Progress for PA slots

The Pittsburgh Post-Gazette has reported that the Pennsylvania state Senate voted to make a major change in the 2004 law that legalized slot machines, eliminating a requirement for middleman companies called slots suppliers or distributors. The bill must now go to the House, where it could be passed by Friday. If so, the process to license racetracks for casinos could move forward.

According to the Post-Gazette, the move to get rid of suppliers was approved Tuesday night in a 29-21 vote. Sen. Jane Orie, who led the measure, called slots suppliers "an unnecessary layer of bureaucracy'' between casinos and slot machine manufacturers.

Moreover, Ms. Orie said, requiring suppliers only benefits politically well-connected people. "No other state that has legalized casino gambling requires casinos to use a middleman to buy slot machines from manufacturers. It is very simply a way for those with influence to buy their way into the process."

Sen. Rob Wonderling, R-Montgomery, said suppliers were "artificially created middlemen that add nothing to the end product [of slots]. It just provides insiders with a chance to gain wealth and opportunities.''

Sen. Vincent Fumo (D-Philadelphia) argued unsuccessfully that supplier/distributors would be Pennsylvania-based companies offering jobs to state residents. He said eliminating them would benefit out-of-state casino owners and slots manufacturers.

The Post-Gazette story added, "The House voted two months ago to get rid of suppliers, but than flip-flopped under pressure from lobbyists for some of the would-be supplier firms."

If the House approves Orie's bill, it goes to Gov. Ed Rendell. At a meeting with Pennsylvania horse racing leaders held on Monday in Harrisburg, Rendell said he believed the measure would be passed, paving the up to now rocky road to issue conditional licenses to the racetracks.

According to the 2004 slots law, casinos can't be licensed until at least 90 days after the slot machine distributors have been licensed. The Pennsylvania Gaming Control Board has been under pressure to start licensing the supplier/distributors so the first casinos, at six state racetracks, can be licensed by the fall.

The Senate's vote to eliminate suppliers came at a crucial time because the gaming board has said it might begin to issue supplier licenses today, at a meeting to be held in Harrisburg.

Board Chairman Tad Decker warned recently that if supplier licenses aren't issued by June 30, there could be a months-long delay in creating both the suppliers and the slots casinos. That's because a separate state agency, the Independent Regulatory Review Commission, may have to get involved with drafting regulations the gaming board will use for the supplier licenses.

In another development, Fumo, a leading proponent of casinos, added an amendment to the bill passed Tuesday night that would require casino operators to contribute four percent of their gross terminal revenue to a new fund to pay for casino-related work by the state attorney general and county district attorneys. The additional requirement is likely to cause outcry from casino owners, who already have complained about the 55 percent tax on casinos. Orie said she hoped that additional four percent requirement would be removed in the House, and the bill returned to the Senate for approval.

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