Pennsylvania gambling board tackles ethics, hears slots plan

Mark Scolforo

Wednesday, Dec. 15, 2004 | 9:16 a.m.

HARRISBURG, Pa. -- Meeting for the first time since the state legalized slot machines, Pennsylvania's new gambling commission adopted an ethics code Tuesday and began searching for top-level executives to implement its policies.

The daylong meeting by the Pennsylvania Gaming Control Board was its first step toward making a reality of the slot-machine gambling -- and billions in projected revenues -- that the Legislature approved this summer.

A timeline provided to the board by a consultant suggested the first machines could be up and running under conditional licenses within nine months after they start taking license applications.

"You can see, from just the first day's session, how many difficult decisions are going to be involved in the process," said board member Mary DiGiacomo Colins, a former Philadelphia judge.

The seven-member board gave chairman Thomas A. "Tad" Decker authority to seek a suitable headquarters and to hire a lawyer to defend it against at least two lawsuits in which the board is a defendant.

It also heard presentations on the massive computer system that will send data from up to 61,000 slot machines directly to the agency's headquarters, and about the myriad of security challenges ahead.

"Every coin acceptor, every dollar acceptor can be compromised. Every (slot-machine) door can be ripped open," warned Gaming Laboratories International Inc. president James R. Maida.

The first vote was to unanimously adopt the state Ethics Act as its code of conduct, but several members said they may want to amend it later on to include rules about contact with lobbyists and license applicants.

"I think that any contact with a lobbyist should be documented and the board should be aware of it," said board member Kenneth T. McCabe, a former Pittsburgh FBI agent.

The board also voted to advertise its meetings and keep records of the proceedings.

"We are committed to conducting our business in as transparent a way as possible," Decker said in his opening remarks.

Decker, a former managing partner of a large Philadelphia law firm, indicated he had already begun looking for a headquarters location, and said two sites in downtown Harrisburg showed promise.

"One space we like a lot, and a back-up space we like a little less," he said.

Decker also was authorized to contract with headhunting firms to aid the search for an executive director, a chief of security and a general counsel. At least temporarily, the panel will get assistance running its day-to-day affairs from the Revenue Department, which anticipated some needs by purchasing 50 personal computers, 50 phones and other office equipment.

Lynn Stelle, a Revenue Department consultant, gave the board a "best guesstimate" timeline under which some slot machines could be in operation six to nine months after the first applications are filed, and provided an organizational chart to assist in hiring. It is too soon to say when the board might begin to accept applications.

Slots are authorized at up to 14 race tracks, resorts and stand-alone venues in the state. A third of the projected $3 billion in annual revenues will go to reduce local property taxes.

Among the roughly 150 people who attended the first meeting was Mark L. Hutchinson, director of public gaming and international sales for JCM American Corp. in Las Vegas, a leading manufacturer of dollar-bill validating equipment. He said he was watching to see what restrictions the board might place on machines it approves for use.

"This is the largest machine market east of Las Vegas to open up. We've got an obvious interest in how soon and what's going to happen in Pennsylvania," Hutchinson said.