What Ed Said

Let's take a closer look at Gov. Rendell's assertions about legalizing video poker.

by Isaiah Thompson

In his much-anticipated budget address last week, Gov. Ed Rendell introduced something he called the Pennsylvania Tuition Relief Act, a plan which would provide tuition assistance to Pennsylvania families — and which would be paid for, he proposed, by legalizing, licensing and taxing video poker in Pennsylvania.

The plan is vague. Technically speaking, it's only a suggestion, taking up a few small paragraphs in the printed version of the governor's address. But that doesn't mean the governor didn't say some interesting things about it. In fact, he dropped some doozies. Let's review.

"I do not view the legalization of video poker as the first step in an attempt to expand gaming in Pennsylvania. I remain opposed to any such expansion, and I have said so many times."

To say, in light of his video poker proposal, that he remains opposed to expansion is either a radically unusual use of the words "opposed" or "expansion," or else it's radically misleading.

The governor has proposed that every licensed bar or tavern in the state, some 14,000, be allowed to host up to five video poker machines. That means that something like 80,000 video poker machines could be operating in the state.

When pressed, Chuck Ardo, the governor's spokesman, admits that, "Sure, it allows for an expansion — but that doesn't mean every license holder will apply."

Well, right. It means every license holder could apply. But four years after video poker machines were capped at 9,000 in West Virginia, the number of machines in the state had risen almost to the cap. With heavy lobbying coming from the Pennsylvania Tavern Association, it's hard to imagine demand for the machines being lukewarm.

"What I propose is to take control of this industry, so that we can remove unscrupulous characters."

The removal of "unscrupulous characters," is, of course, one of the main reasons casinos are subjected to the scrutiny of the Pennsylvania Gaming Control Board (PGCB), which was created to help establish and regulate all casinos in Pennsylvania.

Their track record has been less than stellar. The PGCB recently failed to note that Foxwoods executive Michael Thomas had a past felony drug conviction, and had to suspend the license of Mount Airy casino owner Louis DeNaples, after he was indicted on perjury charges.

That may be why Rendell has indicated that, under his plan, the video poker machines would be regulated not by the PGCB but by the Department of Revenue in conjunction with the state police.

Whatever its flaws, though, the PGCB has in place a massive apparatus for regulating slot machines in casinos. Besides running its own testing facility, the board deploys field teams to monitors casino floors, examines monthly reports detailing the payout schedules of every machine in operation, and requires access to video cameras capable of monitoring every slot machine in operation.

Whether any other agency in the state is ready to undertake the monitoring of tens of thousands more machines — located not in a handful of casinos, but in bars across the state — is a question of real concern for some legislators.

"We had a flawed and fast-tracked process [regarding casinos]," says state Sen. Larry Farnese, "and a gaming board that has not paid enough attention to the kind of people who operate casinos. Those are serious concerns, that we have to focus on before we can even turn the page on the next chapter in gaming."

Rep. Paul Clymer goes a step further: "Do you think the state police will be able to keep track of every secondary level of ownership of these licenses?" he adds. "The governor says he wants $550 million a year — that's 50 percent [of gambling machine revenues] ... about $1.1 billion flowing across the commonwealth. You don't think that's attractive to organized crime?"

"In Oregon, the state's decision to regulate video poker has generated more than $400 million annually in state tax revenues, which help run Oregon's acclaimed public school system."

HALF OFF DEPOT

Why live life at full price?

Here's a different statistic: Five years after video poker was legalized in Oregon, the number of gamblers-anonymous groups grew from three to 30, according to a report prepared for the Oregon Council on Problem Gambling, a group funded largely by the gaming industry. A study conducted in South Carolina, where video poker was legalized and then, later, banned by the state supreme court, found that the number of gamblers-anonymous groups dropped from 32 to 11 six months after the machines were outlawed; calls to the state's gambling hot line in one county dropped from 200 to zero.

These figures are cited frequently by Earl Grinols, a prominent scholar on the social costs of gambling, who accepts funding from neither pro- nor anti-gambling interest groups. When told that Pennsylvania was considering legalizing video poker machines, his response was quick and to the point.

"What little I know can be said very quickly. ... It is the video machines that cause the greatest problem and the quickest onset of [gambling addiction]. There's been at least one or two research papers that have proven this, and others have documented it."

Ardo points out that the state does have a program in place for treating gambling addiction. And he's right. But the program is tiny: It receives only $1.5 million annually from gaming revenues. And while casinos are required by the PGCB to maintain self-exclusion programs, by which an addicted gambler can have him or herself voluntarily banned, it's not clear what preventive measures would be implemented — or could be enforced — in local bars.

Ardo points out that so far, he's seen no evidence that the amount is insufficient. Neither he nor Rendell has said whether the program would receive any additional funding, should gambling be, um, expanded.

"We'll have to see what the legislation actually says," he says. "The governor would like to see a good bill that's got bipartisan support and that he can sign with pride."

(isaiah.thompson@citypaper.net)