Gov. Ed Rendell made a huge political wager in 2004, maybe the biggest of his 30-year career in public life.
He successfully pushed to expand legalized gambling in Pennsylvania, a move that will bring thousands of slot machines to 14 casinos around the state over the next three or so years.
Rendell, the former Democratic mayor of Philadelphia, is betting that all those one-armed bandits will generate $1 billion a year in new revenue for the state, which will be used to give state residents a modest break on their property taxes. It may also help him get re-elected in 2006.
He's hoping to stop, or at least reduce, the bus- and carloads of Pennsylvanians headed to Atlantic City, West Virginia, Delaware, Connecticut and other states with glitzy gambling palaces.
With the recent inaugural two-day session of the new Gaming Control Board, which will award slots licenses to the 14 venues, "We are one step closer to the reality of providing property tax relief for Pennsylvania homeowners and wage tax reduction in Philadelphia,'' Rendell said last week.
He said the "historic and much-needed relief'' that the gambling-related revenue will bring "will allow homeowners to save more of their hard-earned dollars.''
For years, Rendell has repeatedly said, Pennsylvanians have been gambling legally in large numbers -- but out of state. Since Pennsylvania didn't have slot machines, state government, along with counties and municipalities, haven't benefited from any slots-related revenue to lower taxes or spur economic development efforts.
The state Legislature approved the expanded gambling law in the wee hours of July 4 and Rendell quickly signed it on July 5. It slaps a 34 percent state tax on the total gambling revenues, which Rendell projects will reach $3 billion a year statewide. That means about $1 billion a year for the state once all 14 venues get up and fully running in three years or so.
Many people expect the new slot machines to bring the biggest societal changes in decades to tradition-steeped Pennsylvania.
Owners of farms where racehorses are bred and raised are happy about the new law. So are trainers, horse-racing fans, and the racers and harness drivers themselves, who will benefit from larger purses, or prizes for winning races. So are agricultural interests in general, which employ 35,000 people in farming-related pursuits.
But many Republican legislators, social and religious conservatives, police agencies and other gambling opponents aren't happy about the brave new world of casinos, fearing an upsurge in personal bankruptcies, domestic disputes, thefts to cover gambling losses and other types of crime.
"The impact of this law on the social fabric of Pennsylvania will be monumental," said Michael Geer, president of Pennsylvanians Against Gambling Expansion, which has already filed suit to overturn the new law.
One thing his group is angry about is the last-minute, middle-of-the-night legislative session when the slots law got final approval, after little public discussion.
"It's imperative laws be enacted in an open, above-board and legitimate way,'' Geer said. "Pennsylvania citizens were denied an appropriate opportunity to be fully informed on this legislation.''
One conservative legislator, Rep. Samuel Rohrer, R-Berks, was especially upset that the law passed just after midnight on July 4, which was a Sunday.
"We do it on God's day,'' Rohrer said angrily. "We will not be held unaccountable.''
Expanding legalized gambling is a key component of Rendell's plan to create a "new Pennsylvania'' and "improve the quality of life'' in the state. It's a pledge he campaigned on in 2002 and has been working to implement since taking office in January 2003.
But to Bruce Barron, a leader of the Pittsburgh-based anti-gambling group called No Dice, adding slot machines is a wrong-headed way to improve Pennsylvania's quality of life. He denounced the devices as "the most addictive form of gambling.''
He also said, "We don't need to wait and see if gambling will bring corruption to government in Pennsylvania. It's already started, as shown by the recent indictment of Erie's mayor on charges that he benefited financially from his insider knowledge'' of where a casino in Erie might be located.
The slots law has created the Gaming Control Board, a powerful, seven-member body that will issue the 14 slots licenses, probably by fall 2005 or early 2006.
Once all those casinos are constructed -- seven at horse-racing tracks, five at stand-alone locations and two at resort hotels -- Pennsylvania could wind up with as many as 61,000 slot machines. The 12 larger casinos can have up to 5,000 slots each by their second year of operation, and the two hotel casinos can have up to 500 each.
Each of the 12 large casinos will pay the state a one-time, upfront fee of $50 million for the license. The two resort hotel casinos will each pay a $5 million fee.
Having 61,000 slot machines would vault the Keystone State into second place nationally in the number of one-armed bandits, behind only gambling-crazy Nevada.
For years, Pennsylvania legislators have been trying to do something to answer residents' cries for lower property taxes. Rendell boasts that the new slots law will bring, on average, about $300 a year in property tax reduction in most school districts.
But the tax relief probably won't take place before 2007 -- not in time to help Rendell in his expected bid for re-election in 2006. Some Democrats here say that Republican legislators have done all they can to slow the arrival of slots and thus keep tax reduction from benefiting Rendell politically in 2006.
While the Gaming Board could award the slots licenses by late 2005 or early 2006, it could take up to a year before all the casinos are fully up and running -- and thus generating the new state tax revenue that will permit the property tax reductions.
Mike Jeannot, vice president of MEC Racing Pennsylvania, owner of The Meadows in Washington County, said it will probably take a year after the slot license is awarded to build the new $175 million casino that will go beside the racetrack. He's hoping to have the casino open by mid- or late-2006.
Several of the 14 casino sites are already known. The July law allows each of the four existing horse tracks to have a casino. Besides The Meadows, that includes Penn National Race Course near Harrisburg, Philadelphia Park (just north of Center City Philadelphia) and Pocono Downs near Wilkes-Barre.
Also to get a casino are two tracks that have been licensed by the state but not yet built, a thoroughbred track in Summit Township near Erie, and a harness track along the Delaware River in Chester, just south of Philadelphia.
The seventh "racino,'' as racetrack/casinos are being called, will either be in Beaver County or Lawrence County. In the spring, the state Harness Racing Commission is expected to decide which site to license for racing.
The new slots law provides for one "stand-alone'' casino somewhere in Pittsburgh and two such casinos within Philadelphia city limits. Sites for the other two stand-alone casinos aren't known yet, but could be at the old Bethlehem Steel works in the Lehigh Valley and at one of the Pocono resorts in northeast Pennsylvania.
The competition to build the Pittsburgh casino is fierce. Would-be casino operators include parking lot magnate Merrill Stabile, who wants to build on General Robinson Street, just north of PNC Park; Albert Ratner, head of Forest City Enterprises of Cleveland, who wants to team with Harrah's Casinos to put one at Station Square; and Penguins owner Mario Lemieux, who wants to build a casino as part of a new hockey arena Uptown, near the current Mellon Arena.
In addition, Beaver County developer Charles J. Betters has a plan for a $500 million racetrack/casino/housing/retail project on a hilly site in Hays, but that is stalled by a lawsuit Betters has filed against the state over the new law.
Betters is suing the state Horse Racing Commission over its decision to grant a racetrack license for Erie. He's also suing separately to overturn the entire slots law. He doesn't like a distance-separation clause which would prevent him from building a racino in Hays because it would be too close to the new casino at The Meadows.
Two resort hotels in Western Pennsylvania may seek one of the 500-slots casinos. Applications are expected from Nemacolin Woodlands in Fayette County, owned by wealthy businessman/politician Joe Hardy, and Seven Springs resort in Somerset County, which is seeking to increase its convention business.
Some state legislators worry that there could end up being too many gambling palaces in the area of Western Pennsylvania and northern West Virginia, especially since the area has been losing population in the past two decades.
They fear that not all the new casinos may be able to succeed, once casinos are built in Downtown Pittsburgh, at The Meadows, in Beaver or Lawrence County and at the two resort hotels.
They noted that there already are casinos in Chester, W.Va., and Wheeling, W.Va., and that adding five more in the western part of Pennsylvania may simply prove to be too much.
