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Slots middlemen:Another bad idea from Harrisburg is looking worse

The plan to create an artificial — and unnecessary — layer of business by mandating that forthcoming casinos in Pennsylvania must buy slot machines from state-based middlemen sounded like a bad idea when it was introduced in 2004. Earlier this month, it sounded like an even worse idea after the public learned that one of the recently approved slots distributorships was partially controlled by a well-connected lobbyist in Harrisburg who listed his two minor children as principals in the company.

A prime example of the flaws in the state's gambling laws is the legislation that requires that Pennsylvania casino operators buy slot machines from state-based distributors, rather than direct from the manufacturers.

This creation of a mandated middleman does not exist in any other state with slot-machine gambling. Its supporters say it is intended to create jobs in the state, but the reality now emerging is that a few well-connected people are going to make money from these distributorships, which serve no legitimate business purpose.

It is, at best, a make-work program. But it already is becoming clear that it is not a make-work program that will help many people. Only a relative handful of jobs will be created by these distributorships, and most of the profits, made from simply slapping an extra charge on the slot machines purchased from manufacturers before being sold to the casino operators, will go to the owners of the businesses.

So far, the owners of the approved distributorships are not average Joes. They include a former lieutenant governor, the former Allegheny County executive, the CEO of Pittsburgh's public television station, a former Pittsburgh city councilman, and a powerful Harrisburg lobbyist from Philadelphia who also is a former state representative.

The latest bit of disturbing news surfaced earlier this month when one of the limited number of slots distributorships was given to a newly formed company that lists among the owners "minor child 1" and "minor child 2."

Those two kids, it turns out, are the children of Stephen R. Wojdak, 67, a powerful Harrisburg lobbyist who has contributed nearly $70,000 to political campaigns so far this year. His contributions totaled $113,000 last year.

The reason for Wojdak's kids being listed is that state law says nobody involved in gambling can make political contributions. The state gambling board defended awarding the distributorship to the group including Wojdak's kids by saying the lobbyist would not "directly benefit" even if his kids would.

Late Friday afternoon, it was reported that Wojdak had decided to remove the trust for his children as an owner of the slots distributorship.

While most of Harrisburg seems to be turning a blind eye to the conflict of interest here and the potential for corruption, graft and influence-peddling, at least one person wants to clean up Pennsylvania's emerging gambling industry. State Sen. Jane Orie, R-McCandless, soon after hearing about the kids loophole, asked Gov. Ed Rendell to call a special session of the legislature to deal with the issue and close the loophole.

Rendell refused.

His spokesman said that if there is a problem with the law, lawmakers can do it when they return from their summer recess in September.

That's right. But most lawmakers don't seem to have a problem with the many opportunities for the well-connected to make money through loopholes in the state's flawed gambling laws. Voters have to wonder why.

The same kind of outrage that was triggered by the controversial pay-raise vote of 2005 should force lawmakers to clean up the gambling laws.

The best way to stop corruption would be to scrap slot machines completely, or limit them to a few horse-racing tracks, as was the original plan.

Legalized gambling in Pennsylvania looks more and more like a sucker's bet — at least for the average citizen. A few casino operators and a handful of well-connected owners of distributorships will do well with expanded gambling in Pennsylvania. And somehow, it probably will turn out that some folks in Harrisburg will benefit, directly or indirectly. But average citizens will not be helped, even when or if a small cut in real estate taxes happens.

Short of scrapping the whole idea, the state legislature should drop the middleman provision (as Orie has proposed) and cancel plans for state-based distributorships.

The more people learn about how the state is handling the expansion of legalized gambling, the more troubling it looks.

A professor of public policy at the University of Nevada at Las Vegas painted a pretty clear picture of the mess in Pennsylvania when he said, "It's a political nightmare because of the excessive greed. Politicians see quick money."

Members of the state legislature should be ashamed at how slot- machine affairs are being handled. But after last summer's pay-raise scandal, it is clear that it takes a lot to shame many of our state lawmakers.

And that's one reason why voters rejected record numbers of incumbents in the May primary — and are likely to send more sitting lawmakers into retirement in November.

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