Opponents of the slots referendum on the November ballot again are claiming the estimated $1.3 billion revenue is “unattainable and ridiculous,” especially since it is $500 million more than a 2002 estimate.
But the legislature’s top fiscal adviser who supervised preparation of both sets of numbers said the current estimates “are in the reasonable zone” since legislative analysts know a lot more about the industry after studying it for five years.
Aaron Meisner, chairman of Stop Slots Maryland, said, “The revenue estimates are significantly overstated, and this is largely political” to make slot machine gambling more palatable to voters.
Meisner contrasts the numbers produced for a 2002 commission on the state’s finances said slots would generate $800 million based on 10,000 machines that would each take in $219 per day from bettors. Now, the legislature’s fiscal analysts say that 15,000 machines will generate $1.361 billion in 2013 — about $249 a day per machine.
The 2002 commission was headed by former state budget chief Fred Puddester, the same man whom Gov. Martin O’Malley tapped to chair the pro-slots coalition trying to win passage of the constitutional amendment in November.
“This math simply cannot work,” said Meisner. He refers to the earlier numbers as “Puddester’s work” but in fact both estimates were produced by nonpartisan staff at the Department of Legislative Services. Slot machine gambling was one of many revenue options and got only two brief paragraphs in the commission report.
The 2002 estimate was done “before we had specific proposals to evaluate and was illustrative,” said Warren Deschenaux, the legislature’s fiscal chief.
Over the years,his department did more analysis as Republican Gov. Robert Ehrlich made slot revenues the core of his budget plans, Deschenaux said. In 2004, seven fiscal analysts produced a 158-page handbook for legislators on “video lottery terminals,” as slots are technically known, and he hopes his staff will update the report this year.
“We’ve refined our methods,” Deschenaux said. “I feel pretty good about the numbers we have. We also have a lot more experience” with the industry in other states and “the economy has grown.”
Anti-slots lobbyist Minor Carter said, “Even Moody’s [Investor Service] doesn’t believe they’re going to make their numbers.”
A Feb. 22 bond rating by Moody’s refers briefly to the estimates, calling them “levels that may be overly optimistic.”
