The Regular Person’s Guide to the

Maryland Slot Machine Referendum

Assessment of Proponents’ and Opponents’ Claims

Claim 5: Slot machines in Maryland will create more jobs for Marylanders.

ASSESSMENT: TRUE.

Like any new enterprise, the new slot machine locations will create jobs.  The Maryland Budget and Tax Policy Institute has not seen any specific estimates of the numbers of jobs that will be created.  Based on American Gaming Association data on comparable states, it could be in the range of 3,000 to 6,000 ongoing jobs at the slot machine locations(1).  Construction will generate more jobs on a short-term basis.

With any economic development project, you have to think about substitution effects and multiplier effects.  Some of the spending at slot locations will displace other spending.  This could result in losses of jobs in other businesses – perhaps restaurants, movie theaters, night clubs and other leisure-time businesses.  To the extent new slot-machine jobs substitute for existing jobs, the net increase in jobs will diminish.

There is concern in some communities that competition from slot machine facilities will significantly hurt existing businesses in the areas where the facilities will be located.

On the other hand, to the extent slot machine operations do create net additional jobs, those employees will spend their incomes on goods and services, which can spin off additional job growth in the economy.  This is called the multiplier effect.

(1) Pennsylvania, with 5 locations operating in 2007, employed 3,753.  West Virginia, with 4 locations, employed 5,275.  Each had gross revenues for the year of about $1 billion – close to but below the amount projected for Maryland at full operation.

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