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Overdue reform effort corrects major flaws in slot-machine law

After months of behind-closed-doors negotiations, state lawmakers finally are moving forward to improve Pennsylvania's flawed slot-machine legislation. Some 30 different changes are addressed in legislation that was approved unanimously by the Senate on Wednesday. The measure now goes to the House for consideration.

Among the 30 provisions spelled out in the Senate effort were the two most widely criticized parts of the original slots law — allowing lawmakers and other public officials to own up to 1 percent of a gambling interest and the requirement that casinos buy slot machines from state-created middlemen.

The Senate-passed measure prohibits lawmakers and other officials from owning any gambling interests, and it also sensibly spells out an exception in which lawmakers might indirectly own shares of a gambling company through a mutual fund over which they have no control.

The other critical change to the slots legislation addressed in the reform package eliminates the so-called middleman provision.

Rather than buying directly from slot machine manufacturers, as casino operators in every other state with legalized gambling can do, the original slots law would have forced casinos in Pennsylvania to buy their machines from middleman companies. The slots middlemen were pitched as an economic boost to the state because jobs would be created, but slot-machine distributorships have so far been awarded to well-connected entrepreneurs and wealthy investors and the number of jobs created by the distributorships is expected to be minimal.

There is simply no reason for state government to mandate another layer of business by way of a middleman provision. The only thing such a requirement would do is enrich already well-to-do distributorship owners, and increase the costs to casino operators, which would cut into profits going to the state.

The other 28 reform provisions in the legislation include:

• Creation of a gambling crimes unit within the state Attorney General's Office and give the office jurisdiction to prosecute gambling-related crimes.

• Clarification of the state's Right To Know Law as it applies to the Pennsylvania Gaming Control Board.

• Preventing casinos that are not tied to racetracks from taking advantage of tax breaks meant to benefit struggling business zones.

• Limiting slot-machine manufacturers to providing 50 percent of a casino's machines for three years, in an effort to give smaller manufacturers a better chance of getting some of the state's business.

Other potentially controversial provisions in the reform package would remove Philadelphia's zoning authority for casinos located in the city, and give casinos a loophole that would allow smoking even if the casino is located in a no-smoking municipality. This is a notable loophole because Philadelphia and Pittsburgh both recently approved broad no-smoking laws.

This reform package is overdue, but welcome. The original slots legislation, signed into law in 2004, was badly flawed.

Some mistakes might have been expected, since slot-machine legislation is uncharted territory for Pennsylvania lawmakers. But if lawmakers would have allowed for more public input before passing the original legislation, they might have avoided some of the controversy that has dogged the slot-machine law since its passage.

The Senate has taken the first step toward improving the slot-machine law, and the House should do the same.

One change that might be warranted would be removal of the no-smoking loophole, because cities such as Pittsburgh and Philadelphia should be able to expect full compliance with their no-smoking rules. Why should these cities be forced to make an exception for casinos?

Over time, additional changes might be required, but it is appropriate that lawmakers have acknowledged flaws in the original legislation and have finally acted to fix those problems.

The House should endorse the Senate action and send the legislation to Gov. Ed Rendell for his signature.

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