Jeff Hooke, a Chevy Chase-based investment banker, has done extensive research on the economic impact of the gaming industry in states that have legalized slots. His work has made him a regular testifying before legislatures around the country.
Hooke shared his analysis of both the upside and the downside of Gov. Martin O?Malley?s slots proposal, now before the Maryland General Assembly.
You?ve said publicly that many states have sold slot licenses for pittances, to the detriment of the taxpayers. How does the governor?s proposal stack up?
Traditionally in other states, slots licenses were given away or sold for a small fraction of their market value; in this bill, the opposite has occurred. The state?s cut is set so high, at 70 percent, that it?s hard to believe anyone who receives a license will receive a windfall profit.
You?ve also said that generally, minorities do not participate in gambling?s largesse, in terms of ownership.
Other than Native Americans, the participation and ownership of gaming is negligible for minorities in virtually every jurisdiction. … Their ownership of casinos and racinos [racetracks with slots or casinos] is basically zero.
What are the drawbacks of the slots bill as you see it?
The fact that a small percentage of people who go into casinos become addicts, and they have various social and financial problems that spill over and need to [be] addressed by the government.
The racetrack owners and horse owners are looking at $130 million in subsidies annually from the proceeds of gaming, a pretty high level of subsidy. They argue without a subsidy from slots, the industry would lose 5,000 jobs, so we?re looking at a yearly subsidy of roughly $25,000 per saved job.
