The Maryland horse racing industry may not see the additional funding that they were promised when slot machines were approved in 2008.
When one bill that would have slash the purse dedication account-the 7% of slot machine revenues that would go to winners-in half has been withdrawn from evaluation, another bill threatens to get rid of the slot machine money completely. Delegate Luiz Simmons (D-Montgomery County), is proposing to take that seven percent-or up to $100 million annually-and utilize it for a school building fund.
Simmons said on March 9th, 2010 that he has no problems with the horse racing industry but he feels that they should not be giving a handout to horse racing when most other organizations are looking for additional funding.
Simmons' legislation, House Bill 885, would create a school building and improvement account that could be utilized aside from the general obligation bonds on public education infrastructure. Maryland has delayed most of those projects because of the $2.5 billion budget deficit in 2010.
Simmons said that they really have to evaluate their priorities and they should not ignore some important aspects of their economic structure by giving $100 to the horse racing industry.
However, the amount of money going into that fund, whether it will be allocated for horse racing purses or school building, will not reach the $100 million mark for quite some time.
That amount was calculated based on Maryland issuing all fifteen thousand available video lottery terminals to the five gaming locations. Last, only three locations in Maryland were awarded gaming license accounting for less than half of the available 15,000 machines.
Simmons does not have a horse racing track in his area. The bill is co-sponsored by four other delegates of Montgomery County. Another bill that threatened to reduce to the racing purse funds in half have been withdrawn, although its sponsor says that he will try again next year.
Delegate Frank Turner (D-Howard County), has removed House Bill 40 out of consideration, saying that the excess money would not be needed to acquire video lottery terminals until some of the bigger proposed slots facilities are fully operational.
The legislation plans to cut the purse dedication account in half for horse races, leaving only 3.5% of slot machine revenue or no more than $50 million to be divided among winners. The other 3.5% would be added to the state lottery's cut for administration expenses and investment in slot machines.
With the change, Maryland would have 5.5% of VLT revenues or no more than $7.5 million, enough to provide one-of-a kind slot machines that will attract customers away from Delaware, West Virginia and Pennsylvania.
While Maryland will need more than the $30 million already set aside to fill all three approved locations with the best slot machines, the original budget allocation will pay for Ocean Downs in Worcester County and the new facility in Cecil County, both on schedule to open later this year.
However, the 2,300 machines headed to the facilities account for only a third of the 7,050 machines awarded. The rest of the machines will go to Cordish Cos. development in Anne Arundel County.