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State GOP wants to cut power of gaming board
Wednesday, April 30, 2008

HARRISBURG -- House Republicans, claiming there are problems with two of the 11 casinos licensed by the Pennsylvania Gaming Control Board, have introduced bills to reduce the board's power.

At a meeting of the House Gaming Oversight Committee yesterday, Rep. Fred McIlhattan, R-Clarion, asked whether the board's investigative arm, the Bureau of Investigations and Enforcement, "has all the authority it needs to gain access to sufficient information, so the board can make good decisions on applicants for slots licenses?"

He added, "We have two licensees that have raised some issues" about the current background investigation process, which is split between the bureau and the state police. They give their background findings to the board before it awards the slots licenses.

Mr. McIlhattan said the two problematic licenses are those given to businessman Louis DeNaples for a casino in the Poconos and to Don Barden for the proposed Majestic Star casino on Pittsburgh's North Shore.

Republican legislators have sharply criticized the bureau because it didn't know that state police were investigating Mr. DeNaples in 2006 for possible perjury.

He got his slots license from the gaming board in December 2006. State police and the FBI have said they were prohibited from telling the gaming board's bureau about the perjury probe because it isn't an official criminal justice agency.

The DeNaples case was later turned over to a Dauphin County grand jury, which recommended that District Attorney Edward Marsico file perjury charges against him. The charges were filed and are still pending.

Mr. DeNaples has denied lying under oath about his supposed relationships with organized crime figures in Eastern Pennsylvania.

The gaming board has temporarily banned Mr. DeNaples from entering his casino until the criminal case is resolved. The situation has, however, become a source of embarrassment for the gaming board.

Mr. McIlhattan also wondered if the gaming board had delved sufficiently into Mr. Barden's financial background. Mr. Barden is currently seeking a $630 million refinancing in order to complete his casino, and has received low credit ratings from two agencies, Moody's Investors Service and Standard & Poor's. Mr. Barden is also seeking to delay construction on the casino's ballroom and amphitheater.

"Has the board calculated the financial risk faced by his company?" asked Rep. Doug Reichley, R-Lehigh.

He said Gov. Ed Rendell and House Democrats should also require gaming board members to state publicly if they knew about the $11 million in personal gambling losses racked up by Mr. Barden before they gave him his license.

Mr. Reichley said gaming board officials have "evaded tough questions" and are trying to "whitewash" problems with casinos.

Mr. McIlhattan said the House gaming committee should ask gaming board members "how the decisions were made to award these two licenses."

Republican legislators also want to change the way the state investigates a casino applicant's background.

Mr. Reichley has proposed House Bill 1450, which would give the state attorney general additional power over applicant background investigations. He said the attorney general should be just as involved in the process as the gaming board's investigative bureau and the state police.

House Bill 2389, sponsored by Rep. Ron Marsico, R-Dauphin, would shift oversight of the bureau to the state police, renaming it the Gaming Enforcement Office.

He thinks that would strengthen the background check process.

Since Democrats control the state House, however, it isn't certain if these bills will come up for votes.



First published on April 30, 2008 at 12:00 am
Bureau Chief Tom Barnes can be reached at tbarnes@post-gazette.com or 1-717-787-4254.
Read the PG's Casino Journal by Bill Toland
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