The early success of Pennsylvania slots parlors has energized an
influential lawmaker who wants to bring table games next to the state
– and do so soon.

At a hearing in North Strabane of the House Gaming Oversight
Committee yesterday, Majority Leader Bill DeWeese, D-Greene, touted his
legislation to broaden the state’s gambling options.

The expansion beyond slots, not surprisingly, was embraced by
Pennsylvania racetrack casino operators who say they need it to compete
with other states that offer the full gambling menu. West Virginia
racinos are adding the table games this fall.

Mr. DeWeese and other proponents acknowledged it may be too soon to
get Pennsylvania lawmakers to approve table games in the 2007-08
session, but by the same token, opponents conceded that the new
legalization appears to be more a matter of “when” than “if.”

“I do think [table games are] coming,” said Rep. Kerry Benninghoff,
R-Centre, a self-described gambling opponent on the committee. “I’m not
a fan of the industry, but it’s a matter of doing it smart, making it a
win-win” for both the state and casinos.

As at hearings near the four other racetracks that added slots
parlors since late last year, the gaming committee members heard praise
for the new jobs, government revenues and minimal problems associated
with the casinos. The Meadows Racetrack & Casino opened June 11 in
Washington County, and township officials testified that it has been
everything promised.

Bill Paulos, an executive of The Meadows’ Las Vegas-based parent
firm, said the temporary casino has collected more than $51 million in
losses by slots players, with nearly $30 million of that going to state
and local governments and the horse-racing industry.

The revenue and jobs at The Meadows will increase greatly with
completion of a permanent casino and racing facility in early 2009, he
noted. He said the boost would be even greater if the facility can
include about 40 tables for poker, blackjack, craps and roulette. The
new building will have room for those on the assumption they will be
allowed eventually.

“It’s the obvious move,” Mr. Paulos said of legalized table games.
“We’re being attacked by West Virginia, and now’s the time to do it …
as we expand.”

Mr. DeWeese told committee members that discussion of the issue is
“probably only in the second inning,” with much debate ahead before
passage is a possibility. He noted there were insufficient votes to
include table games as part of the 2004 gambling legislation, but that
could change because of the early experience with slots.

“The reaction among the wagering public is favorable, and the dollar yields are quite robust,” he said.

At the same time, he conceded that Gov. Ed Rendell’s lack of support
for table games until there’s more state history with slots is a
“tangible impediment.”

Pennsylvania has legalized slots in as many as 14 locations, but thus far only five at racetracks have opened.

“I’m just trying to generate momentum, to put heat and light on the
issue. … It’s very important the conversation take place,” the House
leader said, expressing hope his bill will receive consideration this
year or next.

A key part of the debate, highlighted yesterday by Mr. Paulos and
Robert Soper, president of the Mohegan Sun at Pocono Downs racino, is
the tax rate that would be applied to table games.

Casinos typically earn less revenue from table games than slot
machines, although their costs of running the tables are higher because
of the number of employees that are needed. It’s thus commonly
discussed that the tax bite from new games would have to be less than
the 55 percent rate on slot machines.

West Virginia set a 35 percent rate for table games, lower than it
uses for slots, and Mr. DeWeese’s legislation proposes a 34 percent
rate. Mr. Paulos said the rate should be no higher than 20 percent, and
Mr. Soper said anything above that would limit what casinos would offer.

Jim Pappas, executive director of the Council on Compulsive Gambling
of Pennsylvania, told the committee that it should not consider newly
legalized gambling without additional funding and programs to combat
addiction problems. He said the state has been slow to undertake such
efforts using the $1.5 million appropriated in the original legislation.

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