After years of fighting, slots advocates in Maryland finally hit pay dirt...

By Brad Olson

The Board of Public Works meeting in April 2008 had been very pro-forma: the Maryland governor, comptroller and treasurer had all met to go over various state matters, as they do twice each month. There was nothing in the relatively quick approval of wetland licenses, agricultural grants and open space land purchases to indicate that any animosity lay brimming under the surface.

But then Gov. Martin O’Malley did something unusual. Shortly after the meeting ended, he walked into a circle of reporters and offered an unsolicited statement a world apart from the often clipped, sunny pronouncements he routinely gave reporters after such meetings. O’Malley lit into State Comptroller Peter Franchot—whom he had only minutes before sat beside in order to move through the public works agenda—for having a “hypocritical stance” on a slot machine gambling referendum the governor had worked tirelessly to move through the legislature a few months before.

The broadside stood out for several reasons. Normally, O’Malley was careful not to elevate potential opponents by singling them out for a critique. And many believed O’Malley would take a low profile in the campaign to pass the November referendum, which legalized 15,000 slot machines in five locations across the state.

It was the opening salvo of what became a bruising political fight over the referendum—one that O’Malley and the pro-slots campaign would eventually win.

The anti-slots camp saw the governor’s comments as no accident. Days earlier, The Baltimore Sun had run a front-page story highlighting a rift on their side over Franchot’s role. Some longtime anti-gambling activists believed Franchot should lower his profile.

And on that very day, the anti-slots camp had planned to officially launch their campaign in an event at a Methodist church in Annapolis, complete with a catchy “Web ad” and an assortment of anti-gambling advocates, religious leaders and state political figures, including Franchot.

Whether or not O’Malley meant to intentionally isolate Franchot and exploit a growing divide among the gambling measure’s opponents, his comments worked magic on the press corps. Stories in The Washington Post and Baltimore Sun focused more on the tension between the two elected officials than on the message of the anti-slots campaign.

It was an auspicious prelude to the six months that would follow before Election Day, as the pro-slots side, backed by the governor and a vast coalition, kept their opponents constantly on the defensive and finally put to rest a question that had vexed Marylanders for years.

The 59-to-41 percent margin by which the referendum passed was extraordinary not just because it brought slot machines back to a state that had banned them 45 years earlier— but also because two-thirds of state ballot initiatives that sought to expand gambling have failed in recent years.

Sure, the pro-slots side had plenty of advantages, including the backing of O’Malley’s political machine, an advantage in early polls and a backdrop of years in which voters had been barraged by the state’s previous governor, Republican Robert Ehrlich, who strongly believed that slots were a key solution to Maryland’s longstanding budget shortfalls.

But they also had vulnerabilities, the most serious of which included potentially devastating fundraising challenges, a message that was harder to reduce into sound bites than that of opponents and a perceived organizing disadvantage. The pro campaign overcame those challenges through methods both traditional and unusual: sticking to a consistent message with no histrionics, lining up just about every institutional endorsement possible, using those organizations as the campaign’s voice and initiating a massive organizing effort before hitting the airwaves.

A Long-Awaited Vote
It’s hard to overstate the stranglehold slots have had over the Maryland legislature. Year after year, the question of using money from the machines to plug budget shortfalls and prop up the state’s flagging horse racing industry has risen to become the most burning matter weighed in the State House. Yet it failed repeatedly.

Not until late 2007, when O’Malley called a special legislative session aimed at closing a $1.7 billion budget shortfall, did lawmakers finally put the matter to rest by letting voters end the deadlock.

Maryland’s state Senate president and state House speaker worked with O’Malley to a degree unusual for such powerful politicians. And they lobbied hard, twisting arms and spending an enormous amount of political capital. After a host of marathon committee meetings and passionate debates, slots won out by only the slightest of margins. Voters would make the final call.

Almost as soon as the pro-slots campaign formed, led by Craig Varoga and George Rakis of Independent Strategies, they confronted a severe cash shortage. Two race track owners, who stood to gain licenses for slots emporiums if the referendum passed, were balking at how severely the legislation would limit their profits.

They held out on donations early on, and a story about their reticence in The Baltimore Sun practically shut down fundraising for six months. That meant things like buying voter rolls and using high-end services like voter modeling would have to be done later.

“For Maryland, For Our Future,” as the campaign was officially known, also had to be constantly wary of the possibility that a gambling interest from neighboring West Virginia, Pennsylvania or Delaware—states that had already legalized expanded gambling in recent years—would step in to quash potential competitors.

Numerous other gambling ballot initiatives all over the country had failed for that very reason, according to an analysis by the National Institute on Money in State Politics. A vast majority of the money expended on both sides of the campaigns has been from gambling interests, many of which were pitted against one another.

The greatest threat to Maryland’s pro-slots campaign came from Penn National Gaming, operator of the most profitable racino in the country in Charlestown, W.V. It was a mere 45 minutes from a potential Maryland slots location near Cumberland and less than three hours from sites in Laurel and Baltimore that gambling analysts expected to be the state’s most profitable.

The possibility of money from Penn National flowing to the Maryland anti-slots campaign kept the pro side constantly vigilant, especially since reporters covering the campaign wrote stories indicating that at least one anti-slots organization privately admitted they were open to gambling money.

Later, when it became clear no money was forthcoming, “Marylanders United to Stop Slots,” the group’s official name, disavowed themselves of any gambling contributions. To some, the move that came off as craven after reports that they had not ruled out the idea early on.

Though the early campaign was a struggle, the complaints of track owners and early fundraising struggles also came with an unexpected benefit: It brought credibility to the message of the pro-slots camp. Registered voters might hold their nose when they cast ballots to expand gambling, but because of the legislation it would be harder for them to believe slots would enrich gambling impresarios.

From there, the pro-slots camp focused strictly on the state budget: Without slot machines, deeper cuts would be inevitable, they said, cuts that far outweighed any ills that would spring forth from gambling addictions. More than two-thirds of the money the state would take in was earmarked for education, and the campaign reinforced that message over and over.

The same refrain has been used in just about every pro-gambling campaign, from state lotteries to fullblown casinos. But a sudden back-drop of harsh budget cuts from the regular legislative session and an economic crisis that seemed to be spiraling out of control lent the argument added weight in Maryland.

“We knew from the beginning that they would characterize us as the bad guys from out of state, the big, bad gaming industry that will have secrets and hide things,” says Independent Strategies’ Rakis, who lives in Maryland. “So we decided to be open to all scrutiny and have an open, honest dialogue.”

That professed openness was also backed up by an avoidance of overly emotional pleas for slots. Voters would be smart enough to see through them, they reasoned, so they frequently used the words “honest” and “honorable” to describe people on either side of the debate and largely avoided the personal barbs that had kicked off the campaign.

As pro-slots campaign officials expected, the rhetoric of the anti-slots camp was almost always cloaked in moral terms: Words like “evil” and “predatory” and “sleaze” were common, as were personal attacks and an appeal to voters not to “trust Annapolis.” That strategy didn’t appear to sway swing voters.

“Clearly, the presidential race showed that the mood of the country was that people wanted solutions,” Varoga says. “That’s why Obama won. He ran a positive campaign full of solutions.” The failure of the anti-slots camp to come up with a viable solution allowed the pro side to take up that mantle.

Building Support
The message was also reinforced by surrogates who grew in number as the campaign progressed. From the outset, the pro-slots campaign bolstered their budget-driven message by selecting a chairman who clearly represented substance over style. Fred Puddester, a longtime state budget guru who now works as financial administrator at The Johns Hopkins University, was a hard spokesman to impeach when he declared the state’s dire need for slot machine revenue.

Over time—and not without a little arm-twisting—the pro side lined up nearly all the major institutional powers in favor of their cause: all but a few of the statewide trade unions, the Maryland Chamber of Commerce and the Maryland Association of Counties.

Perhaps the most important endorsement was that of the Maryland State Teachers Association, which had not come out for slots in previous years. Teachers were concerned that if Maryland had to face draconian budget cuts, the responsibility for pension contributions would be pushed from the state to local municipalities. Slots, while not an ideal way to fund education, would prevent what they saw as a terrible possibility.

The endorsements were key in two ways: First, the endorsers— not O’Malley—became the primary voice for the campaign, an important development since the pro-slots camp would need Republican votes to win.

And second, with the endorsements came a lot more money. The final tally, released in finance reports at the end of the campaign, showed that pro-slots forces had raised more than $7 million, versus only $940,000 for the opposing side.

A Cautious Roll-Out
With that kind of money, the pro-slots campaign could have gone on the air immediately. But instead, they decided to build organizational prowess, hiring Maddy Melton of Field Strategies. Melton recruited college students to knock on doors and bring the message to voters one-on-one. Rakis says his organization field-tested the message frequently to see what was resonating and what wasn’t. They made some modifications and constantly trained and retrained both the students and surrogates with highly-tested talking points.

By the time they went up on the air with TV ads, produced by David Dixon of the Dixon/Davis Media Group, many voters had already discussed slots in their own homes. The need for slots revenue was easier to convey in the spots, which featured members of the various groups that had assembled behind the campaign.

At the same time, the organizing prowess of the churches never really materialized, according to officials with the antislots campaign. In this case, at least, the power of the pulpit may have been moot.

As endorsements grew on the pro-slots side, Franchot became increasingly isolated. He continued criticizing the motives and judgment of every organization that came out for slots. The pro-slots campaign attempted to exploit his role, seeding letters critiquing him that led eventually to press conferences in which the state comptroller said he was being “swift-boated.”

Once again, on the eve of the election, stories focused on division over Franchot’s role rather than the last-minute battle to win voters. His support had been a two-edged sword, campaign operatives say, since his high Democratic profile kept Republican lawmakers who had voted against the referendum and others who feared coming out against O’Malley from coalescing with the anti-slots camp. But without Franchot, say campaign officials, they wouldn’t have come close to the nearly $1 million they were able to raise.

Money from outside gambling interests never materialized. Penn National decided to support the referendum in the end and is now seeking its own slots license in northeastern Maryland.

By the time voters went to the polls, they were besieged by daily media reports of an economic crisis that extended from banks to their own homes. In the past year, they had endured tax hikes of more than $1.3 billion, state budgets had already been trimmed by more than $1 billion, and state and local governments were still reeling.

The slots referendum carried by an 18-point margin, winning every Maryland county. Pollster Fred Yang of the Garin-Hart-Yang Research Group says the campaign was prepared for their numbers to dip, but they never really did. Anti-slots campaign officials look back and can only see that the deck was stacked against them. But pro-slots officials say they won simply because they succeeded where most campaigns to expand gambling fail: They convinced voters that using money from slot machine gambling to fund education was actually in their best interests.

“We took it out of the political realm as much as we could,” says Steve Kearney of KO Public Affairs, a communications consultant who began working for the proslots camp shortly after he left Gov. O’Malley’s side. He was the governor’s longtime communications director. “We brought together a left-right coalition and let the political voices recede into the background. That helped drive the message that this is about the choices the state had to make and was the best way to fund all the things that are most important.”

Brad Olson covered the slots campaign for The Baltimore Sun. He is now a political and government reporter for The Houston Chronicle.