Casino-expansion bill gets OK from Pa. House

AP News
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Posted: Dec 16, 2009 8:07 AM

A bill to expand legalized casino gambling in Pennsylvania received approval Tuesday from the state House of Representatives, as legislators try to resolve the final pieces of October's state budget agreement.

The vote, 103-92, came after more than 10 hours of debate over two days. Most Democrats supported it, while most Republicans opposed it.

It is almost certain to face changes in the Senate, which could vote on the bill as early as Wednesday.

The bill would raise the state's number of casino licenses from 14 to 15 and legalize table games at Pennsylvania's slot-machine casinos. Proponents say it will scrounge more tax dollars to shore up the state's recession-ravaged treasury, but opponents countered that the bill was strictly about doing a favor for the powerful gambling industry.

It also would reform the state's regulation of the gambling industry, including various provisions designed to thicken walls between the industry's influence and public officials.

Its progress is also being closely watched by Penn State and several other universities whose state subsidies are being held up by Gov. Ed Rendell. The extra gambling revenue is necessary to pay for the universities' subsidies, Rendell said Tuesday.

During House debate, supporters tried to steer the discussion to how the measure can improve the lives of people struggling to find work and get through the recession.

"Today we can help start the creation of thousands and thousands of jobs and stimulate the state's economy," said House Gaming Oversight Committee Chairman Dante Santoni, D-Berks. "The passage of this legislation allows us to raise revenues without forcing anyone to pay a dime in extra taxes."

Critics said it is unwise to finance government with gambling money, and that the bill itself was being rammed through with little public scrutiny. It also is larded with favors for casino owners and the pet causes of some lawmakers while ensuring that more families will be broken by gambling addiction, they said.

"When Pennsylvanians lose their families, and rich casino operators win, then it is the wrong policy to adopt," said Rep. Jerry Stern, R-Blair.

Changes likely to be made in the Senate include removing the provision that would allow a 15th casino license and adding a requirement that state gambling regulators allow new applications to be considered for the last existing competitive casino license that has not been awarded.

Those points of disagreement could be problematic because the potential location of a new casino is creating a clash between key lawmakers who are protecting hometown interests.

The bill is supposed to raise $320 million for the state over the first two fiscal years by imposing a 14 percent tax rate on revenue from table games and requiring the casinos to pay millions of dollars in license fees.

The state's tax rate would fall to 12 percent in July 2011, and the proceeds could eventually help pay for public schools once the state's drained budget reserve returns to $750 million.

In addition, casinos also would have to pay a 2 percent tax that would end up funding local governments, development projects and institutions, such as the Commonwealth Medical College in Scranton, the Carnegie Library of Pittsburgh, the Convention Visitors Bureau of Greater Monroeville and the Lower Bucks Hospital.

A key reform in the bill is the reinstatement of a ban on cash contributions to political causes by gambling industry executives and investors. In April, the state Supreme Court struck down the five-year-old ban, which had been considered a key bulwark against the political influence of the gambling industry.

The bill would toughen the Pennsylvania Gaming Control Board's "revolving door" policy to require top and midlevel employees to wait two years, instead of just one, before leaving the agency to go to work in the industry.

It also would prohibit convicted felons from owning or holding a top management job at a casino. Under current law, a convicted felon can own a casino or hold a top job there if 15 years has elapsed since they completed the sentence.