Legal Gaming is Coming to Texas: The Maryland Playbook
Maryland Voters Overwhelming Passed Legalized Gambling
"Gambling ain’t no blight on society." – South Carolina State Senator Robert Ford.
Maryland voted for a different kind of “change” in November. Over 60% of Marylanders voted for legal gambling. Specifically, Maryland voters approved the Authorized Video Lottery Terminals to Fund Education initiative, a constitutional amendment that legalized slot machines, more commonly referred to by proponents as video lottery terminals or VLTs. This constitutional amendment will allow for 15,000 slot machines to be installed at 5 locations to be determined via a bidding process. So why should Texans care what happened in Maryland? It is not what happened necessarily, as much as how it happened.
The vote to legalize gambling in Maryland is unfolding now in Texas. The effort to legalize VLTs in Texas and the arguments used for and against are nearly the same. Just like Texas, Maryland debated whether to legalize gaming for over a decade. However, all efforts to pass legislation failed in Maryland’s Republican controlled state government. Once Maryland elected Democrat Governor Martin O’Malley, a former gambling lobbyist, the VLT bill was revived from a decade long coma.
Upon taking office, Governor O’Malley declared a financial state of emergency. Governor O’Malley declared that the Maryland public education system was running a multi-million dollar deficit and that the State desperately needed to find a new source of revenue. Specifically, Governor O’Malley called upon legal gaming to solve its funding ills. The Governor did not want to raise taxes and noted that Marylanders spend hundreds of millions of dollars in neighboring West Virginia and Atlantic City casinos. Governor O’Malley argued that Marylanders actually paid for better schools in West Virginia and New Jersey by crossing state lines to gamble. Third, Governor O’Malley noted that legal gaming could revive Maryland’s storied horse racing industry and keep the Preakness Stakes, the second race of the Triple Crown, in Baltimore.
When polled, Marylanders gave three main reasons why they voted for legal gaming or VLTs. First, Marylanders did not want an increase in their State income tax rates nor see an increase in the State sales tax. Marylanders perceived VLTs as a voluntary Sin Tax imposed only upon those who chose to participate. Second, Marylanders believed that the tax revenue generated from VLTs would in fact fund public education. Third, voters acknowledged that Marylanders were driving across State lines and gambling in neighboring states. Logic asked why should Marylanders pay for West Virginia’s or New Jersey’s roads and public education. Marylanders also pointed to job creation and development.
Most surprising, was how little of an impact the morality argument played in this election. Only a relatively small minority of Marylanders cited moral decline as a reason why they opposed the legislation. The voters were more likely to oppose VLTs because of an alleged increase in crime. Nelson Rose, a gambling-law professor at Whittier Law School in Orange County, California was quoted in an article by Associated Press reporter, Greg Bluestein, “Once you have legalized a form of gambling, the moral argument draws away and gambling is looked at as a cost-benefit analysis.” Translation: It’s called slowly turning up the heat on a frog in a pot of water. Just like Texas, Maryland maintained a State Lottery and legalized pari-mutuel betting at horse tracks. Oklahoma, Louisiana and Mexico litter the Texas State Line with casinos and their parking lots are full with cars and trucks with Texas license plates. Just like Maryland, morality may not play as much of a roll in this election as one would expect. However, this argument will play a much larger role in conservative Texas than Maryland.
Just like Maryland, Texas will legalize gaming… eventually. Maryland provided the playbook and laid out the road map. The same arguments will be used in Texas by both sides as they did in Maryland and the same reasoning will be applied. Texans may not have voted for change in 2008, but Texans will vote for another kind of “change” and soon.
Adam W. Vanek
214.998.1365
adam.vanek@tiptonjoneslaw.com
Adam is a former international banking officer for a FORTUNE Global 500 investment bank and focuses his legal practice representing entrepreneurs and small to middle market businesses in contracts, litigation and government matters.
"Gambling ain’t no blight on society." – South Carolina State Senator Robert Ford.
Maryland voted for a different kind of “change” in November. Over 60% of Marylanders voted for legal gambling. Specifically, Maryland voters approved the Authorized Video Lottery Terminals to Fund Education initiative, a constitutional amendment that legalized slot machines, more commonly referred to by proponents as video lottery terminals or VLTs. This constitutional amendment will allow for 15,000 slot machines to be installed at 5 locations to be determined via a bidding process. So why should Texans care what happened in Maryland? It is not what happened necessarily, as much as how it happened.
The vote to legalize gambling in Maryland is unfolding now in Texas. The effort to legalize VLTs in Texas and the arguments used for and against are nearly the same. Just like Texas, Maryland debated whether to legalize gaming for over a decade. However, all efforts to pass legislation failed in Maryland’s Republican controlled state government. Once Maryland elected Democrat Governor Martin O’Malley, a former gambling lobbyist, the VLT bill was revived from a decade long coma.
Upon taking office, Governor O’Malley declared a financial state of emergency. Governor O’Malley declared that the Maryland public education system was running a multi-million dollar deficit and that the State desperately needed to find a new source of revenue. Specifically, Governor O’Malley called upon legal gaming to solve its funding ills. The Governor did not want to raise taxes and noted that Marylanders spend hundreds of millions of dollars in neighboring West Virginia and Atlantic City casinos. Governor O’Malley argued that Marylanders actually paid for better schools in West Virginia and New Jersey by crossing state lines to gamble. Third, Governor O’Malley noted that legal gaming could revive Maryland’s storied horse racing industry and keep the Preakness Stakes, the second race of the Triple Crown, in Baltimore.
When polled, Marylanders gave three main reasons why they voted for legal gaming or VLTs. First, Marylanders did not want an increase in their State income tax rates nor see an increase in the State sales tax. Marylanders perceived VLTs as a voluntary Sin Tax imposed only upon those who chose to participate. Second, Marylanders believed that the tax revenue generated from VLTs would in fact fund public education. Third, voters acknowledged that Marylanders were driving across State lines and gambling in neighboring states. Logic asked why should Marylanders pay for West Virginia’s or New Jersey’s roads and public education. Marylanders also pointed to job creation and development.
Most surprising, was how little of an impact the morality argument played in this election. Only a relatively small minority of Marylanders cited moral decline as a reason why they opposed the legislation. The voters were more likely to oppose VLTs because of an alleged increase in crime. Nelson Rose, a gambling-law professor at Whittier Law School in Orange County, California was quoted in an article by Associated Press reporter, Greg Bluestein, “Once you have legalized a form of gambling, the moral argument draws away and gambling is looked at as a cost-benefit analysis.” Translation: It’s called slowly turning up the heat on a frog in a pot of water. Just like Texas, Maryland maintained a State Lottery and legalized pari-mutuel betting at horse tracks. Oklahoma, Louisiana and Mexico litter the Texas State Line with casinos and their parking lots are full with cars and trucks with Texas license plates. Just like Maryland, morality may not play as much of a roll in this election as one would expect. However, this argument will play a much larger role in conservative Texas than Maryland.
Just like Maryland, Texas will legalize gaming… eventually. Maryland provided the playbook and laid out the road map. The same arguments will be used in Texas by both sides as they did in Maryland and the same reasoning will be applied. Texans may not have voted for change in 2008, but Texans will vote for another kind of “change” and soon.
Adam W. Vanek
214.998.1365
adam.vanek@tiptonjoneslaw.com
Adam is a former international banking officer for a FORTUNE Global 500 investment bank and focuses his legal practice representing entrepreneurs and small to middle market businesses in contracts, litigation and government matters.
Labels: casinos, legal gambling, legal gaming, legalize gambling, Texas Legislature
posted by Dallas Attorneys and Counselors at
3:57 PM
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