of amusing how tissue-thin the horse race industry's support for the slots referendum is. The question is, do the anti-slots activists have enough momentum to bust through it?

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Like Godzilla vs. Mothra, Only Not

by: Isaac Smith

Fri Apr 18, 2008 at 07:13 PM EDT

This may come as much of a shock to you as it did to me, but did you know that... Martin O'Malley and Peter Franchot don't like each other much?

Maryland's battle over legalizing slot machine gambling sharply escalated yesterday, with Gov. Martin O'Malley attacking Comptroller Peter Franchot as a hypocrite shortly before Franchot helped kick off a campaign to defeat a November referendum on the issue.

O'Malley (D), who is counting on slots revenue to balance the state budget in future years, pointed to Franchot's past support of slots as recently as 2001 while a member of the House of Delegates.

"The comptroller has had the wonderful luxury of sitting back and doing nothing to help us restore fiscal responsibility while throwing stones in a hypocritical way," O'Malley told reporters. "He's not at all ever troubled by his inherent contradictions, and he never saw two sides of an issue that he couldn't be simultaneously in favor of."

Franchot, of course, returned the favor:

Franchot yesterday urged Marylanders not to buy arguments from O'Malley and others who have suggested that additional budget cuts or tax increases might be needed if the referendum fails.

"Consider the source," Franchot said at the campaign kickoff. "This fact is indisputable: The same folks who are pushing slots just passed through the largest tax increase in state history."

The problem for Franchot's anti-slots campaign is that, as Adam points out, he doesn't really have a counterargument to the idea of slots as a revenue source. Whatever you think of slots, the fact is that it will raise money, money that will need to come from somewhere else -- either new taxes or further reduced spending -- if the state budget is to be kept in balance. Franchot and other anti-slots activists need to come up with a viable alternative to slots if they're going to win the day on the slots referendum.

Also, as the above article indicates, the slots debate threatens to turn into a cage match between Franchot and O'Malley -- which of course will bring up the perennial media hobby of speculating whether Franchot will try to challenge O'Malley in the 2010 Democratic primary. I find it hard to believe that Franchot would try to do that, so I don't welcome the coming media circus.

Discuss :: (2 Comments)

A Final Word on MSTA, and the Nature of Blogging

by: Eric Luedtke

Wed Mar 19, 2008 at 07:41 PM EDT

I want to clarify, for what I hope will be the last time, my comments on MSTA. And this has served for me as a reminder of one of the inherent problems of being a part-time blogger. I sometimes over-reach. In conversations over the last few days, I've come to believe that I was wrong in my assertions about the motivations of the MSTA Board for the decision they made. They did spend a lot of time thinking through the issue, and the decision was made in the end because there was a belief that slots will help deal with the budget problems and ensure continued funding for public schools. They're wrong. But I think the decision was made in good faith. And it was unfair of me to suggest otherwise. 

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Blackmail Wins

by: Eric Luedtke

Sat Mar 15, 2008 at 01:33 PM EDT

It seems Mike Miller's blackmail scheme to get the Maryland State Teachers Association on board with the slots referendum has worked.

From the statement of MSTA President Clara Floyd:

Thanks to Thornton funding, we are making clear progress in raising student achievement across the state. Our greatest moral responsibility is to continue this progress by ensuring that educators and schools have the resources they need to give every child access to great public schools.

Bringing up morality in the context of a vote to support increased gambling is sure to raise some hackles.

There's division within MSTA over slots in general, and if the MSTA Board had allowed this issue to be debated at the spring Representative Assembly, it would have had a good chance of happening anyway. But what the Board has done here in caving to Miller's blackmail is cut their members out of the debate, and in doing so have probably angered many of them. Adam at MPW thinks ire about this may be directed at Senate President Mike Miller, but I think it more likely to be directed at the leadership of MSTA. Only time will tell.

In any case, the pro-slots crowd has another big argument in their favor now. Slots help kids. Even the teachers think so. And Clara Floyd and the MSTA board are now right out there in front shilling for the big gambling companies.

Clarification: Given a couple of e-mails I've received, I think I need to clarify my point in this posting. While I vehemently oppose slots, I think that in the end I am probably among the minority of MSTA members. Remember that the membership of MSTA does not include Baltimore City, which is likely to include many slots opponents, because the city teachers are represented by the AFT instead of the NEA.

So my point was not that Miller had blackmailed teachers into supporting slots, because there are enough out there who buy the fairy tale that slots will solve the problems of public school funding. What I do think is that Miller's threats forced the MSTA Board to act now. There is no other real reason for them to do so. The referendum is still 8 months away, and the Board could have just as easily put the question to the membership in the MSTA election we just had or put the question to the spring Representative Assembly. But they chose not to. I believe that to be undemocratic. And I can't see any reason for it besides fear of Mike Miller.

And in re: Roadblock, who in the comments made the point that this is just the way politics works. You're right, of course. And when I get angry about these things people often accuse me of being naive. But it's a sad, sad thing that this sort of extortive politics is what passes for public debate in Maryland. We should expect better of our government. 

Discuss :: (8 Comments)

Holding Teachers Hostage to Slots

by: Eric Luedtke

Wed Mar 12, 2008 at 07:07 PM EDT

Senate President Mike Miller is no stranger to hardball politics. That's been his style for a long time, and one reason why he's kept such a tight hold over the Senate. So I can't say I was surprised to hear that he's using hardball tactics to build support for the slots referendum this fall.

And one of the groups he has his eye on is the Maryland State Teachers Association (MSTA), whose 60,000-some members could lend both serious political support and a powerful rhetorical advantage to the pro-slots campaign. (full disclosure: I'm an MSTA member and on the Board of its local Montgomery County affiliate, MCEA) My impression is that MSTA members, like pretty much every randomly selected group in the state, are thoroughly split over the referendum. And all things being equal, I'd suspect that the association would stay neutral on the referendum, at least until its spring representative assembly when the issue would likely be the subject of a serious floor fight. 

But all things aren't equal. The MSTA's top two priorities this session of the general assembly are preventing budget backsliding on teachers and public schools, and passing a bill to create an independent labor relations board. The former is important to maintain the recent success of Maryland schools who have been buoyed by Thornton funding. The latter is important because the State Board of Education is the current final arbiter in contract disputes, effectively giving the management of our management final say over disputes between workers and management.

So what? Well, SB 850, which would establish the Labor Relations Board, is sitting in the Senate Rules Committee. If Senator Miller so chooses, it could sit there the rest of the session. And on the issue of state funding for teachers, the persistent rumors that the Senate is interested in dishing off the costs of educator pensions onto the counties, which would ravage the budgets of local school systems, are still floating around Annapolis. In other words, Senator Miller has bargaining chips, and it's not much of a stretch to say he's willing to hold the priorities of teachers hostage to his own slots crusade.

It's yet another example of the cut-throat backroom politics that has soured a lot of Marylanders on Annapolis. And it belies the argument that this slots referendum is about putting the question to the people. For MSTA, at least, the choice is between being forced into support for slots without a real democratic debate among members, or losing on important legislative priorities.

Discuss :: (1 Comments)

A Brief History of Legalized Gambling

by: Isaac Smith

Tue Mar 11, 2008 at 12:48 AM EDT

The American Prospect has a good article on the use of legalized gambling to plug holes in state budget deficits over the last few decades, going back to the initial push to establish state lotteries in the '60s and '70s. Much of it is old hat for anyone who's been following the slot machine debate in Maryland, but it has a few new gems. One thing worth highlighting is the argument that, as far as revenue sources go, gambling and regular sales taxes are often in direct competitition with each other:

Since most people have a limited amount of disposable income, money spent at casinos would otherwise buy taxable items or be used at restaurants and stores. A fiscal analyst for Indiana's legislature looked at 19 years' worth of multi-state data and concluded that eight of 12 states lost sales tax revenues when large-scale commercial casinos opened. States could offset this loss by having sufficiently high wagering taxes on casinos, but only four of the eight did.

As you can probably guess, the piece is negative: The supposed economic benefits of gambling rarely exceed the costs, in the form of increased crime, dealing with compulsive gamblers, and the potential corrupting influence of the casino industry. Still, whether you're for or against the slots referendum, give it a read.

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by: Isaac Smith

Wed Jan 30, 2008 at 11:34 AM EST

Kenny Burns, on delayed school funding for Prince George's County: 

I have to ask if the Democrats in the General Assembly would not have been so bitterly partisan, we would of had the slot money to fill that nearly $3 million.

As I recall, the chief proponent of slots in the General Assembly was and is Democrat Mike Miller. I also found it curious that the Maryland GOP suddenly became opposed to slots, after years of supporting it, when a Democrat became Governor again. Sounds an awful lot like partisanship to me.

Note: I had dashed off an earlier post criticizing Kenny's post above, then deleted it after realizing I had misread it after hitting the 'save' button. My bad, Kenny.

Discuss :: (1 Comments)

The Big Con

by: Isaac Smith

Wed Jan 23, 2008 at 01:52 PM EST

Brian Morton explains the logic of slot machines:

I still could be right (although at this point, I doubt it), but let's just say the people of Maryland do vote in favor of slot machines via referendum this fall--then what? The horse-racing industry is going to cry anyway, because people who go to the tracks won't be going for racing any more than they did before slots. Plus, track owners wouldn't have a reason anymore to avoid sprucing up the dingy rest-home atmosphere that is the hallmark of any racetrack--spending money rather than raking it in for free isn't in their business plan.

That's really what gambling is: a license to make money for free. For every winner, there are buttloads of losers, and all slot machines do is expand the natural base of losers by an order of magnitude. In the meantime, the winners, having had a taste of the money, will wait a season and then begin crying poorhouse all over again in order to get casino gambling, which is where the real money is.

This is the high-stakes version of the old con called "putting the mark on the send." The mark gets a taste of victory, and he sees that he can get a whole lot more if he wagers more. So he has to run home and get more money to put up in order to beat the bank. Except in the end it's a con, and the mark ends up losing everything.

In this case, the gambler (or the mark) is the racetracks. Except it's not their money they're playing with in the end; it's ours. Supposing slots pass, mark my words: Just as in any other state, it won't be long before they turn around and start pushing for full casino gambling, using the same arguments they made for slot machines. Hell, the same arguments they made for Pick 3 and Lotto and Keno and then MegaMillions. The tracks need saving. The horse industry is dying. The revenues coming in aren't enough. We could get more money with casinos. Yadda yadda.

Read the whole thing, as they say. There is something depressing about the way the slots issue is currently playing out: As Chris Hayes noted a while back, we live in an era in which the connection in the public mind between taxes and government spending is abstract, if not non-existent; thus even in states like Maryland, a large number of political elites -- Democratic and Republican -- have convinced themselves that legalized gambling, with a hefty payout to the racing industry to boot, is a healthy way to fund public programs. I'm not an anti-slots absolutist, but one hardly needs a vivid imagination to see how the current slots proposals could corrupt the political process.

Discuss :: (3 Comments)

Franchot's Speech

by: Isaac Smith

Mon Jan 21, 2008 at 12:10 AM EST

Having read the Comptroller's State of the Treasury report from Friday, it seems to be a pretty good diagnosis of the current economic trends affecting the state and the country, along with a good deal of trumpeting of his efforts to collect unpaid taxes (Franchot critics, take note), some potshots at Martin O'Malley and the General Assembly, and some anti-slots boilerplate. The collapse of the housing market is, of course, driving the current economic downturn, but the hastily-assembled special session on the budget last November may not help matters for Maryland:

I am particularly troubled by the expansion of the Maryland sales tax to computer services.  I spoke out in public opposition to this proposal when it was rammed through during the closing days of the Special Session, and I feel the same way today.  This technology tax, if allowed to stand, will erode Maryland’s competitive advantage in the Knowledge-based economy.  
The computer services tax will take a disproportionate toll on those small and independently-owned businesses that are the backbone of strong communities.  Furthermore, the way in which it was adopted will inevitably diminish Maryland’s hard-earned reputation as a good place to do business.  It is in this spirit of concern that I call upon my friends in the General Assembly and the Governor to repeal the computer services tax, and call upon each of you in this room to join me in this effort. The last thing we need is another tax increase, especially one that will undermine our Knowledge-based economy and damage our long-term economic success.

It is, of course, widely acknowledged that Mike Miller and company chose the computer services taxes for basically, no good reason, so I hope the General Assembly revisits the matter. The problem is, Franchot doesn't propose any replacement sources of revenue, or what he would cut from the budget, if necessary; likewise with slot machines. (And I presume even improved tax collection wouldn't be the entire answer.) Anti-slots advocates, and opponents of draconian budget cuts generally, need to be clearer about what the alternatives are to the fiscal status quo, which right now favors slots. There are plenty of possibilities, some of which Eric discussed a while back; but the problem is, Marylanders are already sore about the sales tax increase, any attempts to change marginal income tax rates are likely to run into opposition from Montgomery County again, and hardly anyone has an appetite for more budget cutting. Consequently, despite all the problems involved with slots, it's going to look a lot more appealing as we head toward the referendum in November.

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New Polling on Slots

by: Eric Luedtke

Tue Jan 15, 2008 at 05:07 PM EST

With all the polls that have been coming out recently, I feel like I have percentages and methodologies coming out of my ears. But this one's interesting. Gonzales Research just released new numbers in their January 2008 Maryland Poll. It echoes what we know from the Sun poll, that O'Malley took an approval beating during the special session, and that Marylanders strongly disapprove of the regressive increase in the sales tax. But the slots responses are a bit of a surprise - it seems the approval/disapproval gap is shrinking.

The last time Gonzales polled the slots question, back in Ocotber, the poll showed 59% approval and 35% disapproval. The new poll shows 54% approval and 38% approval. So if the November election were today, Marylanders would probably approve slots. But we've got 9 months, and those approval numbers seem to be dropping fairly rapidly towards that essential 50% mark. The polling memo also notes:

Typically on these types of ballot questions support at the beginning is at or is approaching its peak, while opposition tends to grow throughout the campaign...

This is, to say the least, encouraging. In earlier postings, I'd theorized that an ailing economy would push voters towards support for slots to maintain government programs, and I still think that's true in general. But the economy has only gotten worse since October, and yet the numbers have decreased. So it seems perceptions of the state of the economy may have less influence then I'd thought.  

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What to Do with Slots Money?

by: Isaac Smith

Tue Jan 08, 2008 at 11:21 AM EST

The Washington Post had a pretty good editorial over the weekend asking the question: If Maryland does adopt slot machines this November, where is all the money going to go? The Post makes the case for considering the needs of Chesapeake Bay watermen before the needs of horse farms and race tracks:

The contrast is apt and could not be sharper. The watermen, who have made their living for generations from oysters, crabs and fishing, are as storied a subculture as the state's horse breeders, owners, trainers and track owners. The Chesapeake Bay blue crab is about as synonymous with Maryland as the Preakness or Pimlico and is probably enjoyed by a larger slice of the state's population. In its heyday a quarter-century ago, Maryland's seafood harvest accounted for at least as big a chunk of the state's economy as the horse-racing industry does today, according to Douglas Lipton, a resource economist at the University of Maryland. Yet it is the horse-racing sector that would be treated to a massive state-sponsored bailout if voters approve the ballot question. The watermen, meanwhile, are left to the mercies of the marketplace.

Two thoughts:

  • It's not clear to me why watermen should be the beneficiary of slots revenue more than any other sector of the economy, but the Post is right to note that the racing industry doesn't need the money. It's certainly not clear that slots would save horse racing in Maryland.
  • Drawing more attention to the plight of watermen (and waterwomen) has a great deal of potential for getting the public on board for tough Bay restoration measures, and it's something Bay advocates should do more of. The old "jobs vs. the environment" dichotomy is a false one, especially in this case: I fail to see how letting the Bay become more and more uninhabitable is good for the economy.
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