Slots for state dollars

Local residents hoping to hit the slot-machine jackpot currently have two choices: Drive to Atlantic City or West Virginia.

On any given night, almost half of the license tags in parking lots of West Virginia gambling establishments are from Pennsylvania, said Gary Tuma, spokesperson for state Sen. Vincent Fumo.

"People can debate the social costs of gambling, but one thing is clear: There are already many Pennsylvanians who drive across the border to New Jersey — and at the other end of the state to West Virginia — to play slot machines," he said.

Hence, Tuma added, the reason for bringing slots into Pennsylvania is clear.

"The strongest argument for doing this is to keep the money here in Pennsylvania and use it to reduce the property tax and wage tax of our own citizens," he said.

Though it’s not a done deal yet, Tuma and other state officials are confident that Philadelphians soon won’t have to drive across state lines to pump quarters into slot machines and hear the "bling, bling, bling."

Last week, Gov. Ed Rendell and leaders of the Pennsylvania General Assembly said they were close to an agreement on a bill that would legalize slot-machine gambling here. The outcome is promising, Tuma said.

"There is commitment among lead people in each caucus to iron things out. The next important step is for a representative from the administration and someone from each of the four legislative caucuses to sit down and hammer out final details."

According to the spokesperson, the bill could become law by June 30.

Provisions of the bill would allow for 12 or 13 slot parlors in the state — seven or eight of which would be at racetracks, including the six already-licensed tracks, Tuma said. Philadelphia Park in Bensalem — home of hero horse Smarty Jones — is already one of the licensed venues, as is the soon-to-be-opened Chester Downs in Chester, he added.

The slot parlors initially would open with 3,000 machines apiece and then increase to 5,000 if the market dictates, according to Tuma. Philadelphia locations ultimately would host 5,000 machines each.

In addition to the main slot parlors, there would be a provision for two or three additional resort licenses. The Poconos or other state resorts could accommodate up to 500 machines, Tuma said. Use of the resort slots would be restricted to guests only, he added.

Once the bill becomes law, location of slot parlors would not be left up to lawmakers but to a seven-member state gaming board. Four board appointments would come from the House and Senate caucuses, while Rendell would get three appointments, including the chairperson.

In addition to deciding where Pennsylvanians will go to play slots, the board also would be responsible for evaluating applications and awarding licenses.

Tuma said it’s too early to speculate on locations, but a possible site in South Philly could be near the stadiums.

Statewide revenue from slot parlors is expected to reach $3 billion annually, said Tuma. Thirty-four percent of the profit — $1 billion — would go to the state, the spokesperson added. The money would be used for property tax reduction in most of the state and wage tax reduction in Philadelphia. Because most senior citizens are retired and don’t pay the wage tax, Tuma said a portion of the funds would be set aside for property tax reduction of seniors in Philadelphia.

Republican state Sen. Robert "Tommy" Tomlinson, a sponsor of the slots bill, has proposed that local municipalities get 4 percent of the cut. While Senate Democrats agreed the municipalities should get something, they believe 2 percent would suffice, Tuma said.

Along with Tomlinson, Fumo was one of the principal supporters of a bill to legalize slot machines last year.

On June 25, 2003, the Senate passed a bill to sanction slots at eight racetracks within the state. That version of the bill contained numerous provisions designed to safeguard the public from fraud and corruption, according to Fumo’s office.

The following month, the House of Representatives amended the bill to eliminate many of those safeguards — substantially weakening the ability of the state to regulate gambling, according to some lawmakers. "Senate Democrats cannot support the current version of the bill. It will be dead on arrival," Fumo said at the time.

Democrats accused the House of "bowing to the interests of track owners, without even involving our caucus in negotiations until the 11th hour, after most of the important decisions had already been finalized," according to a Fumo statement.

Meanwhile, the bill remained stalled in the House.

After six months of negotiations, the bill almost passed in December, but a handful of issues held it up yet again, said Tuma.

All along, Fumo has insisted on several stringent regulatory provisions in order for Senate Democrats to pass the bill, Tuma said.

Now, as the bill inches closer toward becoming law, those provisions remain key.

One of the requirements is a fee of $50 million per gambling license that would be payable up front and go entirely to the state, said Tuma. Another calls for a ban on political campaign contributions from anyone who has an interest in any gambling operation.

Implementation of a central control system, whereby the state could electronically monitor and shut down any machine, is yet another provision.

"It puts the state in a strong position to ensure there is no tampering with a machine," Tuma explained.

All revenue from the parlors would go directly to the state every day via electronic bank transfer. The measure would ensure that the state doesn’t have to chase after establishment owners, said Tuma. After keeping its 35-percent share, the state would redistribute the remaining funds, he added.

"Again, this puts the state in a strong position to regulate. You have to remember that this is an activity that is currently illegal. It is certainly possible to run a gambling operation cleanly.

"There is also a possibility that they could fall prey to corruptive influences," Tuma continued. "And so Sen. Fumo wants to make sure the state is in a strong position to prevent that from happening."

All bets off for horses

For a while, it looked as if horse racing would gallop into South Philly — but all bets are currently off.

In February of 2003, a group of investors — including Delaware River Port Authority Chairman Manny Stamatakis, Sixers and Flyers owner Ed Snider and New Jersey Nets owner Lewis Katz — applied for one of the remaining harness racing licenses available from the state racing commission. The group, dubbed Philadelphia Trotters and Pacers Inc., wanted to build the track at the former Navy Yard, using land recently acquired by the DRPA.

But state Rep. Bill Keller reined in the idea and introduced a bill last year reserving waterfront property for development.

In March, Gov. Rendell signed legislation that would reserve waterfront property for development. That stretch of land — 47.2 acres of ground along the waterfront immediately south of the Packer Avenue Marine Terminal — was conveyed to the Philadelphia Regional Port Authority.

–by Lorraine Gennaro