Casino association tells state gaming panel it isn't lobbying

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HARRISBURG -- The Pennsylvania Casino Association is merely a trade group for three casinos in the state and hasn't made any extensive efforts to influence or lobby the Legislature, a Philadelphia lawyer who founded the group in 2007 said Tuesday.

Attorney Richard A. Sprague, part owner of the soon-to-open SugarHouse Casino in Philadelphia and board chairman of the association, testified before a joint Senate-House gaming panel along with several other association officials, including chairman/consultant Stephen Zappala Sr., the former chief justice of the state Supreme Court; his daughter, Michele Zappala Peck, manager of the association's Pittsburgh office; and association Executive Director Ken Smukler.

Some legislators, including Sens. Jane Earll, R-Erie, and Jane Orie, R-McCandless, and Reps. Curt Schroder, R-Chester, and Mike Vereb, R-Montgomery, said they've had concerns about the association since the Pittsburgh Post-Gazette first disclosed the existence of it in October. The concern is that the association has been lobbying state officials on gaming-related issues without registering with the state as a lobbyist.

Mr. Sprague repeatedly insisted that the association had done nothing wrong and said it isn't required to register because it hadn't exceeded certain thresholds listed in the state's 2006 Lobbyist Disclosure Act.

He conceded the group had done some limited things, such as "openly" sending three e-mails to legislators and sponsoring radio ads for four days in five media markets in Pennsylvania last fall. These dealt with the group's proposal for tax rates and licensing fees for table games and its opposition to the state adding more resort hotel casinos beyond the two permitted by the 2004 slots law.

Some legislators said that sounded a lot like lobbying. But Mr. Sprague said the association spent only about $450 on these efforts, with most of the cost being a small part of Mr. Smukler's time to produce and distribute the e-mails and ads. That's far below the state threshold of $2,500 every three months that requires registration as a lobbyist.

"It seems to me you are violating the spirit of the law if not the letter," said Ms. Earll. "By not registering you make it seem suspicious."

Mr. Schroder told Mr. Sprague, "You should pay the $100 and register as a lobbyist."

Mr. Sprague retorted that if the legislators would agree that the association hadn't done anything wrong in the e-mails and radio ads, he would register.

"But I will not (register) if there is any suggestion that we were wrong in not registering," he said.

"You are wily," Ms. Earll replied. "If you don't have anything to hide, why not just register?"

Talking to reporters after the hearing, Mr. Sprague said that if the casino association itself eventually hires a lobbyist or lobbying firm, it will register with the state.

He said the three members of the association -- SugarHouse, the Rivers Casino in Pittsburgh and Mount Airy Casino in the Poconos -- each have separately hired the same lobbyist, Stephen Wodjak, a former legislator whose clout is well known at the state Capitol.

Mr. Sprague said the trade association's purpose is recognizing and speaking about "issues common to all casinos" and finding "what would be helpful to the industry," issues like smoking in casinos, rules for the new table games and administrative costs.

Ms. Orie said the mission statement sounded to her as "more descriptive of lobbying." She also complained the association seemed to be operating behind the scenes rather than openly, adding, "I am trying to make gaming more transparent."

To which Mr. Sprague retorted, "Just because you never heard of us, that makes us some weirdo?"

At one point Mr. Sprague objected to being called to the committee hearing, calling it "a Mickey Mouse thing."

One legislator, Sen. John Wozniak, D-Cambria, agreed, saying the casino industry has added hundreds of jobs and millions in state revenue. He claimed the questions raised about the association are "much ado about nothing."

However, Ms. Orie said she thought the association charged its three members a lot in dues -- the Rivers and Mount Airy each have paid $404,000, while SugarHouse has paid $754,000, for total of more than $1.5 million.

"That's a lot of money for a trade association," she said.

Ms. Orie also asked about salaries of association officials. Mr. Zappala said he first went to work as a consultant for the group in "March or April of 2008," and was paid $275,000 that year and again in 2009, when he temporarily served as executive director.

Then after Mr. Smukler was hired in September 2009, Mr. Zappala wanted his salary to decrease. It is $150,000 for 2010. Mr. Zappala said he doesn't have a formal contract or specific duties written on paper and didn't seem sure as to his exact title.

Mr. Sprague said Mr. Zappala is "association chairman" while he himself is "board chairman."

He said Mr. Zappala knows all parts of Pennsylvania and has vast legal experience, making him well worth the salary, as they work to fashion a trade group that can represent all facets of the gaming industry. Hiring Mr. Zappala was a "brilliant move," Mr. Sprague said.

Bureau Chief Tom Barnes: or 717-787-4254.


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