Betting on gambling


Illegal video poker machines are nothing new. For decades, they have operated out of plain view, relegated to dimly lit back rooms or hidden behind curtains in corner bars.

Now some politicians are considering telling bar owners to bring their machines into the open, but give the state its share.

The House Liquor Control Committee approved legislation last week that would legalize coin-operated video gambling machines in taverns and liquor-licensed restaurants and hotels.

The bill was introduced by state Rep. Paul Costa, a Democrat from Allegheny County, and cosponsored by Rep. Robert Donatucci, co-chairman of the liquor control committee.

"The polls are showing, even in districts that are ultra-conservative, the people are favoring gambling," Donatucci said. "Not because they want to do it, but because they know it is being done [illegally and in neighboring states] and we’re losing revenue."

The legislator estimated video gambling could generate nearly $2 billion in revenues from the 18,000 retail liquor licensees in the state. The money would be split so that the business owners, the state and city each would receive a 30-percent share. The remaining 10 percent would cover administrative costs and fund counseling and education programs for individuals with gambling addictions.

Philadelphia, with more than 2,000 liquor licenses, stands to receive nearly $25 million, the liquor control committee projected.

Donatucci said illegal video gambling machines — offering games like poker, blackjack, keno and bingo — already permeate South Philly’s bars and restaurants. He estimated four out of five establishments have such machines, and said he has heard some take in as much as $2,000 a week.

"They are there now," he said, "and we’re not getting our cut."

When legalized, this form of gaming is commonly referred to as "convenience gambling."

Eight other states currently allow some form of convenience gambling: California, Louisiana, Montana, Nevada, New Mexico, Oregon, South Carolina and South Dakota. Six other states have considered legalizing it in the last year and each bill has been defeated, said the Rev. Tom Grey, executive director of the National Coalition Against Gambling Expansion.

NCAGE is an anti-gambling organization based in Illinois. Grey was in Pennsylvania last week rallying opposition to Pennsylvania’s proposal to allow slot machines at horse racetracks.

Video gambling "bleeds you slowly," the minister said, because a player does not lose all his money in one game, but ultimately the odds favor the house.

"At the end, the machine gets it all," Grey said. "It’s just that you’ve had the chance to hear bells and bongs and action."

He also questioned whether legalizing video gambling would eliminate illegal machines, noting that creation of the state lottery has not wiped out numbers runners.

Tom Shaheen, vice president of the Pennsylvania Family Institute in Harrisburg, agreed. PFI is a Christian organization also opposed to expanding gambling in Pennsylvania. He called convenience gaming the "most addictive form of gambling," which will be fed by the prevalence of machines.

"Whether it is gambling or these type of machines …" Shaheen said, "what ends up happening is you introduce new people to gambling and the illegal machines stay around anyway."

Congress’ General Accounting Office released a report on convenience gambling to the U.S. House of Representatives in October 2000. It examined the social and economic effects of such gaming on communities in South Carolina, Oregon and Montana.

The results were mixed.

The GAO determined legalized video gambling did raise tax revenues and create some jobs, but had no significant impact on the unemployment rate.

At the same time, government officials in those two areas said they felt convenience gambling "created a negative environment and stigma in the communities," which chased away new businesses, according to the report.

The report determined no link between convenience gaming and the number of people who had filed for bankruptcy in those areas, nor did it find a connection to increased social problems, such as substance abuse and personality disorders.

Donatucci knows it will be difficult to pass the video gaming legislation through the Republican-controlled General Assembly — especially after the body reluctantly passed the slot machine bill — and Gov. Ed Rendell has not given any indication he would support the measure if it reaches him.

Rendell likely would want to see his slot machine bill enacted before any other gambling legislation. Donatucci believes his bill’s best chance to be passed is for it to be tacked on to the slot machine legislation.

"You are not going to go back to these members who are on the fence and get them to vote twice [in favor of] gambling," he said.

After passing through the House Liquor Control Committee, the convenience gaming bill goes before the whole House, unless Speaker John Perzel bounces it to another committee for a vote.

"Philadelphia is going to get a windfall from this," Donatucci said. "In the next five years our financial future doesn’t look the best. If we don’t get some kind of help from Harrisburg, we are going to have a property tax increase or a school tax increase."