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Bars say deck is stacked against them as police crack down on poker machines
Saturday, February 16, 2008

Owners of small taverns in Allegheny County, already hit by the new 10 percent drink tax, say they are taking another wallop from a state-funded crackdown on illegal poker machines and other gambling devices.

After receiving more than $500,000 in grants from the Pennsylvania Gaming Control Board, county and Pittsburgh police officials recently announced plans to step up operations against illegal gambling machines in bars, restaurants and taverns.

A provision of the law that legalized slot machine casinos in Pennsylvania sets aside a portion of the tax money from slots to fight illegal gambling.

The bar owners say it is one more way they are being pushed to the brink.

"I don't know how long we can hold on if [police] decide to strictly enforce the law," said a Lawrenceville bar owner, who asked not to be identified because he has a poker machine and four other games of chance in his bar.

The machines themselves are legal and often licensed by local communities, but they are supposed to be used for amusement only. For years, the bar owner said, state, county and city officials have turned a blind eye to bar owners who illegally paid customers who won on the machines.

"Now that the big casinos are coming into town, they want to ban our machines and yet many of us need that money to survive," he said. "We use it to pay some workers who want to be paid in cash, utilities, rent, and even insurance."

Ned Sokoloff, president and chief executive officer of Specialty Group, a one-stop shop in the North Hills for people in the bar and restaurant business, agreed.

Many shot-and-a-beer bar owners install poker machines because they depend on the revenue, he said.

"People come to me to help them buy the small corner bar in their neighborhood. And one of the things they always want to know is how much money they will get from [poker and other machines]," he said.

Mr. Sokoloff, who has been in business for 38 years, said the state has known about the illegal use of the machines for a long time.

"They knew what would happen when they allowed these machines into bars. They knew the machines would be used for gambling. They knew lots of people go to these bars and lots of bar owners make money from these machines," he said.

In going after small bar owners, the state "wants to drive all those people spending their money at the corner bar on a Saturday night into the big casinos," Mr. Sokoloff said.

"But that won't happen. Those same people are going to keep going to the same bars, and somehow these machines will continue, even if the state wants to make criminals of these small mom-and-pop bars."

At the moment, the closest legal gambling in the region is at The Meadows Racetrack & Casino, which opened in June in Washington County.

But construction is beginning on the $450 million Majestic Star casino, scheduled to open in May 2009 on Pittsburgh's North Shore, between the West End Bridge and Carnegie Science Center.

Mike Manko, spokesman for Allegheny County District Attorney Stephen A. Zappala Jr., said the district attorney's office, which received $250,000 in grant funding, is setting up a countywide task force with the state police and municipalities to pursue illegal machines.

The Pittsburgh Police Bureau, which received $180,000, and Allegheny County police, who got $160,000, are expected to be part of the task force.

Given the county's financial straits, some County Council members wondered why they couldn't take the $160,000 and apply it to another law enforcement purchase, like bulletproof vests or police cars, instead of deploying police officers to sit in small bars to catch people illegally using poker machines.

But the money can only be used for training and enforcement to combat illegal poker machines.

"This is just one more nail in the coffin for small bar owners in this county. Why don't they just come in and lock the doors?" said Councilman Nick Futules, D-Verona, who owns a banquet facility in Cheswick.

Mr. Futules, a former borough councilman in Verona, where he was chairman of the budget committee, said the crackdown not only will hurt small business owners, it will reduce revenue for municipalities and boroughs, which impose licensing fees for the machines.

Bill Kanarek, a vendor with United Vending Machines, said the state should regulate the machines instead of trying to have it both ways -- taking fees from poker and casino machine vendors, and then cracking down on their use.

"They condone gambling in bars just by the money they take from [vendors in licensing fees]," said Mr. Kanarek, a third-generation vendor who supplies 50 to 100 bars in and around Pittsburgh.

In 2007, Pittsburgh charged $485 per poker and casino machine in licensing fees. With 804 licensed machines, Pittsburgh took in $389,940 last year.

"[The state] knew from the start that these machines are used for gambling, and that is why they charge almost twice as much for poker and casino machines as they charge for video games and pool tables in bars," Mr. Kanarek said.

On a recent swing through Pittsburgh to promote his budget, Gov. Ed Rendell said the state is raking in a lot of gambling revenue. "Gaming is doing so well. They're blowing all estimates away, even my own."

Asked why the state was now going after poker machines in bars after years of turning a blind eye, Mr. Rendell said: "You shouldn't break the law."



First published on February 16, 2008 at 12:00 am
Staff writer Dan Majors contributed. Karamagi Rujumba can be reached at krujumba@post-gazette.com or 412-263-1719.
Read the PG's Casino Journal by Bill Toland
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