Staff Blog
Ban on gaming campaign donations struck down — just as video poker makes headway!
Pennsylvania gets better every day, don't you think? Last week, members of the Pa. House introduced a bill, sought after by Governor Ed Rendell, that would allow every bar in the state (meeting certain conditions) — that's some 14,000 venues — to have up to five video poker terminals, which are identical to slot machines.
The machines, it is hoped, would coax a whopping $1.1 billion out of the pockets of Pennsylvanians, half of which would go to the state.
Then, yesterday, the state Supreme Court ruled struck down a law that prohibits gaming interests from making political contributions. The law was created to prevent the gaming industry from using the massive amounts of money they control to persuade lawmakers to pass legislation in their favor. Now they're free to do it — and if the video poker bill passes, there will soon be much more money to throw around.
The impact of this legislation could be tremendous. While Rendell and the bill's supporters justify this move by arguing that illegal slot machines already operate in the state, they also acknowledge that many, if not most, of those machines are located in western Pennsylvania and in rural counties.
What about the thousands of bars in Philly? Each would be allowed, as the others, to host five machines — a fact that renders Rendell's assertion that this is "not an expansion" of gambling ridiculous.
One would expect Mayor Nutter to have something to say when it comes to legislation that could have a huge impact on our city, right? The number of slot machines we're talking about would potentially dwarf the number of slots being brought into the city by casinos.
I asked the mayor about it when Governor Rendell proposed the idea a few months ago. Douglas Oliver, the mayor's spokesperson, said that comment would be premature, since legislation hadn't yet been introduced.
UPDATE: Today, Oliver e-mailed the City Paper the following statement:
We are always interested in ideas for and efforts to increase funding for education but we do not yet have comment to offer on this proposed legislation. We need more time to determine the potential impact on Philadelphia. As you are aware, we are working closely with the Governor and Harrisburg legislators on a variety of issues and, moving forward, I'm sure we'll have an opportunity to talk more about this idea.
Meanwhile, I've been reading the video poker legislation itself. Here are a few preliminary findings:
- The slot machines used in casinos are required to have a "payout" rate of not less than 85 percent. The Pennsylvania Gaming Control Board, which monitors the payout rates on all machines on a regular basis, says that the average payout percent rate is somewhere in the lower 90s. If that sounds high, it might be easier to think about the opposite of the payout, which is the "holding rate." Let's say you play a slot with a 95 percent payout. What that means is that you will lose, on average, 5 percent of your bet every time you press the button. But slot machines in taverns (I won't bother calling them "video poker" anymore — the difference is purely cosmetic) are allowed to have a payout rate as low as 80 percent. The state's legislation allows these machines to have the worst "odds" — a better way to think of it is the quickest rate of taking your money — in Pennsylvania.
- The Gaming Board, which regulates casino slot machines, will not regulate slot machines in taverns. Instead, it is relying on the state police — the same force that has been unable to shut down the 17,000 machines allegedly operating illegally. What do they get out of this new responsibility? Plenty: The state police will receive 25 percent of all bar slot proceeds. I wonder if that much will be spent on enforcement.
- Is it possible that alcohol and slot machines are a bad mix? Don't worry — the legislation prohibits bars from letting a "visibly intoxicated person" from playing. Maybe the state police will stand guard with breathalizers.
[...] Friday, May 8th, 2009 at 3:56 pm posted by Isaiah Thompson categories News, casinos As I wrote a few days ago, several members of the Pennsylvania General Assembly have introduced a bill that would not only [...]
[...] been more than a month since a group of state lawmakers introduced a law in the house that would legalize, regulate, and tax “video poker” machines — a kind of slot machine — and [...]