SYNOPSIS OF "SLOTS LEGISLATION"

House Bill 4 (Constitutional Amendment)

· State may issue up to 5 VLT operation licenses

· State may not authorize more than 15,000 VLT's

· Locations:

1. A.A. Co., within 2 miles of MD Rt. 295

2. Cecil Co., within 2 miles of I-95

3. Worcester Co., within 1 mile of Rt. 50 & Rt. 589

4. Allegany Co. - State property located within Rocky Gap State Park

5. Baltimore City, in a non-residential area within ½ mile of MD Rt. 295 on property owned by the City on date of application for VLT operator license

· Not more than one VLT operation in a single county or Balto. City

· VLT facility shall comply with all applicable planning and zoning laws of the local jurisdictions

· After 11/15/08, General Assembly may not authorize any additional forms or expansion of commercial gaming, except by referendum

Senate Bill 3 (Maryland Educational Trust Fund – Video Lottery Terminals)

· One member of Lottery Commission to be liaison to MRC; one member of MRC to be liaison to Lottery Commission

· MRC to award at least 40 days of live racing at Pimlico

· VLT's to be owned or leased by State

· Video Lottery Facility Location Commission (VLFLC) may not:

- issue more than 5 VLT operation licenses

- award more than 15,000 VLT's in the State

- award more than 4,750 VLT's at any one location

· State Lottery Commission expanded to 9 members (currently 5)

· Individual or business entity may not own more than one VLT facility

· Conditions of eligibility for funding under Racetrack Facility Renewal Account:

- live racing:

1. for Laurel Park and Pimlico – minimum of 220 live race days unless otherwise agreed by track licensee and MTHA (no reference to MHBA)

2. for Rosecroft – minimum of 90 live race days unless otherwise agreed by track licensee and CSOA (no reference to SHBA)

3. for Ocean Downs – minimum of 40 live race days unless otherwise agreed by track licensee and CSOA (no reference to SHBA)

- Pimlico – retain Preakness in Maryland (at Pimlico, or if Pimlico ceases to exist, another track in Maryland approved by MRC)

- Laurel – permit Maryland Million at Laurel (unless racing licensee and Maryland Million, LLC agree to another location approved by MRC)

- develop and submit to MRC a multi-year plan to improve quality and marketing of horse racing in MD including a master plan for capital improvements and maintenance at horse racing facility of at least $1.5M annually in addition to commitments that have been made to MRC (amt. may include matching funds); to include improvements to backstretch

- develop with other racing industry members a multi-year plan to improve quality and marketing of horse racing industry in MD – to include timelines for specific actions that will be taken by the thoroughbred and standardbred industries including joint marketing efforts

· if VLT operation license at Laurel Park, license shall be revoked if Preakness transferred to a location outside of MD

- additional conditions:

1. promote and conduct Preakness at Pimlico; if Pimlico does not exist, at another location in the State approved by MRC

2. permit Maryland Million at Laurel

3. maintain Bowie Training Center unless State law no longer requires; if state law no longer requires, convey property to State under preserved land (Open Space Program)

· licensee to commence operation of VLT facility within 18 months of license being issued

- VLT facility at racetrack location – may begin in a temporary facility; permanent location at track within 30 months after issuance of VLT operation license

· initial term of VLT license – 15 years; re-licensure for 10 year periods

· VLT shall have average payout of at least 87%; Lottery Commission, by regulation, may establish average payout of not more than 90%; Lottery Commission may approve average payout of not more than 95%

· VLT facility:

1. may operate from 8:00 a.m. to 2:00 a.m.

2. responsible for all marketing, advertising and promotion

3. may not provide free food or alcoholic beverages

4. may provide food and drink only at prices commensurate with prices charges by restaurants in county where VLT facility located

· Lottery to promulgate regulations which:

1. limit the number and location of, and withdrawal amounts from, ATM's

2. require payouts above a certain amount to be made by check

3. limit the dollar amount a VLT will accept

4. prohibit use of credit cards, debit cards in VLT's

5. prohibit cashing of paychecks at VLT facility

6. prohibit predatory marketing practices

· all proceeds from operation of VLT's electronically transferred daily to State Lottery Fund (under control of Comptroller)

- from State Lottery Fund, Comptroller pays following amounts:

1. 2% to State Lottery Agency for costs

2. to VLT operation licensee, percentage stated in accepted bid for location, not to exceed 33%

3. 5.5% in local impact grants

4. 7% to Purse Dedication Account, not to exceed $100M annually

5. for first 8 years of operation of VLT facility, 2.5% to Racetrack Facility Renewal Account, not to exceed $40M annually

6. 1.5% to Small, Minority, and Women-Owned Business Account

7. remainder to Education Trust Fund

· Purse Dedication Account

- transmittal prepared by MRC for issuance of warrant to pay out monies from account

- MRC to allocate funds as follows:

1. 80% to thoroughbred industry; 20% to standardbred industry

2. re: thoroughbreds: 85% to purses ($100K to Fair Hill); 15% to Maryland-Bred Race Fund

3. re: standardbreds: 85% to standardbred purses at Rosecroft, Ocean Downs and Allegany Co. racecourse allocated based upon number of live racing days; 15% to Standardbred Race Fund

- on or before 12/1/14, MRC to conduct study to determine impact of Purse Dedication Account on Racing Industry and make recommendation to General Assembly regarding continuation

· Racetrack Facility Renewal Account

- expenditures only upon approved transmittal prepared by MRC

- funds from account to be used to provide grant to racetrack licensee for capital construction and improvements

- 80% to Pimlico, Laurel and Timonium; 20% to Rosecroft and Ocean Downs

[$1M to Timonium annually for 5 years w/o matching funds]

[MRC may provide direct grant funding from thoroughbred portion for establishment of a horse racing museum as part of Pimlico Race Course]

- to obtain grant, racetrack licensee shall:

1. submit a capital construction plan to MRC for approval

2. provide and expend a matching fund

- MRC, in consultation with DGS, to monitor the implementation of capital construction plan and make provisions for recapture of monies if construction plan not implemented within time frame approved by MRC

[MRC to promulgate regs. to implement these provisions]

· Lottery Commission to establish an annual fee of $425, to be paid by each VLT operation licensee for each VLT, and distribute to the Problem Gambling Fund

· Video Lottery Facility Location Commission (terminates 1/1/15)

- 7 members (3 appointed by Gov.; 2 appointed by President of Senate; 2 appointed by Speaker of House)

- to contract with an independent consultant that has at least 10 years experience in consulting matters related to the gaming industry

- not more than 5 VLT operation licenses to qualified bidders through a competitive bidding process

- locations:

1. A.A. Co., within 2 miles of MD Rt. 295

2. Cecil Co., within 2 miles of I-95

3. Worcester Co., within 1 mile of Rt. 50 & Rt. 589

4. Allegany Co. - State property located within Rocky Gap State Park

5. Baltimore City, located in a non-residential area within ½ mile of MD Rt. 295 on property owned by the City on date of application for VLT operator license

[if VLT operation license issued at Ocean Downs, operation licensee may not:

1. build any type of hotel, motel or other public lodging, or convert an existing facility within 10 miles of O.D. into any type of hotel, motel, or other public lodging

2. build or operate a conference center, convention center, amusement park, or miniature golf course on or within 10 miles of O.D.

3. offer live music, floor shows, dancing or other forms of live entertainment other than fireworks and a single piano played by an individual]

- number of VLT's

1. A.A. Co. location – 4,750

2. Baltimore City – 3,750

3. Cecil Co. – 2,500

4. Rocky Gap State Park – 1,500

5. Worcester Co. – 2.500

[Video Lottery Facility Location Commission may allocate VLT's in a different manner on determination that market factors and other enumerated factors so warrant; upon termination of Video Lottery Facility Location Commission, State Lottery Commission may allocate or reallocate number of VLT's in a manner to ensure highest potential revenues are achieved]

· Bid for VLT operation license to be submitted by 2/1/09:

- initial license fee in bid of at least $3M for each 500 VLT's included in bid [all such fees accrue to Education Trust Fund]

- provide for at least $25M in direct investment in construction and related costs for each 500 VLT's in bid

· Uncodified provisions:

1. MRC to study current levels of benefits provided to employees of thoroughbred and standardbred racetracks; make recommendations to ensure that the benefits to, and funding for, racetrack employees are adequate; submit report to General Assembly on or before 1/1/09 with recommendations on statutory changes if needed

2. Not less than 95% of revenues received by Baltimore City through a partnership with a VLT operation licensee (excluding any local impact grants) shall be used to reduce real property taxes in Baltimore City and for public school construction and rehabilitation of Baltimore City public schools

3. Corporation that cumulatively spends more than $10K on campaign material to promote success or defeat of constitutional amendment proposed by HB4 shall file a campaign financial report