Governor Ed Rendell says he expects a clause in the pending table game legislation — one that would allow PA casinos to extend credit to their customers, whether they’re playing table games or just slots — to die before reaching his desk. In a phone conference today, Rendell referred to that clause and others as “ancillary,” and said, “I think a lot of that stuff is going to go out of the bills before it gets to me.” Pressed on the issue of casino credit specifically, Rendell said, “I don’t think that will survive the final bill — but if it did, I would have to sign it. That’s not a core issue for me.” Listen to the exchange here:

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The General Assembly is supposed to reconvene on Monday, Nov. 9 to settle the issue. Meanwhile, we noticed that today’s Inquirer editorialized against the credit clause:

Even when Pennsylvania’s flawed gaming bill was passed in the dark of night in 2004, the legislature had enough sense to prohibit the extension of in-store credit. Why back off now? The gaming industry says it needs to be able to provide credit to the high rollers expected once the slots parlors morph. But the credit access will also be there for problem gamblers and those who can least afford it. That’s especially troubling in Philadelphia, where about a quarter of the population lives in poverty and many are on the edge.

A week ago, I got astride my bicycle, turned my phone off, and set off for a leisurely five-day ride to Pittsburgh. Amazing how much can happen in a week: I arrived to the news that the state budget had finally passed and that table games (blackjack, poker, etc.) were legalized as part of that budget.

Only they weren’t.

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Yesterday, on the PA House Floor, Representative Mike O’Brien, whose district includes Fishtown (where the SugarHouse casino is expected to open), introduced an amendment to Senate Bill 711  — the gambling “reform” bill that also seeks to introduce table games like Blackjack and Poker — that would require Pennsylvania casinos to pay an additional 1 percent tax on gross table gaming revenues. The revenue would go straight to the county hosting that casino.

The amendment passed.

Whoopee, right? Everybody wins! Except the casinos, but they’ve won so much already they shouldn’t mind.

But wait — there’s more.

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What a mess.

The Daily News’ Chris Brennan reports today that Foxwoods casino, which is going before the Pennsylvania gaming Control Board tomorrow to ask for an extension of its license, will likely be told to return to its first intended location on the South Philly waterfront – instead of its recent (and city-approved) plan to place a casino in the former Strawbridge & Clothier store at Market & 8th Street.

And that could be a big problem for Foxwoods. They conceded the waterfront location only after staunch opposition from not only neighbors but the likes of Mayor Nutter, Councilman Frank DiCicco, and former-State Senator Vince Fumo.

Nutter and DiCicco changed their tune when Foxwoods announced it intended to relocate to the Chinatown area; what will they be singing now?

Meanwhile, Foxwoods – or, rather, the Mashantucket Pequot Tribal Nation, which owns controlling shares of the Connecticut Foxwoods casino – appears to be going bankrupt.

In a rather under-stated piece, the AP reports on Philly.com merely that “Foxwoods investor to restructure debt.”

The Connecticut-based The Day, which first broke the story, paints a somewhat more colorful picture of the tribe’s financial woes:

On the brink of default, the Mashantucket Pequots are seeking to restructure $2.3 billion worth of debt, a senior adviser to the tribe said in interviews this week.

The debt is $1 billion more than the tribe’s Foxwoods Resort Casino - North America’s largest casino and once the world’s most profitable - can sustain, the adviser said.

While Foxwoods representatives claim that a default – should one happen – wouldn’t affect Foxwoods’ plans in Philadelphia, it’s hard to believe that.

As Inquirer “Philly Deal$” columnist Joseph DiStephano puts it, “it won’t make it any easier for [Foxwoods] to borrow.”

How could the country’s largest and once most-profitable casino be in this much trouble?I called Professor Earl Grinols of Baylor University, an economist and expert on the gaming industry, to see what he thought.

“I think it’s probably just mismanagement,” he said. As the casino lost its regional monopoly on legal slot gambling, Grinols said, “They should have been able to project future revenues and accommodate.”

Tough luck for them – and, perhaps, for Philadelphia and Pennsylvania if we make the same mistake of believing overly-optimistic, skewed, or just plain phony revenue projections offered up by this troubled company and the other casinos operating and getting ready to operate in our state.

Because legalizing slots casinos means that casino revenue projections become state and county and city revenue projections.

And we know already what it looks like when those turn up a billion short.

A proposal, mostly supported by state Democrats, to legalize video poker throughout the state to raise money for state college tuition reimbursement died in committee yesterday, thanks largely to the dissenting votes of Philadelphia democrats Rep. Mike O’Brien and Rep. Curtis Thomas, who sided with the Republicans on the Gaming Oversight Committee.

Rep. Bill Keller, who represents part of South Philly, voted “Yes.” Members of Casino-free Philadelphia are asking Philadelphians to call Keller and ask him to reverse his vote.

I’ve written about the video poker proposal several times on this blog and in the City Paper. Despite claims to the contrary by its supporters, there is absolutely no question that this is an expansion of gambling in the state — specifically, slot machine gambling, which is by far the most addictive and harmful form of the various kinds of gambling allowed in Pennsylvania.

This proposal would let every eligible bar in the state host up to five slot machines. That’s tens of thousands more potential slot machines in the city of Philadelphia.

Despite evidence that the majority of money that comes in through casino slots is coming from so-called “problem gamblers,” this proposal carries with it not one penny for gambling addiction treatment, and has been accompanied by no studies looking into the possible implications of the potentially ubiquitous availability of these machines.

Rep. O’Brien seems pretty firm in his continued opposition. Rep. Thomas, however, gave statements yesterday indicating he was open to changing his vote.

For more information, read an article I wrote when the idea was first floated by Governor Rendell, or listen to my elusive podcast, on which both sides of the issue are debated.

Whether you’re for it or against it, you can contact these reps and urge them to vote as you see fit.

Rep. Curtis Thomas: (717) 787-9471

Rep. Mike O’Brien: (717) 783-8098

Rep. Bill Keller: (717) 787-5774

It’s 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 allow every bar in the state to apply for as many as five.

The purpose of the bill, behind which Governor Ed Rendell is putting considerable weight, is to provide tuition relief to Pennsylvania college students. They argue that illegal video poker machines are already operating throughout the state (the state police have given the number as 17,00, a number whose origin is not entirely clear) and that this legislation would regulate and tax an activity already going on.

Opponents of the bill call the legislation a massive and dangerous expansion of gambling. Even if there are 17,000 illegal slot machines operating in the state, the bill would open the door to as many as 80,000 new slot machines in Pennsylvania and as many as 10,000 right here in Philadelphia, where we’e already supposed to get two new slots casinos.

As regular readers know, I’ve written before about slot machines, and the ways their design and implementation is geared toward exploiting addiction, promoting unhealthy gambling, and, in some cases, perhaps creating addiction where it did not exist before.

Often called the crack cocaine of gambling, slots have evolved over the years to take more money from players more quickly. Slots generate most of a casino’s profits. One of the most disturbing statistics out there comes from Professor Earl Grinols, who found that as many as half or more of all casino profits come from problem gamblers.

In this multi-part episode of Philly From Scratch: The Podcast (subscribe on iTunes), I talk to three guests about video poker:

L-R: Rep. Paul Clymer, Rep. Dante Santoni, Attorney Paul Boni

State House Representative Paul Clymer (R., Bucks) is a member of the House Gaming Oversight Committee and one of the few House members who has consistently and vocally opposed the expansion of gambling in Pennsylvania – first with casinos, now with video poker. In this interview, he shares some of his concerns with the proposed legislation.

State House Representative Dante Santoni (D., Berks) is the Chairman of the House Gaming Oversight Committee and one of the sponsors of the video poker legislation. In this interview, he defends his decision to deny a request by Philadelphia Representative Mike O’Brien to hold hearings in Philadelphia.

Paul Boni is an attorney for Casino Free Philadelphia, a local group that opposes casinos in the city as well as slot machines in bars and taverns.

In the these interviews, my guests and I discuss various issues related to the legislation, and cite a few different studies and documents. Links to the relevant information after the jump.

If you like Philly From Scratch: The Podcast, you can subscribe via iTunes and have it delivered straight to your listening device — for free!

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As I wrote a few days ago, several members of the Pennsylvania General Assembly have introduced a bill that would provide for the legalization/regulation of “video poker” terminals — slot machines — as well as for the tremendous expansion of slots gambling in PA, and especially in Philadelphia. The revenues (well, about half of them), would go toward tuition relief for state colleges.

Every bar in the city would be able to apply for up to five slot machine licenses.

A pretty big deal, don’t you think? Big enough that Philadelphians might deserve a chance to learn more about the bill and voice their opinions, right?

Not so.

Rep. Mike O’Brien

Hearings have been held in Harrisburg and Westmoreland County. There will be another hearing next week in Reading, then in Bucks County, and then the show goes back to the capital. Yet no hearings are being held in Philadelphia, the city which could very well see the biggest impact from the legislation.

The decision came in spite of a request by Philadelphia House Representative Mike O’Brien to Gaming Oversight Committee Chairman Dante Santoni to have hearings in the city.

“The response from [Rep Santoni] was that the meetings had been scheduled and he didn’t have time in the schedule to bring the hearings to Philadelphia,” says O’Brien, who opposes the legislation. “Certainly, I was disappointed.”

I called Santoni this afternoon to ask him about it. (Look for more of this interview in a Philly From Scratch: The Podcast on Monday.)

“I got a lot of requests from a lot of legislators to come to their communities,” Rep. Santoni told me. “It’s not that we’re ignoring or dismissing other communities; it’s just that there’s only so much time.”

Rep. Dante Santoni

Casinos (and thousands of slot machines) were brought into Pennsylvania in a midnight legislative session, leaving virtually no opportunity for public input, let alone careful studies of what the impact of casinos might be.

Now the state wants to allow tens of thousands more slot machines into the state, and into Philadelphia, where the number of slots in bar/restaurants could dwarf what’s planned for Foxwoods and Sugarhouse (should they be built; SugarHouse needs to raise $150 million, and Foxwoods still hasn’t shown a single plan or cost estimate).

It’s good that hearings are being held at all, and Santoni is right in pointing out that few legislative proposals go on the road. But that only speaks to the magnitude of the importance of this legislation.

The people of Philadelphia — and Mayor Nutter, who has remained silent on this issue as he lobbies Harrisburg for support for his proposed tax hikes — should be asking some serious questions about this bill and how it will affect our city.

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:

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The Philadelphia Research Initiative released a poll this morning:

Philadelphians favor bringing slot-machine gambling to the city and support the plan to build a casino along the Delaware River in Fishtown. But they oppose the idea of a casino on Market Street East in Center City.

Fifty-three percent of city residents favor slot-machine gambling in Philadelphia, while 41 percent are against the idea, according to a new poll commissioned by The Pew Charitable Trusts’ Philadelphia Research Initiative.

I’ll put more of PRI’s press release after the jump. I’ve got a call out to Casino Free to get a reaction; my guess is it’ll be something to the effect of, this is just one poll, and pro-casino forces opposed Philadelphians actually having a say in the form of a referendum on putting a 1,500-foot buffer between casinos and homes. The Pew survey doesn’t have that referendum’s level of specificity. Then again, the proposed referendum didn’t have the Pew survey’s level of generality.

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A newly united anti-casino coalition is challenging city officials — Councilman Frank DiCicco in particular — to put some teeth on a law DiCicco recently proposed that would lay the groundwork for Foxwoods to set up shop in Market East. Members attended a meeting of the Philadelphia Planning Commission yesterday to make their point.

The “No Casino In the Heart of Our City Coalition” (NCITHOO … aw, forget it) is a relatively new anti-casino group. It was founded by Arch Street Methodist Church, the Philadelphia Black Clergy and Asian Americans United, but has had more than 40 groups sign on since, including churches, civic groups and business associations.

Recently, as part of an effort to which Mayor Nutter has enthusiastically attached himself, DiCicco put forth legislation that would rezone the former Strawbridge & Clothier site in Market East into a Commercial Entertainment District (CED) so that Foxwoods casino can set up shop.

While maintaining their opposition to any casinos in the city, the Coalition has meanwhile sent a letter to DiCicco asking him to insert into that legislation various regulations and requirements for the casinos:

As it currently stands, the CED contains no consumer protections. It spot zones. It dispenses with all land use studies such as traffic, environmental, etc. It also was most recently amended to remove public oversight and protections (like a final City Council review of the Plan of Development).

 

The CED can be amended to include reasonable zoning and land use regulations of both casinos. Such an amended CED would recognize the unique location of these casinos across from homes and near schools, children and families. As you know, the Gaming Act and the Supreme Court both recognize that the City of Philadelphia has full use of its zoning and land use power, so long as it is not exercised to change the location of a casino.

Specifically, they’re asking for:

1)  Restricted operating hours.

2) A ban on any ATM machines, lending or check-cashing services, etc.

3)  Open and transparent annual reports and consumer protection studies of slot machines.

4) Mandatory monthly statements to gamblers.

5) Analysis of gambler demographics and economic impact on local communities.

6) A Ban on off-track betting.

According to Coalition member Helen Gym, the Planning Commission was less than receptive to public input. “People felt rudely mistreated by the Planning Commission,” said Gym. “There was no effort to acknowledge our presence beyond emphasizing our 3-minute limit to speak … there wasn’t even a ‘thank you’ for the fact that community people, some of whom were victims of gambling addiction, had spent 4 hours in a hot room, standing, waiting patiently to give testimony.”

Councilman DiCicco, meanwhile, canceled an appointment to meet with the Coalition after the meeting. Gym says she’s spoken with DiCicco since and hopes that there will be another opportunity to meet.

Harris Sokoloff, who organized the city’s budget workshops for the Penn Project on Civic Engagement, weighed in this week with his thoughts on how seriously Nutter took public feedback in crafting his budget proposal. After the budget came out, it seemed fair to credit Mayor Nutter with trying hard to preserve services, as people had asked, but with refusing to budge on citizens’ requests that our wage taxes be raised. (Instead, he has produced a substantial property tax hike, and a sales tax hike). In his budget address, he attempted to justify these decisions explicitly in the context of citizen preferences.

In an e-mail he sent out, Sokoloff writes:

We have an answer to the most common taxpayer question at the Tight Times, Tough Choices budget workshops:  is the Mayor serious?  Will he really take the work we do seriously?  Will it have any effect on his budget?

The answer seems to be “Yes, mostly….”

He elaborates at It’s Our City:

It seems fair to credit the Mayor with continuing the conversation, if somewhat pugnaciously. He has demonstrated that he was serious when he said he’d listen to what came out of the PPCE’s budget workshops.

I think this is right — I think the mayor did listen carefully to what citizens said (no dog and pony shows, those budget workshops), didn’t take it as gospel, but engaged with people on those subjects where he disagreed. Except for one thing. A lot of what Nutter wants to do with his budget is predicated on getting help from the state, and the state, as we know, is eager to start seeing those casino revenues flow. And on that subject, I don’t think Nutter has been particularly engage-y — indeed, very little effort has been made to find out what the people of Philadelphia think about this issue (I don’t remember gaming coming up at the budget workshop I went to). The budget and gaming are often treated as separate issues, but, as Isaiah Thompson notes here, casinos are very much in the middle of everything.

I believe that’s Sugarhouse exec Neil Bluhm up top. No, maybe not.

I suppose, in a way, this has been the central question of the casino fight from the get-go, and it’s certainly a question that Isaiah refers to in his awesome casino piece from last week. But as I read accounts of casino protesters chasing Foxwoods officials out of a gaming control board meeting, I found myself wondering, explicitly, what it would take at this point to turn this casino train around.

The Metro quotes Sugarhouse owner Neil Bluhm dismissing yesterday’s protests:

“Do you think this was the majority of the city?” Bluhm asked sarcastically.

Is that the new standard for paying attention to a citizen objection in Philadelphia? That 750,001 people participate?

Something tells me that if some effort were made to gauge the position of the majority of the city, like a referendum, Mr. Bluhm would oppose it. Or maybe we could just elect a mayor whose rhetoric is generally anti-casino. Oh, wait.

Which is all to say that it’s not clear to me, given the uniformity of support for gaming among the political class, what could be done at this point to prevent casinos from coming (by which I don’t mean people should stop fighting them. Maybe something will come up!).

Evan M. Lopez

Writing about casinos in the last few months, I’ve touched a few times on the “near-miss” on slot machines — a process by which a player sees an outcome that appears to be closer to a jackpot than it really is. Although gaming officials deny that these things exist, recent work by Canadian researchers Roger Horbay and Tim Faulkner reveals that the “near miss” is alive and well.

Following my recent article on why I can’t stop writing about casinos, I got this tidbit courtesy of economist Fred Murphy, whose report on the economic impact of casinos on Philadelphia (he aruges they won’t bring nearly the benefits promised) has been thoroughly ignored by the Nutter Administration, which promised to do its report only to later inform me that no such report was ever in the works.

Professor Murphy passed along this article, from the science journal Neuron, which describes a study by British researchers concluding that:

… to the gambling brain, almost hitting the slot machine jackpot may be just as good as actually winning, a study appearing in the Feb. 12 Neuron suggests. The results may help explain gambling’s allure.

That’s right: The near-misses that aren’t supposed to exist, but do, have been shown to have similar effects to jackpots — and drugs!

Behold:

When all three cherries hit the payline and money pours out of a slot machine, select regions of the brain activate. Called the reward pathway, brain cells in these regions signal pleasure by releasing and detecting the feel-good chemical messenger dopamine. “Those same areas are recruited by natural rewards, like chocolate, and by drugs of abuse, like cocaine,” explains coauthor of the study Luke Clark, of the University of Cambridge in England.

The fact that we could have done worse notwithstanding, CP super-intern Daniel Schwartz gives it to Mayor Nutter in the Daily Pennsylvanian:

Cartoon by Daniel Schwartz

He credits Isaiah Thompson for the inspiration. I credit Isaiah Thompson with nothing.