December 23, 2009

Slots at the Mall

Our view: Anyone who wants to help the horse racing industry – or keep taxes low in Anne Arundel County - should oppose the petition to block slots at Arundel Mills

Although the horse racing industry has convinced itself otherwise, it stands to be a major beneficiary of the decision by the Anne Arundel County Council to approve slot machine gambling at Arundel Mills Mall.

The racing industry was singled out among all other industries and causes in the state to receive a share of the state’s slot machine gambling revenue for purse enhancements, horse-breeding funds and capital improvements for the tracks. The racing industry’s share is 9.5 percent of the gross proceeds from slots - that’s more than local governments are getting - up to $140 million a year. That means the horse industry has a major incentive to see slots succeed and to have them in locations that will make as much money as possible. With 4,750 machines and what could be one of the most lucrative slots locations in the nation, Arundel Mills stands to give the industry nearly $50 million a year when it’s fully operational.

Racetrack workers and their allies have argued in recent days that having slots at Arundel Mills would be less beneficial to the industry than having them at Laurel Park. But that argument fails to consider a few key facts.

First, the 9.5 percent of revenues goes to the racing industry no matter where the slots are located. Putting slots at the racetrack doesn’t guarantee that the owner of the track/slots parlor would actually pour any more money into racing than he or she would if slots were somewhere else. In fact, at other racinos in the area, racing is a distinctly secondary concern to the big moneymaking end of the operation, slots.

Second, the council’s vote to allow slots at Arundel Mills was the last hurdle the project had to overcome. The developer, the Cordish Cos., has its license from the state, and it has the capital to move forward immediately. For slots to wind up at Laurel, the state commission would have to reject the Cordish bid and open up a new set of bids. Then someone would have to make a successful bid for slots at Laurel, a possibility complicated by the fact that the track’s current owner is in bankruptcy and the facility is now being auctioned. It’s not like Laurel was the fallback plan if Arundel Mills was defeated.

The real threat to horse racing and the county at this point is the effort by neighbors of the mall to petition the council’s zoning vote to a referendum. If they succeed, all progress on the casino - and all possibility of money flowing into state, county and horse racing coffers - would be put on hold for nearly a year until the 2010 election. People who sign the petition should know that they are probably endorsing an eventual tax increase in Anne Arundel County, and possibly in the state. For that reason, rather than a petition drive to overturn the zoning law, we’d rather see Cordish open a temporary facility to produce some revenue for the state during construction.

Anyone who’s serious about helping horse racing - or keeping taxes down in Anne Arundel County - has got to look at the odds and conclude that opposing the petition is the best bet.

That may be a hard position to take, but there was at least a glimpse of such pragmatic thinking at the council on Monday night. Councilman James Benoit has long opposed slots in the county altogether, and he was expected to be a sure “no” vote on the Arundel Mills proposal.

However, before that bill could come to a vote, one that would allow zoning for slots at Laurel Park (if, somehow, that ever becomes a possibility) passed. Mr. Benoit then decided to vote for the Arundel Mills bill. Since he failed in his effort to keep slots out of the county, he chose to support what he felt was the better option for having them. That’s the kind of practicality that’s been all too lacking in the Anne Arundel slot debate, and he is to be commended for it.