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House wrong on vote reversal, retaining slots supplier mandate

The state House of Representatives did the right thing early Tuesday evening in voting to end the requirement that slot machines be purchased from an in-state supplier. But about two hours later, lawmakers reversed their decision and returned to the illogical mandate that slot machines for yet-to-be-built casinos must be purchased by so far non-existent Pennsylvania-based slot machine distributors.

Of the many questionable aspects of the slots legislation — beyond the entire notion that expanded gambling will be good for Pennsylvania — is the idea that slot machines cannot be bought directly from the manufacturers, as they are in other states.

Instead, the Pennsylvania Legislature decided to create an artificial market, mandate the incorporation of slots distributors, and require that all slot machines sold in the state move through these newly created middlemen.

Like any middleman, the state-based slots distributors will increase the price of the product they sell. That's an obvious problem with the plan; the slots distributors are unnecessary, and do little more than increase costs.

The idea behind mandating Pennsylvania-based slots distributorships is a "make work" program that was pitched as a job-creation plan. But these jobs have no reason to exist, other than government fiat. The state would be better off encouraging jobs that have a legitimate economic reason for existing.

Another reason lawmakers in the House should have stuck with their first vote — to drop the slots middleman mandate — is that the jobs created and, more precisely, the money to be made from the new slot distributors will not be going to the average Joe.

The pending applications for slot machine supplier licenses feature names like Neely Frye, a former aide to state House Speaker John Perzel; former Allegheny County Chief Executive Jim Roddy; WQED Multimedia President George Miles; former Lt. Gov. Mark Singel; former Pittsburgh City Councilman Sala Udin; and former legislator and now lobbyist Stephen Wojdak.

To their credit, Roddy and Miles have pledged to donate a significant percentage of their profits to regional charitable organizations. But the list of people lining up for the limited, state-authorized slots distributorships does not look like the sort of people needing a job. The list is dominated by well-connected and already well-off people who are hoping to join the casinos in making money off Pennsylvania's losers — the people who choose to play slot machines at casinos.

Interestingly, Tuesday evening's flip-flop in the state House to retain the mandate creating state-based slots suppliers was stimulated by someone with a vested interest in the slots distributorship issue.

Rep. Curt Schroder, who sponsored the amendment to remove the in-state distributor provision, blamed the House reversal on lobbying efforts by Wojdak, the former lawmaker who now heads a Philadelphia-based lobbying and public relations company, which, coincidentally, has a connection to one of the slots distributorship license applications.

The more voters learn about the details involved in bringing as many as 61,000 slot machines to Pennsylvania, the more questions are being raised — or should be.

Slot machines will make already- rich casino operators richer, and slots will make plenty of money for a few well-connected slots distributors. Slots also will subsidize various public and private developments around the state. And maybe, just maybe, slot machines will bring some minimal reduction in property taxes — which was the purported reason Gov. Ed Rendell pushed for expanded legalized gambling in this state.

The slots legislation remains a questionable solution to property tax relief. After this week's flip-flop in the House, the slots legislation appears clearly intended to make money for unnecessary middlemen who happened to be well-connected — and have influence over lawmakers.

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