If voters opt to allow slot machines in Maryland, prospective operators are unlikely to make a mint of money. Governor Martin O’Malley proposes a 70% gaming tax rate that would leave operators 30% of gross gaming revenue from which to pay workers, build and maintain a slots facility. So far two racetracks have been named as possible slots locations – Laurel Park (4,250 machines) and Ocean Downs (3,250 machines) – and three other sites in Maryland suggested. These are in or near Baltimore (3,500 machines), Cecil County (2,500 machines) and Rocky Gap in Allegany County (1,500 machines).

Over half the estimated US$1.5 billion in annual revenue would go into an education trust fund and the horseracing industry would get US$128 million a year to increase purses, refurbish tracks and provide a breeding fund. Operators would get the remaining sum of around US$451 million between them, a figure about half of the amount being made by the five slots facilities operating in Pennsylvania.

As the O’Malley plan has identified specific sites, analysts believe that competitive bids for slots licences are unlikely to materialise, meaning less potential state revenue. Investment is also likely to be limited by the narrow profit margin, leading to mostly local play with bigger players travelling to Delaware or West Virginia for better facilities and more promotions. The Governor’s slots proposal for Maryland calls for gaming machines to be bought or leased through the state lottery, with a limit of 15,000. (E-11.01.07)

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