HARRISBURG -- The state Senate has voted to make a major change in the 2004 law that legalized slot machines, eliminating a requirement for middleman companies called slots suppliers or distributors.
The move to get rid of suppliers -- approved last night in a 29-21 vote -- was led by Sen. Jane Orie, R-McCandless. She called slots suppliers "an unnecessary layer of bureaucracy'' between casinos and slot machine manufacturers.
Moreover, Ms. Orie said, requiring suppliers only benefits politically well-connected people. "No other state that has legalized casino gambling requires casinos to use a middleman to buy slot machines from manufacturers. It is very simply a way for those with influence to buy their way into the process."
Most anti-supplier sentiment came from Republicans, but two Western Pennsylvania Democrats, Jim Ferlo of Highland Park and Gerald LaValle of Beaver County, voted for her measure, Senate Bill 1230.
Sen. Rob Wonderling, R-Montgomery, said suppliers were "artificially created middlemen that add nothing to the end product [of slots]. It just provides insiders with a chance to gain wealth and opportunities.''
Some of the 22 firms that have applied for supplier licenses feature influential political figures, including former Lt. Gov. Mark Singel, former Allegheny County Chief Executive Jim Roddey and former Pittsburgh Councilman Sala Udin.
Sen. Vincent Fumo, D-Philadelphia, argued unsuccessfully that supplier/distributors would be Pennsylvania-based companies offering jobs to state residents. He said eliminating them would benefit out-of-state casino owners and slots manufacturers.
The Senate vote doesn't end the debate. Ms. Orie's bill now goes to the House, which could act on Friday.
The House voted two months ago to get rid of suppliers, but than flip-flopped under pressure from lobbyists for some of the would-be supplier firms. Ms. Orie said she's optimistic the House will follow the Senate this time and get rid of suppliers.
If the House approves her bill, it goes to Gov. Ed Rendell, who hasn't said what he would do. He is a supporter of slots as a way to raise revenue to use in reducing property taxes.
Mr. Rendell has become frustrated with the long delay in licensing casinos. According to the 2004 slots law, casinos can't be licensed until at least 90 days after the slot machine distributors have been licensed.
The Pennsylvania Gaming Control Board has been under pressure to start licensing the supplier/distributors so the first casinos, at six state racetracks, can be licensed by the fall.
The Senate's vote to eliminate suppliers came at a crucial time because the gaming board has said it might begin to issue supplier licenses today, at a meeting to be held in Harrisburg.
Board Chairman Tad Decker warned recently that if supplier licenses aren't issued by June 30, there could be a months-long delay in creating both the suppliers and the slots casinos. That's because a separate state agency, the Independent Regulatory Review Commission, may have to get involved with drafting regulations the gaming board will use for the supplier licenses.
Ms. Orie said that if Senate Bill 1230 is approved by the House and signed by the governor, any supplier licenses that the gaming board issues today or any other time would be void.
Ms. Orie isn't a fan of casinos, but said they are now legal in Pennsylvania and there was no sense requiring suppliers, which was just slowing down the process of licensing slots parlors.
Sen. Robert Tomlinson, R-Bucks, who is a casino supporter, agreed with her that whatever the General Assembly does would override any supplier licenses granted by the gaming board.
Mr. Fumo, a leading proponent of casinos, added an amendment last night that would require casino operators to contribute 4 percent of their gross terminal revenue to a new fund to pay for casino-related work by the state attorney general and county district attorneys. The additional requirement is likely to spur outcry from casino owners, who already have complained about the 55 percent tax on casinos.
Ms. Orie said she hoped that additional 4 percent requirement would be removed in the House, and the bill returned to the Senate for approval.
