Legislators should be kicking themselves for not passing slots in the special session. With each passing day the chances of the state pocketing up to an estimated $800 million per year from them are looking more like those of winning the lottery.
Gambling revenue is down across the country, and major projects are being halted in the country?s gambling mecca, Las Vegas. And earlier this week casino operator Tropicana Entertainment LLC filed for bankruptcy. This comes on the heels of the Federal Reserve announcing survey results showing banks are tightening lending standards across every single loan category.
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Into this environment slots will be born in Maryland in November ? if voters decide they want them.
If slots pass, they do not come without startup costs. The 15,000 machines need major gambling operators to build entertainment centers for them at the five designated locations ? which requires cash or credit, both of which are in short supply around the nation. And once operational, they need to subsidize the horse industry, minority business investment, the lottery, local government and education, a task made more difficult by the fact that the state prohibits casinos, which drive investment in destination resorts.
These issues are no reason to prohibit slots. But they should make legislators cancel grand spending plans based on revenue estimates made during boom times.
How ironic would it be if instead of supporting the state?s economy, overestimated slots revenues created a larger “structural” deficit?
