Dicey Propositions (City Paper Aug 17-23)

Dicey Propositions

With a growing rap sheet (literally), the state Gaming Board faces new criticism.

by Kevin Haney

gambling With a pair of Vegas-sized slot parlors possibly opening within blocks of his Northern Liberties home, Matt Ruben worries about traffic problems. Same goes for Jethro Heiko, a community organizer from Fishtown who lives within blocks of the proposed SugarHouse slot parlor. But that's not what worries them most.Ruben says he's scared witless by the people in charge of gaming, since several staff members working for the politically wired Pennsylvania Gaming Control Board have, among other things, racked up a litany of criminal charges ranging from third-degree murder to brawling in bars.

BITTER AS SUGAR: With five slot-parlor proposals looming, Jethro Heiko of Fishtown is battling plans for the SugarHouse riverfront site. : Michael T. Regan

"These are the people that are the regulators?" asks Ruben.

The board, which is led by seven appointees who each make upwards of $145,000 annually, will by year's end issue 14 gaming licenses, including two in Philadelphia and one each in Bensalem and Chester. (Gov. Ed Rendell appoints three while Democratic and Republican leaders from both the state Senate and the House of Representatives make one appointment each. Those four board members have the power to veto any majority decision.) Already, gaming observers from across the country predict looming embarrassments from a projected $4 billion-a-year industry that's ripe for corruption.

The board's executive director, Anne L. Neeb, is battling Louisiana State Police efforts to recoup $2,700 that Neeb was allegedly paid for hours she didn't work while heading that state's gaming board. Officials there say part of that money stems from four days she spent in Pennsylvania while still working in Louisiana. Also, two staff lawyers were arrested after two separate barroom brawls in 2005.

In February, a press aide, who has since resigned, was charged with third-degree murder after his girlfriend plummeted from his high-rise-apartment window. Two months later, a licensing investigator was charged with five counts of falsifying credentials on his job application. A month after that, another investigator got arrested in connection with a bar brawl. The former remains on the board's payroll, while the latter lost his job.

"One day," says Frank Catania, who led the New Jersey Division of Gaming Enforcement from 1994 to 1999, "it's going to be a black eye."

Some legislators think the eye has already been blackened. Two weeks ago, a dozen Republican state senators anted up a package of 21 reforms that would open board records and decisions to more public scrutiny, place board employees under the state civil service, require Senate confirmation of board members, give state police and the attorney general more oversight and prohibit politicians and lobbyists from owning any piece of a gambling-related business.

Among other things, they hope to prevent decisions like the one in which the board approved licenses for slots-machine-distribution firms that included two adolescent children of lobbyist Stephen Wojdak, the Pennsylvania Turnpike Commission chairman and a former aide to state Speaker of the House John Perzel.

While Tad Decker, the board chairman and longtime Rendell friend, has interpreted Louisiana's decision not to arrest Neeb as a vindication, legislators like state Rep. Paul Clymer of Bucks County think now is the time for a overhaul. The board is set to tap the first two parlors next month and aims to have more permits issued by November as Rendell and other legislators up for re-election promised property tax relief would come thanks to gaming.

"God help us," says Clymer, "if they issue a license."

As director of the Institute for the Study of Commercial Gaming at the University of Nevada-Reno, William Eadington has studied the industry for more than three decades. Much of what he's seen happening here puzzles him.

"Pennsylvania has made it much more political," says Eadington. Allowing legislators and government appointees to hold a 1 percent stake in gaming businesses is "almost surprisingly self-dealing." And letting individual legislators appoint regulators is not only "in some respects ... crazy," but also rare. Eadington says it isn't done in the dozen other states with commercial gambling agencies.

While some legislative leaders maintain that the selection process guarantees the broadest representation, the situation is ripe for inside fixes. "The ownership issues should be very transparent," says Eadington, noting that Pennsylvania is more secretive about releasing applicant information than other states.

For his part, Catania doubts Neeb would have passed a background check in New Jersey considering the Louisiana investigation. "It's about character, honor and integrity," says Catania, who recalls waiting six weeks to take his job while investigators did a background check on him.

"They keep making one mistake after another," says Alan Woinski, editor of the Daily Gaming Industry Report newsletter. "They all look like fools."

Even Perzel, one of the gambling law's authors, joined the reform movement on Aug. 8, calling for the Senate to update an existing 93-page bill to amend the Gaming Act, a bill that has bounced between the House and the Senate over the last year, but has sat idle since March. Perzel has promised to bring the final Senate bill up for a vote in the House once the Senate finishes its revisions.

Sen. Vincent Fumo, who worked with Rendell on the original bill, has another package of changes that would strip the city zoning board of its powers to set building size limits on casinos. (The proposal angered many residents along the Delaware waterfront where four sites are proposed.)

Rendell, a vocal gaming proponent, said in recent weeks that he favors changes to the two-year-old Gaming Act, but he hasn't said specifically what he wants.

Despite the mounting criticism, the board and its top management insist they want what's best for the public. Spokesman Doug Harbach says the criticism is overblown and noted that the board has investigated 1,200 businesses and individuals to date. Despite cries for more transparency, Harbach claimed the board is legally bound to keep that information secret.

"What I'm seeing are a lot of good things," says Harbach. "This agency has been built from scratch, so there are going to be growing pains."

(k_haney@citypaper.net)