The truth behind ‘Question 2’

November 13, 2008 at 6:04 am Leave a comment

slot-machinesOther than voting for the next President of the United States, Question 2 was the hot topic on this year’s Maryland election ballot. Question 2 was to authorize the state to issue up to five video lottery licenses and no more than 15,000 slot machine units. The people of Maryland voiced their opinion and the establishment of slot machines within the state has been passed. Many people opposed Question 2 and continue to be angry with the final outcome. However, many of those people do not understand what the state of Maryland is missing out on.  Below is a breakdown of the top four categories that account for 94 percent of the revenue:

 

1.)    48.5%Education. Legislation created an Education Trust Fund that provides funding to public schools through “Bridge to Excellence” formulas. Some of that 48.5% would be used to improve public schools, help to start and finish capital projects at community colleges (how about AACC?), and help with projects at other higher education institutions.

2.)  33.0%Slot Operations. Don’t gawk at that number! In fact, 33% is one of the lowest allocations to slot operations in the entire country (that includes Vegas and Atlantic City). The guys trying to get the slot licenses bid competitively and pay a fee of at least $3 million for every 500 machines. And those fees they cough up go directly to the Education Trust Fund. Not so bad after all, right? License holders will then be required to pay $425 per machine per year in order to fund hotlines and assistance programs for those who have gambling troubles.

3.)  7.0%Purse Dedication. You have to feed the horses! 80% would go to beef up the thoroughbred purses and 20% would go to the standard-bred purses. Juicing the purses could increase competition and bring the state more money through horse racing.

4.)  5.5%Jurisdictions. 5.5 percent would go directly to the jurisdictions in which the slots are located. Of that 5.5%, 18% would go to revitalizing Baltimore City (including Park Heights and Northwest)

5.)  2.5%Race Track Renewal. Bettering the race tracks and making them more attractive for larger events will increase attendance and coverage and lead to higher revenue.  

6.)  2.0%Lottery Commission. Goes to Lottery Commission in order to cover the costs of governing slot operations.

7.)  1.5%Special Account. Goes to an account that provides investment capital and loans to small, minority- and women-owned businesses.

 

To me, all of the above seems to be a pretty legit all-around allocation. With these kinds of numbers, we’re all looking at educational improvements for our children, nieces, nephews, cousins, etc. How much can the lonely 15,000 slot machines really make, you may ask? State legislative analysts estimate total gross slot revenue of more than $1 billion in 2012 and more than $1.4 billion in 2013. So the next time you hear someone bashing ‘Question 2’, fill them in on the truth behind the proposal, or send them here to check it out.

 

Special thanks to Donald C. Fry for providing us with the great statistics listed above. Donald C. Fry is the president and CEO of the Greater Baltimore Committee.

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