Wednesday, April 6, 2005 | 9:14 a.m.
HARRISBURG, Pa. -- It seemed almost simple: Legalize slot machines, pull the lever and provide $1 billion a year in property tax relief for Pennsylvanians.
Except for the usual opposition to gambling on moral grounds, what was there not to like?
But just months after what seemed the perfect political marriage, Pennsylvania's move toward becoming at least the 36th state to offer some form of electronic gambling has become as complicated as a game of craps.
The first slot parlor is not expected to open until late 2006 at the earliest, but already, there have been all kinds of complications and fallout.
The validity of the slots law, rushed through the Legislature, is being challenged in court. School districts statewide are balking at accepting the tax relief because of the strings attached.
The Erie mayor has been indicted in connection with a land deal near a proposed gambling site. A state senator from Philadelphia is being investigated in a casino land purchase that could net him millions.
And the governor's first choice to head the state gambling board resigned after only a few weeks, saying he was tired of being hounded by negative news stories, including a report he once testified for a boxing promoter with alleged mob ties.
What Pennsylvania is going through comes as no surprise to experts on casino gambling. The state, after all, is late to the game.
With any expansion of gambling "you're going to have a political hot potato and have at least individual corruption tied to gaming," said William Thompson, a national gambling expert and public-administration professor at the University of Nevada, Las Vegas.
"It's probably called disorganized crime," Thompson said, "not organized crime."
Pennsylvania is also far from being the first state to use a worthy cause to justify expanded gambling.
Thompson's view: "When they have to come up with some convoluted form to give away the money, they don't need the money."
The law passed last year by the Pennsylvania Legislature, after years of futile attempts, authorizes the installation of up to 61,000 slot machines at 14 parlors across the state.
The suit against the law alleges violation of a state constitutional provision that says a bill cannot be amended to change its original purpose, and must address a single subject.
In this case, legislators transformed a one-page bill to allow state police to fingerprint applicants for horse-racing licenses into a 145-page law creating a gambling industry.
"No good deed goes unpunished," said Sen. Vincent J. Fumo, D-Philadelphia, who played a major role in the slots legislation. "This is the most controversial and far-reaching thing we've done in 30 years, so you're going to have bumps in the road along the way."
Fumo said slot proponents knew they had a flawed vehicle legalizing slots but ran with it anyway because "once you've voted for it, it's easier to vote for it again."
He said they will quickly introduce a substitute bill if the lawsuit is successful.
But the biggest struggle over the slots law deals with the companion legislation funneling gambling proceeds to homeowners, via their local school districts. It's become a fight over who should control public-school spending.
Homeowners will get slots-generated tax relief -- averaging about $330 per household -- only if their local school boards agree to participate in the program.
Participating boards must, as part of the deal, increase local income taxes to reduce dependence on property taxes. And they will be barred from raising property taxes by more than the inflation rate without voter approval, though there are 10 exceptions.
Many school districts say such restrictions will unfairly tie their hands, and are seeking a postponement of the May 30 deadline for signing up or opting out.
Gov. Ed Rendell, a Democrat who promised to legalize slots and provide property-tax relief during his 2002 election campaign, said he believes any legal challenges can be surmounted and that the state Gaming Control Board will maintain the integrity of the industry.
At the same time, Rendell has been taken aback by the school boards' resistance and has been forced to jawbone the boards in an effort to get them to go along. At a recent news conference, he said it was "nuts" that some boards might refuse the state money.
In the only gambling-related case to result so far in criminal charges, Erie Mayor Rick Filippi faces state charges including criminal conspiracy and conflict of interest for allegedly using inside knowledge to invest in real estate near a site once proposed for a race track and casino. He has denied any wrongdoing.
Federal prosecutors, meanwhile, have asked the state to turn over records from a land deal with a company partly owned by Sen. Michael Stack, D-Philadelphia. The company stands to make millions if a casino operator that subsequently took an option on the site can win a license to operate a slots parlor there. Stack has denied any wrongdoing.
Republican state Rep. Daryl D. Metcalfe, of Butler County, an outspoken critic of the gambling law, said he is not surprised by the investigations.
"I think it's the nature of the beast," he said.
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