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The Fix is In, Part One: How casinos hijacked the House of Representatives last night - and intend to do it again tonight.
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The Fix is In, Part One: How casinos hijacked the House of Representatives last night - and intend to do it again tonight.
Last night, the State House of Representatives passed Senate Bill 711, which legalizes tables games at like blackjack and poker at Pennsylvania casinos.
Of course, that's not all it does â not by a long shot: lend me your eyes and ears, readers, and I'll tell you all about it.
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Part One: The Great Santoni
Table games have been on the docket for some time. Although they still hadn't been legalized in the state, Governor Rendell included somewhere between $200 and $300 million in projected table game revenues in the state budget.
Which put considerable pressure on the legislature to pass the measure â pressure some members of the legislature and the Governor amped up still more by holding hostage funds allocated for state schools and other institutions.
But the vote on SB711 had been getting delayed, over and over again â perhaps because the votes weren't there, yet â and debate didn't begin until early last week.
But no sooner had debate started, than the debate was cut off by Democratic leaders (generally, Democrats have favored this bill and Republicans have opposed it), who, last Thursday, abruptly vanished from the House floor and left for the weekend.
The reason soon became clear â on Friday evening, the House intranet revealed a new amendement to SB711, introduced by Gaming Oversight Committee Chairman Dante Santoni.
It was an omnibus amendment, combining elements of other proposed amendments and a slew of clauses of mysterious origin. One important clause ensured that this amendment obliterated and replaced all previous amendments.
In other words, it wasn't just an amendment to the bill - it was the bill itself.
In fact, Santoni introduced not just one but four such bills - almost identical, but containing tiny differences that made it necessary for any critical legislator to read not just 130 pages of amendments in two days, but quadruple that number.
Nonetheless, when debate began Monday afternoon, legislators had identified all sorts of questionable provisions in the bill.
It's important to remember that table games were never expected to bring in much money: $200-$300 million isn't much next to the state budget. So why the hard push to get this legislation passed?
One answer may be that while it doesn't do much for state coffers, the bill is the realization of all sorts of favors - unrelated to table games, in many cases â to both the casinos and the loyal legislators who do their bidding.
Here are a few examples:
- The bill levies a tax of only 14% on table game revenues â compared with 55% for slot machines. A license to operate table games would cost only $16 million â despite studies presented to the House which suggested that such licenses might be worth more than $50 million.
Why tax table games at such a low rate - especially since legalized gambling is supposed to be a means of raising revenue for the state? Representative Paul Clymer, long opposed to the expansino of gambling in Pennsylvania, points out that these figures - the 14% and $16 million â are familiar: they're the same figures suggested by the Innovation Group, a consulting firm tied to the gaming industry.
""You can see the voice and face of the casinosâ influence in this legislation â they know what they want,â Clymer said on the House floor. "We're giving these licenses away."
- Although gambling has been billed as property tax relief, the bill pays money first into a state "rainy day" fund, which might not fill for several years. Only then would the revenues g to property tax relief.
The bill does, however, contains sundry earmarks for pet projects and unnamed entities around the state. Representative Mike Turzai read aloud form a list compiled by his staff on Monday night. It included community colleges, tiny municipalities, a particular medical school (on whose board sits Louis DeNaples, indicted last year for allegedly lying about mafia ties to get a casino license; he was cleared when he agreed to cede the business to his daughter).
See a list of the earmarks compiled by the Commonwealth Foundation.
None of these pet projects are necessarily bad - but they're almost certainly a favor to someone, for something: very possibly to the Democrats kind enough to get behind Santoni's amendment.
- The bill contains a provision that would allow Foxwoods to extend its license beyond the deadline currently provided for in state law. Why would such a favor be extended to Foxwoods, which has been so far unable to get the financing to open up shop on the waterfront?
- The bill allows casinos to extend credit to patrons â a practice that was explicitly banned in Act 71, the original gaming law (passed in the middle of the night with no debate) that brought slots to Pennsylvania. The gaming industry has argued that credit lines are necessary to making table games work â why, then, does this bill allow the casinos to extend credit to slots players as well?
The granting of credeit by casinos allows the casinos to pursue their money beyond the walls of the casino â as evidenced by cases in Connecticut, where Foxwoods has taken out liens against debtors and pursued their debts in court.
All these provisions and many, many more â some of which we won't find out about until later, undoubtedly â had been rolled into one big, fat amendment at the last minute by Representative Dante Santoni.
It was a risky move, in a way: Santoni had alienated some Democrats with his bill. But the calculation was clear: Santoni figured he - and his unknown collaborators - had worked enough favors into the bill to please enough Democrats to pass the thing.
And it worked.
Next post: how the Santoni amendment was passed, and how further amendments aimed at protecting gamblers were derailed by an 88-year-old man and an obscure parliamentary maneuver -- and what it all means for us, tonight.
[...] Democrats â the same who stuffed the bill with earmarks and concessions to the casinos (like letting them extend credit to slots players), rammed it through the House and voted to cut [...]
[...] Thompson’s coverage of casinos in Pennsylvania and Philly might also be relevant to readers in PA and Ohio. You can read some of that coverage here. [...]
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