Pennsylvania Senator Discusses Plan to Legalize Slot Machines

By Bob Warner, Philadelphia Daily News
Knight Ridder/Tribune Business News

May 21–For a guy who frequently seems in battle with the news media, state Sen. Vince Fumo looks pretty comfortable surrounded by cameras and tape recorders.

The South Philadelphia Democrat spoke at length yesterday on the Legislature’s latest bid to legalize slot machines in Pennsylvania — first to a gaming-industry conference at Boardwalk Hall in Atlantic City, then to a dozen reporters.

Fumo ran through the basics of a tentative plan supported by Gov. Rendell and the pro-slot factions in Harrisburg, calling for three different tiers of slot franchises:

–Class A “racino” licenses, allowing slots to be installed at four existing thoroughbred and harness- racing tracks, two other tracks under construction, and potentially, two more tracks that have yet to win racing licenses.

–Class B “slot parlor” licenses, stand-alone facilities with no ties to horse racing. Two of these would be allowed in Philadelphia, one in Pittsburgh and another somewhere else — at least 30 miles from the nearest race track.

–Class C “resort” licenses, tied to hotels with “year-round amenities” and at least 275 overnight rooms.

Then the senator fielded questions:

QUESTION: What are the chances this plan will fly?

ANSWER: I don’t want to jinx it by saying absolutely … From our conversations with other legislative leaders and the governor’s office, I think we’re in a good position to go. … I’d say the chances are 65-35, about what I won my election by.”

Q: What still has to be worked out?

A: “Some of the fine tuning on the local share, some issues like that. I don’t think there’s anything that’s not resolvable.”

Q: The state is supposed to get 34 percent of the profits and earmark the money for property-tax reductions in most places, wage-tax reductions in Philadelphia. How will that work?

A: “The last thing we want to do is lower property taxes 20 or 30 percent and have the school districts come right back and raise them again. In Philadelphia, we’re not gonna lower your wage tax one-half to a full point, then let City Council come back the next day and eat it up. So we’re negotiating now with the administration how we’re gonna do that.”

Q. Your proposal calls for most of the licensees to pay a $50 million upfront fee — a lot less than the gambling franchises are worth, according to some experts. What happened to the idea of auctioning the licenses to the highest bidders?

A: “We’ve tried, and we don’t see that happening. There’s not enough support for it. I think mainly, the tracks don’t want to get into that. We’re dealing with such tight numbers here. The last time, we had 27 votes in the Senate, and the tracks have five or six of those votes. And the governor’s dead-set against it, so we’ve given up on that. We just want to get something done.”

Q: Black legislators have said that one slot license should go to a minority-owned company. Will that happen?

A: “We think it would be unconstitutional … Certainly, if I tried to put it through, given Pennsylvania’s General Assembly, it wouldn’t pass. There are going to be some issues in there that will require minority participation. On the Senate side, I don’t think it will be a major problem.”

Q: What are the most likely spots for slot parlors in Philadelphia?

A: Eighth and Market is already clear. You can’t have anything in the Northeast because it would be too close to Philadelphia Park in Bensalem. You’ve got a couple of places along the river — Bally owns a site, and the Sheetmetal Workers site. I wouldn’t want it much north of Washington Avenue because the infrastructure you’d need for traffic would be enormous … Maybe it could work somewhere in the stadium area.”

Q: This plan makes no provision for a franchise going to American Indians. But you still think the state should try to reach an agreement with the Indian gaming interests, provide them a license but with conditions that the state can influence?

A: “What I want is Indian gaming that’s licensed and regulated and pays taxes.. If we could give them and get them to give up their sovereign rights, that’s a good deal.”

Q: What role is Smarty Jones playing in all this?

A: “Unfortunately, not much. I do think, after we pass this, you’re gonna see Pennsylvania’s race tracks, particularly Philadelphia Park, become prestige race tracks. The amount of money that will be available to purses is just going to overshadow everything else.”

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