Lost On The Shore

Don't Worry About the Slots...Yet

 
There's been a lot of public hand-wringing and breast-beating over the small number of bids received to operate slot machines in Maryland - only a total of six bids were received for the five possible sites.  Two of the bids came without the required deposit, suggesting that they might be less than serious and probably will be disqualified.  Many have said that the slots legislation needs to be changed already, before the first machine is in place or any bid has been accepted, to give the potential operators a bigger cut.

I say that's a bunch of rubbish.  In case anyone hasn't noticed, the economy is not doing too well these days and credit is tight.  It can't be easy for some to come up with the required deposit.  Further, there are still uncertainties about some of the sites that need to be cleared up.  But these problems will be solved eventually - the economy will improve, credit will loosen and the issues around a couple of the sites will be resolved.  There's absolutely no need to panic and start throwing more money at the potential slots operators.

We need to look no further than right here on the Shore where William Rickman, arguably the most experienced slots operator among all the bidders, submitted a bid to place 800 machines at his Ocean Downs race track.  Mr. Rickman, who is the principal in the Delaware Park slots operation just up the road is experienced, understands the cost and income from operating slot machines and has chosen to put up the required money, even given the relatively small share of proceeds that Maryland allocates to operators.  If he can do it down here, other operators can do it at the other sites.  It will just be a matter of time.

Similarly, Cordish, who has some experience in the business, submitted what seems to be a viable bid for the Anne Arundel County site.  It looks as though the bids for the Cecil County and the Baltimore City sites are also good.  All of the bids, except for Cordish's are for fewer slots than the legislation allows, but give them time and eventually the'll reach the cap. 

So don't panic and start throwing money at the slots operators.  They don't need it. 

[I've been offline for a while due to a combination of events.  I hope to get back to posting regularly soon!]

The Race Goes On

With just about a month until election day, there are a few things that seem clear.

In the Presidential race, Obama/Biden will win in Maryland and win big.  Of course, this was a foregone conclusion from the beginning and neither party has mounted a presidential campaign here because of that.  Obama's lead seems to be growing, though and he seems to be doing well in the neighboring states of Pennsylvania and Virginia.  He has a solid lead in Delaware.  West Virginia could go to McCain, but much depends on the economy.

On a congressional level, seven of Maryland's eight seats seem to be safe for incumbents.  The only question is in the First District.  Here Frank Kratovil and Andy Harris are campaigning hard to succeed Wayne Gilchrest.  At this point, it looks as though Kratovil will do well on the Eastern Shore, but Andy Harris will do well in the portion of the district on the Western Shore.  Polling seems to be very close.  The Democratic Congressional Campaign Committee has put a lot of money into the race and we'll see if that makes a difference in the home stretch.

Both parties are working actively to register voters and provide grass-roots support.  It's instructive to look at voter registration numbers.  As of October 2, there were 193,223 registered Democrats and 189,858 registered Republicans in the District.  Another 67,155 were either unafilliated or registered to a smaller party.   In the past six days (since 9/26) 669 voters had newly registered as Democrats in the district while 471 had newly registered as Republicans.  Voter turnout is expected to be high - more than 80% of registered voters.  Last minute registrations and get out the vote efforts might prove to be crucial in this race.  The registration deadline to vote in the general election is October 14 at 9:00 pm.

The big question on the ballot this year will be a referendum on approving the licensing of slot machines in Maryland.   Lately the opponents have been waging a shrill campaign against the question (I get two or three e-mails a day from them).  Supporters have been relatively quiet.  It will be interesting to see if the fiscal problems in Maryland at both the state and local levels brings out more support in the next month.  It's amusing to see former Governor Bob Ehrlich, who strongly supported slots when he was governor try to justify his opposition to them now as something other than raw political jealousy.  At this point I'm betting (wagering? gambling? venturing?) that the question will pass, but it won't be as easy as it looked six months ago. 

Budget Cutting

The Maryland state budget is facing a shortfall and it's not just pennies, nickels and dimes, either.  According to the latest estimates, revenue in this fiscal year will be $432 million below projections and next year could see a $1 billion shortfall.  The shortfall reflects economic conditions in Maryland that are less rosy than originally projected.  

The following table shows the biggest changes in the 2009 projections.

Revenue Source	2008 Actual	Original 2009	Revised 2009	Difference
Income Tax	$6940 million	$7445 million	$7310 million	-$135 million
Sales Tax	$3675 million	$4053 million	$3783 million	-$265 million
Lottery	$497 million	$511 million	$495 million	-$16 million
Tobacco Tax	$376 million	$451 million	$433 million	-$18 million

For the most part, revised projections continue to show an increase over 2008.  the Maryland economy is still growing, albeit slowly and the changes in the tax rates during the special session are having an effect.  Nevertheless, it is clear that changes are going to have to be made.

It's also clear that there is no political room for additional taxes of any kind.  Changes to the state budget are all going to have to come on the expenditure side.  For 2009, the projected surplus of about $250 million will go a long way toward closing the revenue gap.  Delays in filling vacant positions and deferring some construction until next year could close the remainder of the gap for this year. 

Next year will be harder.  It's clear that state aid to local governments is going to be reduced below the projected figures even as local governments struggle to balance their own budgets.  The $400 million that Governor O'Malley devoted to school construction this year will be much smaller next year and the state is likely to push some of the cost of teacher pensions onto the local governments that employ the teachers.  State aid to higher education might be trimmed below projections and we could see modest tuition increases at most state universities.  State employee pay raises will be curtailed and there could be some modest rollback in efforts to help those Marylanders without health insurance. 

The real action and pain, though, is going to come at the local level.  Big counties like Montgomery and Prince Georges are already looking at shortfalls of hundreds of millions of dollars.  With Maryland's three-year property assessment cycle, local governments, which have already been suffering from reduced transfer tax receipts, are also going to see the first effects of the real estate bust on property tax receipts.  And the certainty of reduced state aid to local governments will just make matters worse.

So keep your eyes on those local governments - that's where the real action on the Maryland budget shortfall will come.

Items of Interest

It's been a soggy couple of days on the Shore and we're looking at a few more before we finally break into our late spring and summer weather.  While I'm waiting I want to catch up on a few items of interest that caught my eye over the past week.

Energy prices continue to rise. Gasoline prices set a new record in Maryland this week.  Gasoline prices nationwide reached an average of $3.67 a gallon and oil reached $126 a barrel.  Gas prices here on the Shore ranged from about $3.55 to $3.65 while in the high priced areas of Montgomery County prices were in the $3.75 - $3.85 range with one station posting $3.97 and a station in DC was asking $4.05 for regular.  Diesel prices are higher everywhere. 

The tourism industry here on the Shore relies heavily on vacationers driving over the Bay Bridge from the DC/Baltimore area and down from the Philadelphia area.  With the peak summer driving season starting in a few weeks, the ability of consumers to absorb these increases could have a dramatic impact on the economy here.

On the electricity side, BG&E posted their new rates and PEPCO Holdings announced that their first-quarter profits doubled from last year.  It looks like a difficult summer on the electricity front, also.

Transportation  In a related development, the New York Times today reported that higher gas prices are driving record crowds to mass transit.  Mass transit systems are struggling to cope and equipment shortages are becoming apparent as is apparent both in Baltimore and Washington.  With a huge proportion of the state's transportation budget tied up in the InterCounty Connector, the state and local jurisdictions are going to have to look hard at their budgets to see where they can free up some funds to expand mass transit options.

Here on the Shore, there's little mass transit to speak of.  In Ocean City, though, the town is encouraging visitors to rely on its bus system while visiting there.  A crowded summer weekend can easily overtax the system there and they are going to have to be careful to ensure they have enough capacity.

On a brighter note, the state has announced that construction will begin next year on the MARC station in Edgewood.  With thousands of new jobs coming to the Aberdeen Proving Grounds, this station will be a critical part of the transportation infrastructure there. 

Health  A recent study in New England shows that teenagers in places with strict smoking bans in restaurants were forty percent less likely to become regular smokers.  Apparently, huddling outside restaurants and bars to take a puff isn't 'cool'.  Lower smoking rates among teens will help keep health care costs from growing so fast.  Every little bit helps.

Real Estate The number of home sales continues to decline in Maryland.  The National Association of Realtors, as they have every recent month, said that the turnaround is about to start, but almost no one else seems to think so.  Spring is normally the peak selling season, but it doesn't seem to be happening, at least here on the Shore.

In many states, local jurisdictions are facing severe budgetary problems as falling assessments lead to reductions in property taxes.  Here in Maryland, the problem is not quite so urgent as our three-year assessment system means that assessed values are still rising in most jurisdictions.  Some counties, though, like Montgomery and Prince George's, which have come to rely heavily on transfer taxes, are suffering as home sales decline sharply.  All local jurisdictions need to be very careful in committing to future costs, though, as the same three-year assessment cycle which is helping them now will be hurting them in the future as new assessments drop.

[The photo is of Thomas Point Shoal Light] 

Slots

Progressive Maryland blogs, including those over at Free State Politics and over at Politicker MD are filled with posts about the evils of slot machines and how slots will be easily defeated in the upcoming referendum.  I don't agree.

As I understand them, the arguments against slots are that:

• Slots are just the foot in the door - gambling interests really want full casinos in Maryland;
• Gambling of any kind is immoral;
• Slots represent a regressive tax on the poor;
• Slots will create or exacerbate problems for the State as compulsive gamblers and those with low impulse control will gamble away more than they can afford;
• it's ridiculous to subsidize horse racing with slot machines, horse racing is a dying industry anyway; and
• the state shouldn't raise money from gambling, it should raise the money it needs through taxes.

Some of these arguments have merit but some are just nonsense.  Let's take a look.

Slots are just a foot in the door to get casinos in Maryland

Sure, that's possible; and funding for mass transit is just a foot in the door to forcing all Marylanders out of their cars.  It's possible, but not if we don't allow it.  Given the huge, protracted fight over getting slots, I doubt that Marylanders are going to approve full-blown casinos the next year, not that there would be a problem with that.

Gambling of any kind is immoral

If you think gambling is immoral, then so be it.  But research has shown that people are quite fickle about this.  Many who are adamant about the immorality of gambling don't seem to hesitate to buy a lottery ticket or play bingo.  Besides, if you think gambling is immoral, don't gamble, but don't impose your morality on me.  There are those who think driving cars is immoral, or eating meat, or sex, for that matter.  We can't impose every individual's moral code on the entire state.

Slots represent a regressive tax on the poor

Well, this might be true.  I'm not sure.  I know a fair number of people who go to Delaware or West Virginia or even Atlantic City to play the slots from time to time.  They are generally middle class and older.  They play the slots not because they expect to win money, but for entertainment.  Frankly, I like to go bet on the ponies from time to time.  I bet a few dollars here and there and have a wonderful time cheering on my nag.  I never lose more than $20 - $30, but then I never expect to win either.  It may be true that low-income people spend more on gambling than higher income people, I haven't seen convincing evidence.  But keep in mind that most of the state's share of income from slots is targeted toward education.  If there ever was a regressive tax on the poor, it's lack of education.

Slots are going to exacerbate problem gambling in the state.

Well, this is probably true.  Some of the projected income from slots is targeted toward dealing with this problem.  But the fact is that everything has unwelcome side effects.  Bad television stunts the growth of the mind and causes people to buy things they don't need, rock concerts create traffic jams and may promote drug use, newspapers lead to deforestation and generate waste.  We don't ban these things because of the side effects, instead we try to mitigate the side effects and enjoy our bad TV, rock concerts and newspapers. 

It's ridiculous to subsidize horse racing

I agree.  I've written about this before.  If it were possible to vote for slots without the horse racing, I'd welcome it.  But that's not the situation we find ourselves in.  If we were to only accept legislation that is perfect, there would be none. 

The state shouldn't raise money from gambling, it should raise the money it needs through taxes.

An interesting argument and, in a perfect world, a winning argument.  In a perfect world we would all see the benefit of the services the government provides us, the government would provide those services efficiently and effectively at all times and without showing favor to one group or another and we would gladly pay our taxes to support those services.  In this world, however, taxes are anathema to most.  The chances of getting an additional $500 million of taxes passed in Maryland are nil.  So we're faced with either approving slots or foregoing the money (or, more to the point, giving to to Delaware, Pennsylvania and West Virginia).  I'll go with the slots.

[Note, the photo, taken between 1890 and 1900, is of the public garden and casino in Vienna, Austro-Hungary and was included in a book 'Views of the Austro-Hungarian Empire' published by the Detroit Publishing Company in 1905]

Odds and Ends

I just want to follow up on some earlier posts and take another look at the upcoming General Assembly session.  Some issues will be raised that will be difficult to deal with and might cause us to wonder who's in charge up there.

Chickens!

First, as I posted earlier, large farm operations in Maryland should have to get pollution permits just like any other large polluter.  According to this article in the Baltimore Sun, the Maryland Department of the Environment has proposed regulations that would require about 200 of the largest chicken farms in Maryland to get state pollution control permits and follow a few simple regulations for reducing pollution.

Predictably, the Delmarva Poultry Association called the proposed regulations 'unnecessary' even though the Maryland poultry industry produces about a billion tons of manure a year and is a significant polluter of the Bay.  In my view the regulations could be a bit tougher, requiring the industry to do more to stop polluted runoff from reaching the Bay, but I think they're a good first step.

Of course the poultry industry will complain loudly and lobby vigorously to block the regulations, but I think they'll lose this time.  Of course, all of this could have been avoided if they had taken responsibility for dealing with the problem at the beginning, but that's too much to ask.

Taxes!

During the recent special session, the General Assembly balked, in the face of heavy industry lobbying, at extending the sales tax to massage parlors, health clubs, real estate management companies and a few other areas.  Instead, in their wisdom they decided to place a sales tax upon many computers services - a complete surprise to Maryland's thriving IT industry.

Of course, the IT industry has now woken up to the threat, has hired their own lobbyists and raised such a stink that there is a strong likelihood that the tax will be repealed during the coming session with the Montgomery County delegation leading the way for their many IT constituents. 

Of course that raises the question of how to fill the $200 million dollar hole in the budget that the repeal will leave.  The choice is either to raise some other tax or cut spending by $200 million.  Since a chunk of the money was to be devoted to transportation spending, raising the gas tax by a couple pennies seems like a reasonable idea, but I'm not sure how many delegates want to hit people with a gas tax increase even as the price of gasoline continues to rise.

The other option is to cut spending by another $200 million (on top of the $500 million plus already mandated).  The difficulty here is that such a cut would likely come from transportation funding, which the suburban delegations very much like or in the Geographical Cost of Eduction Index, which primarily benefits.....Montgomery County.  Look for a possible surprise increase in the alcohol tax which, I believe, hasn't changed since 1955.

Same-Sex Marriage

The Maryland Court of Appeals effectively tossed the ball back to the General Assembly on this issue by ruling that the state's existing marriage law, which defines marriage as being between a man and a woman, remains valid.  Equality Maryland and other gay-rights organizations have announced they will lobby hard to pass a law to legalize same-sex marriage and they have a lot of support.

There's a lot of opposition, too.  Mike Miller, the President of the State Senate, has announced that he would oppose any such bill.  A lot of churches and religious organizations will oppose it, along with some of the generally conservative parts of Maryland. 

While I personally would like to see some kind of marriage equality act passed, I don't think it has much of chance in this session.  The question is whether a halfway approach - authorizing civil unions - would be acceptable to a majority.  I'm sure there will be lots of noise over this one.

I'll have more tomorrow or Monday.

[The photo is of a poster for the 1899 musical comedy, Hotel Topsy Turvy]

Making It Interesting

The decision to put the slot machine issue in Maryland to a referendum adds a lot of interest to next year's general election.  After all, there's no real presidential contest in Maryland - our electoral votes will go to the Democratic candidate, almost certainly by a significant margin.  There is no Senate race this year in Maryland. 

There are a few significant primary elections at the Congressional level - here in the first district and over in the fourth district where Donna Edwards is trying to unseat Al Wynn in the Democratic primary.  But unless Wayne Gilchrest gets bumped off in the primary, there are not likely to be signficant congressional contests in the general election.

But, ah...the slot machine referendum gives us something to look forward to.  People are passionate about this issue and it's likely to be a bitter, divisive and close campaign.  I look forward to it.  We've had four years of handwringing, hypocrisy, backbiting, moral grandstanding and posturing in the Maryland legislature and now we can look forward to lots more of the same all over the state as the question is put to the electorate.

Opponents of slot machines can be counted upon to inveigh against the moral bankruptcy of gambling (probably while taking a break from their church bingo games), point to the supposed regressive nature of slots and claim that they will produce a new generation of addicts, broken homes, lost jobs and general moral decay.  Churches in Prince Georges County and progressives in Montgomery County will collect enormous sums of money to help defeat slots.

Supports will point to the millions of dollars already wagered by Marylanders in neighboring states, talk about how slots will somehow support open space, call it a 'voluntary tax' and a 'harmless form of entertainment' and mention repeatedly how much of the money will go to support education.  The horse-racing industry and the gambling industry will raise their own enormous sums of money to promote a 'yes' vote.

The real winners will undoubtedly be the TV and radio stations, the newspapers and the sign-makers who will be happy to receive all the money that is raised to flood our airways, newspapers, streets, roads and front yards with advertisements for and against.  Every political pundit, editorial commentator and blogger in the state will be working overtime to voice their considered opinions on who will win. Oh, how exciting!

In that spirit, I would like to offer my initial opinion - it will be very, very close.  Aside from those who are morally opposed on the one hand and those who see their jobs and/or profits dependent on slots on the other hand, I think most Marylanders are on the fence on this one.  Recent polls show that Marylanders support slots by a small margin.  On the other hand, gambling has been defeated in most recent contests in other states.  All I can say for sure is that the contest will be fun to watch.

[Note: the painting above is by William Hogarth - part of his 1755 series 'The Humours of an Election'.  This piece is entitled: 'The Polling'. ]    

Singing a Happy Song?

Well, Governor O'Malley should be singing a happy song.  The special legislative session, which could have turned out disastrously, gave him a good chunk of what he wanted.  Let's take a quick look at the results.

Sales Tax The legislature approved the Governor's proposal to increase the sales tax from 5% to 6%.  His proposal to extend the tax to include tanning salons, accountants, landscapers, etc. was rejected but the legislature inexplicably decided to tax computer services.  There doesn't seem to be any explanation for this.  Perhaps our legislators use tanning salons much more than computers; I wouldn't be surprised.  The sales tax holiday which the Governor proposed for back-to-school shopping was approved - but not until 2011, so if you decide to have children now, they'll be just about school age when the tax holiday kicks in. 

Income Tax The Governor got his wish to make the income tax a bit more progressive, but, in a transparent bow to their wealthier constituents, the Montgomery County delegation trimmed the top rate below the Governor's proposal.  The personal exemption was increased for most taxpayers which will lower their taxes a bit.

Tobacco Tax The Governor's proposal to double the cigarette tax from $1 a pack to $2 a pack was approved.  Smokers are everyone's whipping boy these days and fair game for any tax anyone dreams up.

Corporate Income Tax The Governor proposed raising the corporate income tax from 7% to 8%, closing a loophole that allowed corporations to sell real estate without paying transfer tax and implementing something called 'combined reporting' which would reduce the ability of corporations to shift income from high tax states to low tax states for tax purposes.  The legislature decided to raise the tax rate from 7% to 8.25%, eliminated the transfer tax loophole but decided to 'study' combined reporting.  Now, of course, multi-state corporations have even more incentive to shift income out of Maryland for tax purposes.  Apparently big corporations have better lobbyists than cigarette smokers.

Titling Tax The Governor proposed increasing the automobile titling tax from 5% to 6% to beef up transportation spending.  The legislature adopted the increase but exempted the value of a trade-in. 

Property Tax The Governor proposed reducing the state property tax by 3 cents per hundred dollars of assessed value.  The legislature rejected the cut.

Gas Tax O'Malley wanted to index the gasoline tax to inflation to provide more money for transportation.  The legislature rejected the proposal, allocating some additional money from the sales tax increase to transportation.

Slots The legislature approved the Governor's proposal for a referendum on slot machines in Maryland.  The vote will be held in November, 2008.  After four years of wrangling over slots, the Governor and the legislators decided to punt the question to the voters.  More on this later.

Budget Reductions The Governor had proposed trimming the projected increase in school spending by almost $250 million.  The legislature approved this and some $80 million in additional cuts but asked him to come back with some $220 million in addition cuts to the projected state budget in January.

Overall, it looks like the Governor got the bulk of what he wanted - he should be pleased.  The whole package is not as progressive as was originally proposed, but at least he's put the tax issue behind him.  It remains to be seen how this plays politically, though.  No one ever likes their taxes to go up and most voters have pretty good memories.

The Slots Just Keep Coming

It seems that everyone has something to say about slot machines in Maryland, and the debate doesn't always bring out the best in people.  Anne Arundel County Council Member Josh Cohen seemed to sum up the opposition to slots this way:

...Slots will do nothing to improve our quality of life. Their social ills are well-documented. They encourage gambling addiction and lead to more child neglect, divorce, bankruptcy and broken families, not to mention prostitution, illegal drug use and organized crime...

I'm a little surprised he didn't mention dandruff and bad breath.

Comptroller Peter Franchot led a small group of 40 or so slots opponents in a demonstration in front of his office.  He referred to supporters of legalized slot machines as "forces of evil".  A short distance away, horse-racing supporters demonstrated in support of slot machines saying they would save education, and, by the way, horse racing, and carrying signs saying that 'Franchot Must Go".

Down here on The Eastern Shore, the town fathers of Ocean City deplored slot machines, passing a resolution stating their steadfast opposition to slot machines on the Eastern Shore, conveniently forgetting that there are already plenty of them just up the road in Dover, Delaware.

Meanwhile, the Baltimore Sun ran an article suggesting that the slots bill, as currently structured, might not be enough to really support the race tracks in Maryland.  According to the O'Malley administration, the slots revenues would be divided this way:

• State Education Trust Fund   -50%
• Slot operators   - 30%
• Horse racing purses   - 6%
• Local governments where slots are located   - 5.5%
• State Lottery Commission (for admininstrative costs)   - 5%
• Refurbishing race tracks (not to exceed $40 million)   - 2.5%
• Minority and women-owned business investment fund   - 1%

The Governor hsa proposed a constitutional amendment to authorize the slot machines at the five locations in Baltimore City and in Anne Arundel, Cecil, Allegheny and Worcester counties.  He has also proposed legislation that would control the issuance of licenses and the allocation of the proceeds.

I guess I don't see slot machines as the source of all evil.  Sure, they have their problems, but so does everything.  The state already has the lottery, scratch-off tickets and keno but we still seem to be doing okay.  As I've said before, I'd be happy if we could consider slots separately from the subsidy for horseracing.  I think horseracing is fading industry.  Subsidizing it won't get more people to the tracks, it will just make the participants a little richer. 

And, as I've said before, I think auctioning off the licenses will help maximize revenue for the state and ensure that we're not just lining the pockets of the gambling industry.  I'd like to see some of the hundreds of millions of dollars spent by Marylanders on slot machines elsewhere stay here. 

Alright, I've said my piece, now to go collect my reward The Prince of Darkness - and no, I don't mean Dick Cheney.

Slots on the Eastern Shore?

On Friday, Governor O'Malley proposed a referendum on slots that would allow up to 15,000 machines in five Maryland locations.  The legislation, which appears likely to pass during the special session calls for a referendum in November 2008.  The referendum would put slots at five locations:

• Allegheny County, on state property near the Rocky Gap resort;
• Anne Arundel County, within two miles of the Baltimore-Washington Parkway;
• Baltimore City at a non-residential area within a half mile of Interstate 95 and Md 295;
• Cecil County within two miles of Interstate 95; and
• Worcester County within a mile of US 50 and MD 589.

Now this last one caught my eye; it's not that far from where I live.  Ocean Downs Raceway is in that area.

Since Governor Ehrlich first proposed slots in 2002, Ocean Downs has been one of the locations considered.  As the various proposals have come and gone, Ocean Downs has been included and then excluded.  Now it's in again.

There is concern in Worcester County that having a large slots venue in the county will increase congestion, increase crime and generally mess things up.  In Ocean City, in particular, opposition has been vehement, largely on the grounds that it would change the 'family' nature of the resort and drain vacation dollars that would otherwise be spent in the resort.

I see things differently.

Worcester county employment is heavily oriented toward summer resort activities, agriculture and construction.  The unemployment rate annually fluctuates between about three percent in the summer to well over ten percent in the winter.  The slots would provide a sigificant number of year-round jobs that would pay a decent wage.

The decent wage is important; according to the Maryland Statistical Handbook, Worcester County ranks LAST in the state in average wage per job.  The average wage here is only 58% of the statewide average.

Ocean City is a fine summer resort, but they have been complaining for several years that business there is stagnating.  Many people attribute this stagnation to the increased cost of vacationing there, particularly lodging costs which have inflated along with real estate prices.  The city and the county have recently decided to increase the room tax to attract more visitors (some sharp minds at work there). 

The establishment of a slots venue a couple miles away from Ocean City will significantly increase the number of visitors year-round, not just in the crowded summer months.  What Ocean City loses in money going to slots will be more than made up by the overall increase in visitors, particularly in the winter months when, on most days, you could shoot a cannon down the boardwalk and not worry about hitting someone. 

I'm sure the good people of Worcester County will vote against slots in the referendum next year, but I'm thinking that the current 70+% approval rating for slots in the state as a whole will lead to a win for the referendum.  In the meantime, get ready for lots of campaigning both ways.  It will be an interesting year.