|The following guest opinion editorial was
published in the Philadelphia Inquirer, the Harrisburg Patriot-News,
and the Pittsburgh Post-Gazette between August 22 and September 2,
By Sen. Robert Mellow and Sen. Vincent Fumo
When something fails to get done on time in Harrisburg, most
people usually point to "politics" as the culprit. That’s been the
conventional wisdom this year concerning the slot machine gambling
legislation, which the General Assembly has yet to approve.
This time, however, that’s a misconception. What has halted the
gambling bill so far, and has cast its future into doubt, is greed.
The House and the Senate have both passed different versions of
bills that would legalize slot machines at a limited number of
venues, and both did so with bipartisan cooperation. So "politics"
in the usual sense is not the problem.
Instead, a frenzy of unbridled business speculation that was
unleashed upon the state when a slots bill was introduced has
overwhelmed the legislative process. The alleged purposes of
legalizing slot machines in Pennsylvania – to rescue the horse
racing industry and to raise money for residential property tax cuts
– has been lost amid the lobbying of track owners. Their gold rush
mentality has prevented adoption of a system of gambling that
protects the public interest.
We would have a slot machine gambling law on the books already in
Pennsylvania if track owners had agreed to some of the same
fundamental regulatory safeguards that are already in place in other
states where gambling is legal.
Rather than accept the principle of strong state regulatory
control and anti-corruption measures, track owners have spent the
spring and summer tirelessly trying to weaken or eliminate public
safeguards. We find that unacceptable. We would rather not pass any
slot machine legislation than produce a bad bill.
Foes and proponents may debate whether or not slot machines have
a corrosive effect on society, but we would hope that everyone would
agree that if we are going to legalize gambling, strong state
regulatory control is vital to ensure its integrity, and to provide
proper return of revenue to the Commonwealth.
West Virginia, Delaware and New Jersey serve as good examples of
responsible state oversight. At a minimum, necessary public
safeguards are: a prohibition against the sale or transfer of gaming
license without state approval; thorough character and financial
background checks of slot license applicants; a prohibition against
public officials having a financial interest in a slot operation;
prevention of a "revolving door" of gaming regulators immediately
going to work for the gaming industry; daily transmission of machine
revenue to the state; a central control system that permits remote
disabling of slot machines if a problem arises; and a ban on
political campaign contributions from slot operators.
We insisted on those provisions in the Senate. Unfortunately, the
bill changed by the time it emerged from the House of
Each and every one of those basic public protections has been
adopted in other states and has been upheld in courts. Despite most
track owners operating under these regulatory controls in other
jurisdictions, they are now attempting to remove these protections
and create loopholes in Pennsylvania.
Problems can and do occur with gambling. As recently as last
year, Michigan fined a slot machine operator for software defects on
machines. Illinois had to shut down 1,600 machines when it was
discovered players could receive free credits by jamming the intake
Whether these were unintentional flaws or purposeful corruption,
weak state regulation can only be a tempting invitation to bigger
While the original notion behind the introduction of slots
legislation was to boost Pennsylvania’s existing horse racing
tracks, many have lost sight of the simple fact that there are
currently only four operating horse tracks in the state. Once it
appeared to speculators that a slots bill might be considered, there
was a stampede of people seeking to gain new horse track licenses
for the sole purpose of being eligible to receive a slot license.
There had not been a single new horse track application filed in
Pennsylvania in at least the previous 20 years.
This sudden interest in track licenses clearly has little to do
with improving horse racing and everything to do with slot
operations, and would in fact be detrimental to racing.
If nine horse tracks were permitted to operate in the state,
Pennsylvania might have a horse-track-to-population ratio greater
than any place in the world. Nine tracks would require an estimated
13,000 different race-quality horses – adversely impacting the
supply and quality of race horses in the Mid-Atlantic region.
The expansion of venues for slot operations should only be done
in a manner that maximizes revenue for property tax relief. Not only
is the random placement of slot parlors, determined by horse racing
commissions, contrary to the public’s financial interest, but it
expands horse racing beyond what is sustainable. If we are to
increase the number of slot venues to raise money for property tax
reduction, then they should be placed where they are most likely to
generate this revenue, not allocated to horse tracks not yet
Although we favor legalizing a limited number of slot parlors and
would like to see the proceeds used to reduce property taxes, we are
not so desperate for slots revenue that we will support a bill that
lacks public safeguards and could potentially hurt rather than help
the horse racing industry. While no one likes raising taxes, a
modest increase in the sales or personal income tax could provide
the level of property tax cuts that Gov. Rendell has promised the
people of Pennsylvania.
Until all track owners end their efforts to weaken the regulatory
authority of the Commonwealth over slot operations and support
important safeguards, and there is a unified commitment by all of
the stakeholders to work in the best interest of the public, the
slots bill will continue to languish.
And that is not a bad thing.
The following story appeared in the Philadelphia
Daily News, April 21, 2003:
Fumo would bar pol
donations from gambling interests
The businessmen lining up for
gambling licenses in Pennsylvania should be barred from making
political contributions - or they could overwhelm the state's
political system with their new-found wealth, according to state
Sen. Vincent Fumo.
"We've never had this kind of cash
cow in Pennsylvania," the Philadelphia Democrat told the Daily News.
"There is so much money involved, whoever ultimately gets the
various gambling licenses...will be able to exert enormous influence
over the Legislature and local officials as well."
"...We have to be very cautious about
the potential for corruption in an industry like this."
Gov. Rendell and many state
lawmakers, including Fumo, are backing proposals to permit slot
machines at Pennsylvania race tracks.
With 35 percent of the profits lined
up for the state treasury, the Rendell administration estimates the
plan would raise $300 million in the budget year starting July 1.
If the estimate is on target, it
means that the owners of 12 racing licenses would share roughly $600
million in profits every year - likely more in future years, since
the first year will face unusual start-up delays and expenses.
Already, big-time political donors
are bidding for racing licenses.
In eastern Pennsylvania, a group led
by Republican fund-raiser Manny Stamatakis is trying to get a
license for a new harness-racing track at the old Philadelphia Naval
Shipyard. His group includes paving czar Peter DePaul, who's donated
hundreds of thousands to politicians in both parties, and has
reached out for more investors, including Lewis Katz, a major
fund-raiser for Democratic candidates.
Two Indiana businessmen who'd never
previously been involved in Pennsylvania politics donated $120,000
last year to Rendell and a political action committee led by two
Rendell associates. They're hoping to build a harness-racing track
in Beaver County, northwest of Pittsburgh. Their proposed developer,
the Pennsylvania Real Estate Investment Trust, is chaired by Ron
Rubin; one of Rubin's partnerships has donated $245,000 to Rendell
alone over the past three years.
Besides slots at the race tracks,
different factions in the Legislature are also promoting riverboat
casinos and electronic Keno - a cross between Bingo and the lottery
- in Pennsylvania bars.
Fumo said he generally supports the
expansion of gambling inside the state. But any groups that get
major licenses should be prohibited from future campaign donations,
"I've received a lot of money from
these guys [people interested in gambling licenses] myself," Fumo
said. "They're writing checks like they never wrote before. But this
is one issue where I'll put on a white hat that will glisten in the
sun like a mirror...I want to make sure that once we pass the law,
it will have really good restrictions and good ethical standards."
A Daily News analysis shows that Fumo
has received at least $68,350 in gambling-related contributions over
the last two years. The figure includes donations from racetrack
licensees and applicants, their law firms and lobbyists, and
out-of-state casino interests.
Overall, gambling-related interests
have poured more than $2.2 million into Pennsylvania politics the
last two years, the Daily News found. More than $800,000 of it went