|Delegate Doyle Niemann|
BACKGROUND: Last Friday, Maryland Juice reported on a small but significant change to the State's new gambling expansion law that would allow slot machines at "veterans halls" sprinkled throughout Maryland. We feared that this particular gambling expansion provision would lead to neighborhood slot machine sites in numerous residential neighborhoods. In fact, the way the newly passed law is structured, veterans halls would get to operate slot machines -- whether or not the November gambling expansion referendum passes. Our piece generated a response from Del. Eric Luedtke of Montgomery County and Fred Nordham from the Prince George's Commission for Veterans. Both readers strongly challenged our characterization of the "neighborhood slots" expansion and insisted that the machines were different from slots and could not be used by those who were not members of the veterans halls.
Del. Luedtke, for example, noted that "Slot machines have been authorized in veterans halls in most eastern shore counties (including Talbot Co., which includes Easton) for about 20 years, so your mentioning Easton in the title of your post is probably not on target. Most people don't know that, largely because these foreign legion and VFW posts are members-only, therefore not open to the general public, therefore not 'neighborhood slots parlors'." But this statement is being strongly challenge by Luedtke's colleague from Prince George's, Del. Niemann.
DELEGATE DOYLE NIEMANN: I read your update on gambling at the veterans halls. I think that Eric and Fred are both misreading the bill that was passed.
First, the bill doesn't limit who can apply for the five gaming machines to VFWs and American Legions. The definition is incredibly broad. An organization that self-declares itself to be a "veterans" organization qualifies if it is organized under 501(c)(4) or 501(c)(19) of the tax code. This is not the 501(c)(3) for tax-exempt status, which is highly regulated, but a more generic status for "nonprofit" organizations. It encompasses a much broader array of possible organizations.
There is no definition for "veterans." Arguably, a host of organizations that claim to serve or represent veterans or have some connection to veterans might qualify. Think, for example, of all the sometimes-questionable organizations out there raising money or doing things like operating thrift stores or car donation businesses; some of them might qualify.
Also, there is no requirement as to being an established organization. On the shore, organizations seeking slots have to have been located in the county for at least five years or affiliated with a bona fide charitable organization that has been in business for 50 years. There is no such requirement here, so presumably anyone can go out and incorporate a new organization and then apply. Expect that to happen.
To be sure, the new Gaming Commission has the power to deny requests, but they can't be arbitrary in that. Given the amount of money involved, you can certainly expect legal challenges if they do deny applications.
There are 60 organizations on the shore that operate more than 250 slot machines. Two-thirds, they say, are veterans organizations. Their handle (the amount gambled) is close to $55 million, if I recall DLS' numbers. Of that the organizations get 10% or $5.5 million. Half goes to the state and they are supposed to give half of the remaining amount in grants to local charities. Under the expanded program, the state gets less (40%, we were told on the floor) and there is no requirement for supporting local charities. The sponsoring organization gets it all.
As to who can play, some veterans organizations may limit admission to members, but there is no requirement under the bill that they do so. The only limit is that the machines have to be at the place of business of the organization. So a "veterans" thrift store open to the public might be able to get slot machines and have them available to the public. Again, expect that.
Finally, as to the machines. The good Delegate from Montgomery County, who was quick to defend the exemption of his county from the new provisions, may say these are not slot machines, but it is a distinction with no meaning. And, as a technical matter, it is not clear that it is actually embedded in the bill.
There is a history of trying to distinguish "instant bingo machines" from "slot machines" in Maryland. That was to justify their continued existence at the Rod and Reel in Calvert County. But that distinction has been abandoned by the courts and was explicitly overturned by the General Assembly in 2008. For all practical purposes, these machines look like slot machines, operate like slot machines, and have payouts and profits like slot machines. They are slot machines.
This is all about money. Slot machines and their like take in from $50 to more than $1,000 a day. The 3,000 machines at Maryland Live, for example, took in an average of $351 a day a piece during July. Some of the illegal machines we have shut down in Prince George's County hit the $1,000 a day number. That is a whole lot of money that will be floating out there with no clear accountability or even accounting.
For all the attention that was paid to the possibility that a new casino in Prince George's County might get 3,000 machines, the impact of expanding the number of non-casino machines across the state (except in Montgomery County) may be considerable greater -- for casino owners and for the public.
Delegate Doyle Niemann
More on Maryland's gambling expansion plan soon!