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Rendell proposes closer examination of slots license applicants
Monday, March 31, 2008

HARRISBURG -- Gov. Ed Rendell is proposing three major changes in the 2004 state law that authorized casinos in Pennsylvania, including one aimed at ensuring that the state Gaming Control Board is given all relevant background information about applicants seeking a slots license.

He is trying to avoid a repeat of what happened in December 2006, when the gaming board awarded a slots license to Poconos businessman Louis DeNaples without knowing that he was the subject of a state police perjury investigation.

That investigation led Dauphin County District Attorney Edward Marsico to file charges against Mr. DeNaples two months ago, which has caused some embarrassment for the gaming board.

Mr. DeNaples has insisted he didn't lie under oath about his relationships with alleged organized crime figures, but until the charges are resolved in court, the gaming board has barred him from entering his casino, the Mount Airy Casino Resort in Monroe County, and has named an outside trustee to oversee its operation.

Mr. Rendell has written to Sen. Jane Earll, R-Erie, recommending that the gaming board set up a procedure to get "from each agency responsible for elements of [an applicant's] background checks, an attestation of the suitability of the licensee."

He also wants to ensure that the gaming board receives "any relevant and legally available background information ... prior to any licensing decision."

Mrs. Earll chairs a Senate committee that oversees operations of the seven casinos now in operation in Pennsylvania. One of them is in her district, the Presque Isle Racetrack and Casino.

She is forming a bipartisan, House-Senate task force to consider ways to make the state's regulation of gambling "more comprehensive, transparent and effective."

Besides legislators from all four caucuses, Mrs. Earll said the panel would include "all the stakeholders in gaming," such as members of the governor's staff, the state Gaming Control Board, the state police, the attorney general, and at some point in the future some owner-operators of casinos and citizens groups, both pro- and anti-casino.

The first meeting is expected within 10 days, and all discussions will be done in public, she said.

One good thing about slots, Mr. Rendell said, is that after four years, they will finally be bringing $672 million in broad-based property tax relief to middle-income homeowners beginning in July. But he added that improvements can always be made in the licensing and operations of the casinos.

He suggested two other changes in the current law:

• Ending the requirement for a five-member "supermajority" of the board to approve any slots licenses. The gaming board has seven members, three named by the governor and one each named by the Republican and Democratic leaders of the House and Senate. Currently, all four of the members selected by the legislators -- plus at least one of the governor's three appointees -- must approve an applicant's bid for a license. This, in effect, gives each of the four top legislative leaders "veto power" over any license. Mr. Rendell said a simple majority of any four of the seven members should be enough to award a license.

• Any slots license applicant should be required to ask the federal government, under the Freedom of Information Act, for all background materials that pertain to him or her, and then should turn that information over to the gaming board. If Mr. DeNaples had been required to make such an FOI request, board members say they would have known about the perjury investigation before giving him a slots license.

The governor's proposed changes are also aimed, at least in part, at resolving an ongoing dispute between state police and the gaming board over the sharing of background information about slots applicants.

The Bureau of Investigation and Enforcement, part of the gaming board, does some of the background investigation, and state police officials do other parts. But communication between the two agencies has been problematic, critics say.

Some legislators want to know whether the board knew about the state police perjury probe of Mr. DeNaples before giving him a slots license on Dec. 20, 2006.

Col. Jeffrey Miller, state police commissioner, has said the board must have known about it, or should have known about it, because board officials, in the fall of 2006, had given state police copies of Mr. DeNaples' sworn testimony to the board for comparison with other statements he'd made.

However, gaming board officials insist they didn't know about the perjury probe, or they would have delayed action on Mr. DeNaples' slots license.

State police insist they were forbidden by law from sharing all the details of their DeNaples probe with the gaming board, because it is not considered an official law enforcement agency. Such agencies include the FBI, the state attorney general and the state police, but not the gaming board or its investigators, Col. Miller said.

The House-Senate panel being proposed by Mrs. Earll isn't the only pending legislative action regarding gambling.

Several House Republicans are trying to set up a 10-member House committee, half GOP and half Democrat, to look into "what the gaming board knew and when did it know it'' about Mr. DeNaples.

GOP Reps. Doug Reichley of Lehigh, Mike Vereb of Montgomery, Curt Schroder of Chester and others have introduced House Resolution 652, which would set up the panel and give it subpoena power to compel testimony from gaming board members, state police and others.

Republicans say they want to determine if the gaming board's current procedures on licensing are adequate, in light of the fact that Mr. DeNaples was able to get a license. Some Democrats, however, think such a panel would only be a Republican "witch hunt" aimed at embarrassing Democrats, especially Mr. Rendell, who has been a strong advocate for slots as a way of generating property tax relief.

Mr. Reichley denied he's playing politics, saying, "Gaming integrity is not a partisan issue, nor would the makeup of this committee be [partisan]."

However, since Democrats control the House, 102-101, Republicans may have trouble getting the votes they need to create the panel.



First published on March 31, 2008 at 12:00 am
Bureau Chief Tom Barnes can be reached at tbarnes@post-gazette.com or 717-787-4254.
Read the PG's Casino Journal by Bill Toland
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