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February 23, 2010

Slots continue to provide slapstick, not revenue

More amateur slapstick from Maryland's snakebit attempt to license and build slots parlors. Not only can't Canadian developer Michael Moldenhauer come up with $19.5 million in earnest money for a Baltimore slots license; he can't/won't pay the vendors who worked on the project. As Scott Calvert reports in today's Sun, folks who worked for Moldenhauer's Baltimore City Entertainment Group have claimed $771,000 of a $3 million deposit Moldenhauer made for work they performed but said they weren't paid for.

Those dunning Moldenhauer include PR queen Sandy Hillman and strategic consultant Michael Cryor, who dropped out of the project last month, telling the Sun's Annie Linskey: "A contentious appeal is not the relationship I want to have with my city and state." Especially if he's not getting paid!

Add to this delays for the Arundel Mills slots operation, the pratfalls of the De Francis family, the bankruptcy of the parent of Laurel Park and Pimilco racetracks and you have set up a casting call for Abott & Costello.

Posted by Jay Hancock at 9:12 AM | | Comments (17)
Categories: Slots
        

Comments

Had the Dem dominated legislatue not been so foolish about stopping anything Ehrlich wanted to do when he was pushing slots, the revenue stream from slots would be flowing. Why isn't the IrishBoy or his cronies getting out there and making this slots thing work? After all, wasn't slots revenue supposed to save the state from finnancial ruin?

Maryland used to allow slot machines. If the machines used then had the modern electronics available today and making monitoring of their proper use less problematic... we very likely would have continued to have them. Perhaps not in as many types of stores as then (like my family once had in Lex. Park) but they would have remained legal.

The lesson in this weak attempt at allegory is that Maryland is a small time state with small time tastes and despite the pretensions of so many in those fine suits (who won't play slots in any case) there isn't any desire for these parlors. None.

All we want is a machine or two in the places we already go for entertainment, an occasional (or even regular) Casino Night at the local fire hall and if we're to expand things beyond what has been proven to work... a poker or dice room added to those same places we already go wold be just wonderful.

No more than that is needed. Or even desired.

Once again it has to be pointed out that if Mike Miller and Michael Busch would have been statemen and not politicians 5 years ago, we would already be up and running with slots! By the time we get anything going, most of the benefit will have been lost due to the effectiveness of the surrounding states. We are in this dilemma because they weren't going to give Erhlich the credit and then came the financial crisis.

The Legislature's greed and incompetence is to blame for the fiasco. They want to claim such a high percentage of revenue that the gambling corporations who know what they are doing, dont want any part of Maryland's slots. So we get these shady companies who will do things on the cheap and we'll get a poor product. If the state had put it's percentage in line with other states, maybe we would get a Harrah's or Wynn in here. I still think Maryland should go all in on table games, but cater to the wealthy DC crowd who would rather drive to Baltimore than AC. It would add tourist and gambling revenue for Baltimore.

IF the Pols here ever made any trips to see How other States set up their operations, they must've come back thinking "Gee they're letting too much Money get away from them!" As a result the Pols here set up rules and stipulations that kept most ALL of the "Evil Corporations" who actually know what they're doing like MGM/Mirage, Harrah's, Boyd Gaming and Las Vegas Sands from even thinking about coming to MD.

As a result you have these smaller entities that can't raise the Financing with the little return that the State will allow.

MD gets what they deserve when they want it All!

BMac (and other parlor supporters)...

Had the legislation (and construction) been done as promptly and fully as you seem to wish what would we have today that is so wonderful?

I say we would have an overlarge facility (maybe even two!) dying on the vine because locals had better sense than to patronize them and travelers continued to bypass... but again clamoring in State Circle for expansion of their licenses to save their failing operations. and probably for some development cash too.

On the whole, I'd say we were well served by the unintended consequences of the mistakenly conceived intransigence affectionately called the Mike and Bobby show.

The question remaining is what to do NOW. I've made my views known on that point several times.

Annapolis at its finest!
Refusing to pass slots so Ehrlich could not receive credit and then abdicaticating their responsibilities by having the voters decide via referendum.
I present 2010's Three Stooges-
Busch, Miller and OMalley.
Thank you gentlemen.
Now lets vote all three of them out of office.

I just don't get it. I'm not politically savvy, nor do I claim to be super knowledgable about all of this, but isn't this about helping the state and the horse racing industry???
I watch as other states run
rings around us, and we can even lay 1 brick to a building anywhere. I'm so disappointed. I'm resolved to the fact we'll never get slots here. All this in fighting and back-biting has done nothing but make the State of MD look like a joke. Why doesn't the governor step in and make some command decisions?
Slots...yes or no. But them in X spot and X spot no if nad or buts. They know where they belong. Build em and lets move on. Time has been wasted. In fact, it may already be to late.
Why is it that the taxpayers and the ones who want slots are now subject to watching the jesters we voted for act impotently!!?? Oh well...when you have a mayor who steals from the people and various other criminals, why should I expect anything else...

If stupidity can get you into a mess, then why can't it get you out?

Mr Rational

1. I am not a Parlor supporter.

2. The legislation from the Governor was something that could have been compromised on, built upon.

3. Instead, since it came from an "R" it was not dealt with, it was considered dead on arrival.

4. This is not what legislators are supposed to do, they are supposed to work for the good of all their constituents and keep close tabs on the desires of their constituents.

Dear citizens and government officials of the State of Maryland,

This issue goes far beyond the incompetence and the irresponsibility of the lottery commission. The tip of the iceburg shell we say...

The incompetence runs ramped through the Maryland lottery commission, the state legislature and the governor continues to cost the citizens of Maryland millions of dollars.

There is no mistake about it the members of the lottery commission are the governor's cronies; they couldn't manage my nephew to the bathroom without a map and detailed instructions.

How much is the governor, Mike Miller and Michael Busch an the lottery commission getting under the table? Don't get mad boys - just asking....

O! By the way you are paid too much for what you do...

Remember if it looks like a duck - walks like a duck - quacks like a duck - it's probably a raccoon... Isn't a raccoon an animal with a mask???

Citizens of Maryland - can you say corruption?

When will the legislature and the governor realize that they are not playing with monopoly money but the money extorted from the hard working citizens of Maryland.

As long as greed over shadows common sense and far play - the citizens of Maryland will continue to suffer.

Remember Maryland - This legislature and this governor is responsible for the greatest tax increase in modern times.

I just thought you should know - they ain't finished yet.

Taxation without representation is what the citizens of Maryland have today. You get what you pay for don't you citizen???

This government answers not to the citizens of Maryland but to the special interests that got them elected.

The citizens of Maryland must take every legal means at their disposal to extricate these individuals from power.

"You must tear them out as you would a malignant growth and cast them from the surface of the earth." (Mister Roberts)

I advocate the peaceful (did you hear me Maryland) the PEACEFUL and CONSTITUTIONAL over through of this irresponsible and corrupt government.

This is one citizen's opinion -what's yours??????????????????

It's not polite to say "I told you so." Really.

Brak, originally, yes, it was about helping the horse racing industry, the schools and whoever else had friends in Annapolis. The horse racing industry shot itself in the foot by embarrassing then Governor Glendening by making illegal campaign contributions. The DeFrancis family - who ran Maryland racing - then backed the wrong horse [Ehrlich] in the gubernatorial race. Ehrlich officially won that race, but in effect was disqualified and placed out of the money. The DeFrancis family became personae not gratis in Annapolis and essentially non-starters in the slots race. Thus, with the Busch-Miller juggernaut running the show and blocking everything Ehrlich wanted to do, the Maryland horse racing industry took a seat in the grandstand.

Mr. Rational:

You make a good point. All that was necessary to gets slots up and running was to pass a simple law saying slots are now legal and subject to an X% tax. Local governments could have decided on the zoning issues, and business owners could make the decision as to whether they wanted to run slots or not.

Instead, we got the legislature trying to engineer a whole new state-run sector of the economy. They wanted to decide where the slots were placed (and ram it down the throat of local governments), dictate how much money the slots operators had to spend on building facilities (handout to unions), even dictate who was hired to work at these slots palaces (handouts to unions and minorities).

Now (surprise, surprise) it looks like Marty's Five Year Plan isn't going to hit its quotas. Just another failed experiment in command-and-control economics.

Partisan hacks...

They were both wrong; each in their own way. Continued bickering about that won't change or correct anything. Move on.

The truth is that we are LUCKY that (for varying reasons) neither the R or the D approach has actually achieved the construction of the overlarge sucker machine parlors.

Which all brings us back to the real Q's: 1) what do we do now to keep Maryland residents from going elsewhere to gamble
and 2) is it reasonable to believe we can draw *significant* volume from other states away from where they presently go to gamble (if we ever could).
3) for travelers and tourists coming to MD for other purposes... just how much more gambling capacity than we might provide for our own citizens is required to meet that need.

My thoughts:
1) add card games in appropriate venues
2) no. a waste of time and money to try.
3) not very much and certainly not new overlarge structures to house them.

This is a vile, regressive business, and no government of thinking people should participate in it.

Dear Lars Peterson,

You stated: "This is a vile, regressive business, and no government of thinking people should participate in it."

Are you saying that the government of Maryland is a "vile, regressive business" or are you saying that gambling is a "vile, regressive business"?

I am not certain what you consider more vile - government or gambling.

The government MUST be involved in gambling. Remember - Its only illegal if the government does not get a piece of the action.

The state and federal government regularly exercises in legalized extortion.


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About Jay Hancock
Jay Hancock has been a financial columnist for The Baltimore Sun since 2001. He has also been The Baltimore Sun's diplomatic correspondent in Washington and its chief economics writer. Before moving to Baltimore in 1994 he worked for The Virginian-Pilot of Norfolk and The Daily Press of Newport News.

His columns appear Tuesdays and Sundays.
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