Legislators want changes to slots ownership rules

Mark Scolforo

Thursday, Sept. 9, 2004 | 9:14 a.m.

HARRISBURG, Pa. -- A group of state representatives said Wednesday they plan to introduce legislation designed to prevent fellow members of the General Assembly from holding ownership stakes in the new slot-machine industry.

Their proposed changes to the landmark gambling law passed in July could reopen debate on the measure that authorized up to 61,000 machines at 14 venues, with a third of the revenues going to reduce property taxes.

State Rep. John A. Maher III, R-Allegheny, said at a news conference in the Capitol he had dozens of sponsors for a measure he expects to introduce next week.

The current law allows state legislators to own securities worth up to 1 percent of a slots operation -- a provision that was designed to accommodate secondary ownership through mutual funds or pension funds. It has generated a measure of public outrage and editorial criticism since being reported in the aftermath of the slots debate, although other states with gambling allow legislators to have ownership shares.

Maher said his legislation will allow exceptions for those types of ownership and for unlimited market buys of securities that are available to the public. Those market purchases, such as stock in a publicly traded company, are currently subject to the 1 percent restriction.

Maher wants to ban any ownership interest in slots operations or their suppliers and prohibit all financial transactions with slots companies. He said state government pension funds should also be barred from investing in slots-related businesses.

He called the 1 percent ownership limit "just one of many holes in this law that are, in fact, invitations to corruption."

"The object here is to ensure that public officials do not, cannot exploit their position for personal gain," Maher said. He said language in the state Ethics Act prohibiting public officials from profiting from their position was inadequate in the case of slots.

Gary Tuma, a spokesman for Sen. Vincent J. Fumo, D-Philadelphia, who had a central role in writing the slots law, said changing the 1 percent rule isn't a bad idea in itself, but added that the changes being floated by Maher raise questions of their own.

"It's a big leap between providing a list of intentions and actually drafting something in legislation," Tuma said.

Tuma said state law defines securities so broadly that Maher's proposal to prohibit all forms of ownership, "not just securities," is already in force.

State Rep. Paul I. Clymer, R-Bucks, said it's possible that a debate on the measures he and Maher support could become a vehicle for slots opponents to launch a wider attack on gambling. The gambling bill passed the Senate 30-20 and the House, 113-88.

"There's a lot of energy, there's a lot of resentment, if you will, by a majority of the Republican caucus that we even did this bill," Clymer said.

House Democrats also have introduced a bill that would entirely ban ownership of slots by lawmakers. It was referred to the Tourism and Recreational Development Committee today.