Dooming Slots?

The O’Malley administration can’t even propose slots without messing things up:

Maryland slot machine operators will pay one of the nation’s highest casino tax rates – effectively 70 percent – if voters approve Gov. Martin O’Malley’s plan to legalize the devices, and some industry analysts say that would mean low-end facilities catering mostly to the local population.

“It’s going to limit how much you can give away to customers because the margin is so thin, and it will limit how much you can invest in the enterprise,” said Lawrence Klatzkin, a gambling industry analyst and managing director of Jefferies Equity Research.

The margin is so tight, Klatzkin said, that Maryland would end up with “a lower-cost product with much more limited offerings” than slots casinos in surrounding states provide to their patrons.

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“It doesn’t mean that they won’t make money,” Klatzkin said, “but some of the richer, higher-quality customers will likely go to Dover, Del., or to West Virginia for more comps and giveaways and much better amenities.”

And experts also note that the language probably artificially limits the places which slots could go:

Because O’Malley’s proposal identifies what appear to be some specific sites, it is unlikely to lead to competitive bids for slots licenses, Eadington said. That would mean less potential revenue to the state. “It’s written so only [certain people] are eligible to bid,” Eadington said. “I do not advise it as a useful form of public policy.”

All of this, of course, makes the proposal put forth by House Minority Leader Tony O’Donnell and Minority Whip Chris Shank much, much more sensible. The GOP proposal is much more likely to lead to competitive bidding and a larger pool of potential slot machine operators than the complicated, burdensome O’Malley plan.

In fact, considering all of the taxes, bureaucracy, and catches that the O’Malley bill puts on potential slot machine operators, I am invariably lead to this question: Does Governor O’Malley truly want slots, or does he merely want to put up a facade of supporting slots in order to justify massive tax increases?

Given O’Malley’s past description of slots as a “gambling gimmick” that preys on the poor, I think that it’s a fair question to ask…


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