The Gazette

Rosecroft deal crumbles; slots tumble

by Thomas Dennison
Staff Writer

Aug. 13, 2004

ANNAPOLIS -- The family of Baltimore Orioles owner Peter G. Angelos is withdrawing its bid to buy Rosecroft Raceway, delivering another blow to the protracted and divisive campaign to bring slot machines to Maryland.

The apparent collapse of the Angelos deal, coupled with another unsuccessful week of negotiations between House Speaker Michael E. Busch (D-Dist. 30) of Annapolis and aides to Gov. Robert L. Ehrlich Jr. (R) over a slot machine referendum, is prompting speculation that a deal may not be struck this year -- and maybe not until after the 2006 elections.

"I'm tired of fooling with it," said Senate President Thomas V. Mike Miller Jr. (D-Dist. 27) of Chesapeake Beach, the General Assembly's leading slots proponent. "I've wasted my entire summer on it. I've given up on it."

The slots impasse is fueling the decision of the Angelos family to walk away from buying Rosecroft, the harness-racing facility in Prince George's County that has been touted as a potential site for slot machines, according to sources close to Angelos and the racetrack negotiations.

Two sources with direct ties to Angelos, speaking on the condition of anonymity because of the sensitivity of the negotiations, told The Gazette that the deal has fallen apart. A check for $7.25 million of the $13 million bid that was to be delivered Thursday was never cut because Angelos "is convinced" that the General Assembly and the governor will not come to an agreement on slots any time soon.

"It's over," said one source close to Angelos and the negotiations.

A call to Angelos' law firm in Baltimore on Thursday was not returned.

Bringing Angelos -- and his reputation as a deep-pocketed campaign donor -- into the slots debate was considered a boon for the pro-slots camp. His exit, however, sends a message that Busch, Miller and Ehrlich are too entrenched and tired of fruitless negotiations to resolve the issue, lawmakers and lobbyists said.

"If Mr. Angelos is pulling out of this, it's a huge red flag," said House Economic Matters Chairman Dereck E. Davis (D-Dist. 25) of Upper Marlboro, a slots opponent. "I could not see Mr. Angelos or his family getting out of this process unless they have enough information that there is a great deal of pessimism in Annapolis that a deal is in the works."

But Davis did not go so far as to say that the apparent end of the Rosecroft deal means the death of slots. He compared the situation to heated contract negotiations in sports.

"Whenever things look their worst is when a deal comes together," Davis said. "As someone who is opposed to slots, I'm still nervous."

Paul E. Shurick, Ehrlich's communications director and a top slots negotiator for the administration, said the collapse of the Angelos deal pales in comparison to Busch's obstructionism.

"I don't think it's a blow," Schurick said of the Angelos family's pullout. "Nothing has changed. Speaker Mike Busch continues to stand in the way of a slots program. There is already a majority in the House for slots, with or without Mr. Angelos. The speaker -- and the speaker alone -- is blocking that majority."

Gambling advocates and lawmakers on both sides of the issue point to the poisonous atmosphere attributed to the deteriorating relationship between Busch and Miller, saying it provides little hope of a compromise. Miller has dismissed Busch as "a child" and has continued to sting him publicly by laying the blame for future budget cuts on his shoulders.

"Right now. Mike Busch is at odds with the governor, the Senate of Maryland and the people of Maryland," Miller said. "The people are not stupid. They see what's happening here. They see one person standing in the way."

Miller even hinted that a major leadership change in the House has to happen before a slots bill can be approved.

Emphasizing he is not personally advocating for a coup against Busch, Miller said he talked to Mike Veon, a Democratic whip in the Pennsylvania House of Representatives, who asked, "How can the House membership let one person dictate this issue?"

"The speaker always finds some way to say 'no,'" Miller said.

It is ironic that neighboring Pennsylvania approved slot machines this year, an initiative pushed by a Democratic governor through a Republican-led legislature.

For his part, Busch has not responded to Miller's gibes or those of Comptroller William Donald Schaefer (D), who mockingly referred to the speaker as "governor," at Wednesday's Board of Public Works meeting. Schaefer described Busch as "out of bounds," saying that the speaker "doesn't have the courage to put it to a vote" in the House of Delegates.

Asked about personal nature of the attacks from two of the Democratic Party's leaders, Busch said their comments "only polarize the issue even more than it already is."

A referendum is the most sensible way to decide the issue because the proper safeguards can be put in the bill, Busch said, reiterating what he has been saying for weeks. He has said throughout the week that he is open to any specific changes in the proposal he gave Ehrlich administration officials last week -- except for the referendum.

With Busch setting a Monday deadline for Ehrlich to agree to seek a referendum, the governor appears on the verge of flushing away what may be his best chance to pass slots this term. Busch said a referendum is the House's be-all-end-all position, and if all sides fail to reach an agreement, chances of a deal in the future remain slim.

"If you can't come to an agreement to put this on a referendum, how do you expect to come to an agreement in the future between two Houses that are as far apart as the North and the South poles?" Busch said.

Key members of the Ehrlich administration -- publicly and privately -- are sending signals that a slots deal is quickly evolving into a second-term issue. Slots lobbyists who have met with members of the administration and other pro-gambling lawmakers are extremely skeptical that a deal will happen this term.

"It's extremely frustrating because this legislative inaction is going to cost people their jobs and the horseracing industry its viability in Maryland," said Gerard E. Evans, lobbyist for the Maryland Thoroughbred Horsemen's Association. "We can't wait until 2006. We'll be dead by then. ... Unfortunately, that's the direction it seems to be going."

Aside from Ehrlich's stated opposition to a referendum because of his reluctance to change the state's 500-page constitution, a referendum deal would have several negative political implications for Ehrlich.

It would give Democrats a way to put their schism over the issue behind them; it would prevent Ehrlich from continuing to blame Busch and the Democrats for any budget cuts he makes; and it would rob Ehrlich of a valuable wedge issue in 2006. It also would give Ehrlich's potential Democratic gubernatorial rivals -- Montgomery County Executive Douglas M. Duncan and Baltimore Mayor Martin O'Malley -- a cause to fight against and raise their statewide profiles.

There is the risk, however small, that a slots referendum would lose.

The governor has put almost no effort into negotiating a slots deal this summer, saying Busch has wasted his time.

"I'm not spending any time on it at all," Ehrlich said last week.

On the prospects of gridlock on slots continuing for the next two years, the Ehrlich administration is looking forward to running on the issue in 2006.

"That's a referendum I want to have," Schurick said. "Let's make this a referendum on leadership and who has a plan to solve Maryland's fiscal crisis and who has a plan to raise taxes. Let's have that debate."

Staff Writer Steven T. Dennis contributed to this report.