HARRISBURG, Pa. (AP) When Pennsylvania legalized slot machines in 2004, the politicians who wrote the law extended a lucrative, but limited business opportunity.
They put an indelible stamp on how the industry would grow in Pennsylvania — dictating parameters for where casinos could be built and creating a regulatory board of political appointees with unusual veto powers.
Recently, a state senator tasked with overseeing state gambling regulators asked whether Gov. Ed Rendell and a top House Democrat went a step farther on a financially troubled Pittsburgh casino project.
Did they twist arms, make promises or exert influence to get their way on a controversial rescue plan that will test the judgment of the Pennsylvania Gaming Control Board? That was the question Sen. Jane Earll repeatedly asked businessmen and state regulators who appeared in front of her committee July 24.
Everybody told her “no.’’
A gaming board member, Jeffrey Coy, told Earll that he had not been influenced by a telephone call from a longtime colleague in the state House of Representatives.
After spending 22 years in the chamber, “I know what ’influence’ means,’’ he told Earll, R-Erie. “This was not ’influence.’’’
Earll, a 12-year Senate veteran, retorted: “I also know what conversations mean of, ’Please read between the lines,’ when someone is doing the contacting who you do have a relationship with.’’
The key question the gaming board must settle is whether it is legal to allow a new investor partnership to take over the project, or whether the license must be revoked and offered to a new group of competing applicants.
Under the deal that has been submitted to the gaming board for approval, Chicago real estate billionaire Neil Bluhm, his business partners and family members would assume control of the project from Detroit businessman Don Barden, the original licensee.
Construction on the casino project effectively halted on July 1, several months after Barden ran out of money to pay construction workers. Barden would keep a 20 percent stake under the deal, but faces bankruptcy without the rescue.
The partnership was hastily assembled over four weeks after the prime contractor made the connection between Barden and Bluhm. It holds the promise of opening the casino next year, and providing jobs and tens of millions in tax revenue, as well as paying contractors who haven’t seen a dime in months.
But some senators maintain that handing the casino to new investors would circumvent the intent of the original law. Instead, Barden’s $50 million license should be revoked and then awarded anew to the winner of a fair competition — a process that could take a year.
With gaming board members poised to dictate the future of the site, they must decide what to take from the messages being sent by Rendell and Rep. Dwight Evans, D-Philadelphia.
In different ways, both men expressed support for the deal.
In a span of three days in July, Rendell, who appointed three of the gaming board’s seven members, issued a statement saying he hopes the agency approves the new ownership group. Rendell and Evans joined Barden and Bluhm on a conference call as the partnership agreement was in its final stages.
And Evans called Coy and the gaming board’s chairwoman, Mary DiGiacomo Colins, to lobby for Barden’s inclusion in the emerging ownership group, Coy and Colins told Earll at the hearing.
Regardless of the choices before the gaming board, or what powerful politicians want, Bill Thompson, a professor of public administration at University of Nevada-Las Vegas who follows the casino industry, offered a different suggestion.
He said the gaming board’s best and fairest move is to take over the casino project, find a company to manage the construction, then sell the finished casino to the winner of a competitive application process.
That, Thompson said, would satisfy the spirit of the law and the government’s instinct to help the economy.