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Next for Pennsylvania: Putting Its Cards on the Table

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John Brokopp has seen a lot of states like Pennsylvania in the early stages of their addiction to gambling revenue.

"It all starts the same way," says Brokopp, a gambling author, handicapper and newspaper columnist from Chicago. "States need a new source of revenue, or they want to bail out their racetracks. They all seem to start with one facet of gambling -- lottery or slots -- and have no intention of expanding to anything else. But something always happens."

For example, when Iowa became the fourth state to introduce casinos (apart from those owned by Indian tribes) in 1991, the state originally prohibited gamblers from losing more than $250 a day over their original buy-in. Starting with $100 in chips, for instance, allowed a person to lose a maximum of $350 that day.

Then, in 1992, neighboring Illinois started full-service gambling -- including slots and table games -- on riverboats, and without loss limits. That attracted a lot of customers from Iowa, Brokopp reports. "As you can imagine, Iowa quickly dumped its loss limits."

Here in Pittsburgh, it will be at least March 2008 before the first dollar is slid into a slot machine at the North Side casino that state regulators approved in December. But at least one Pennsylvania legislator is already suggesting the next step: adding table games, which can include blackjack, roulette, craps and poker.

"The staff is working on draft legislation at this time," says Tom Andrews, a spokesman for state Rep. Bill DeWeese (D-Waynesburg). "The original concept of slots was to provide property-tax relief, and table games would just provide another means to provide that."

No table-game legislation has yet been introduced, Andrews emphasizes, noting that DeWeese had lobbied for table gaming even before the original slots legislation was passed. DeWeese proposed such legislation in February 2005 but never introduced it.

Kate Phillips, spokeswoman for Gov. Ed Rendell, believes table gaming won't happen in Pennsylvania any time soon. "It took us almost two years to move the slots legislation forward," Phillips says. "The governor doesn't even expect table-game legislation under his watch," which lasts through 2010. "He wants to see the slots up and running and see some of that revenue start to come in."

But the proposal is worth exploring, says Andrews -- because neighboring states already have more gambling opportunities or are scrambling to outdo us. "Rep. DeWeese feels that we are playing catch-up when it comes to slots instead of getting ahead of the curve," he says, "and ahead of states with other forms of legalized gambling."

In New York, there are two full-service casinos owned by the Seneca Gaming Corporation just a few hours away. Pittsburghers can be in Atlantic City in less than six hours, or spinning the reels on West Virginia's slot machines in less than an hour. A measure to expand gambling possibilities in the Mountain State could be approved by March: A measure currently pending in the state legislature would allow the four counties with slots parlors to vote on adding table games.

West Virginia Delegate Randy Swartzmiller (D-Hancock County) says his state has seen the benefits of slots revenues, and needs to respond to the added competition.

"Table games would allow us to offer something that Pennsylvania is not," says Swartzmiller. "Also, we just don't have Pennsylvania to worry about, because Ohio has been trying to enact slots gaming for some time. [Gamblers from] those two states represent a large chunk of our business. We sat by for years and watched the competition drive us out of the steel business, so we're definitely keeping an eye on what our new competitors are doing."

Seneca Gaming Corporation, which sees a lot of customers from Pennsylvania in its two casinos (at Niagara Falls and Salamanca, New York, 65 miles east of Erie), has seen a steady increase in revenue from table games since it began operating in 2004. According to the company's most recent annual report, Seneca made more than $57 million from table games in 2004 -- a sum that grew to $66 million last year.

Mike Speller, senior vice president of gaming operations for Seneca, says the company's Salamanca casino recently expanded its slot and table-game operations, unveiling a new casino floor late last year.

"That gives us the ability to offer a full-service casino to our guests rather than a limited slots-only facility," Speller says.

New York is not the only place experiencing success with table games. In 2006, Indiana casino customers dropped $1.9 billion at 11 casinos near Chicago.

"That puts a lot of pressure on states without gambling," author Brokopp says, "or states with limited gambling options."

While slot machines make more money than table games -- and table-game space is losing market share to slots nationwide -- table games have a large, loyal following. And most gamblers want the full casino experience.

Bruce Barron of Bethel Park, spokesman for the anti-gambling group No Dice Pennsylvania, says table games will indeed create the full casino experience: even greater losses by those who can least afford it, and a new crop of gambling addicts. But the prospect of the Pennsylvania legislature considering table gaming soon is "not surprising," he says.

"Have you ever seen a lion, upon reaching its prey, be satisfied with a couple licks?" Barron asks. "The rapacious casino industry ... is always happy to reap greater profits." Table gaming is only being "supported by legislators who want to get their hands on more government revenue regardless of the net economic and social impact on the citizenry," he concludes.

Even table games won't be the last step for Pennsylvania, Brokopp predicts. Those states that have table games are already looking at the next frontier -- sports wagering and stand-alone poker parlors.

Illinois, for instance, is investigating how to cash in on poker's popularity by allowing poker parlors in off-track betting sites. There are already local OTBs, owned by Washington County-based The Meadows, in Moon Township, West Mifflin, Greensburg and Harmar Township.

Poker's success is apparent in the proliferation of poker-themed TV shows, and also in the aggressive way the federal government has worked to ban online poker -- including legislation, passed in October, that made it illegal to use bank accounts and credit cards to pay for wagers.

Sports wagering will also eventually go national, Brokopp says. "Look at any sports page nationwide and they print the point spreads and the over/unders for every game imaginable. You don't think that's for the average fan, do you?"

However, any move to allow sports wagering would have to come at the federal level first. Congress prohibited sports wagering -- except in states where it already existed -- in 1992's Professional and Amateur Sports Protection Act. That legislation even blocked New Jersey from enacting its own sports-wagering legislation.

Currently, Nevada and Oregon are the only states that allow betting on sports other than horse racing. Nevada has no limits, while Oregon allows wagering on NFL football, with betting conducted through the state lottery system.

While Oregon has voted to end the practice at the end of this football season, Brokopp believes sports wagering's expansion is inevitable. According to the Toronto Star, nearly $2.25 billion was wagered in Nevada in 2005 on sports, whereas 1999's National Gambling Impact Study -- commissioned by the U.S. Congress -- put illegal sports betting in this country at $380 billion annually.

"It's only a matter of time before state governments stop fighting the demand for all types of legal gambling and work to develop a new tax base," Brokopp says. "States love their lotteries. It's the fair-haired child of the gambling industry, and also no bigger waste of money" for the consumer, since the odds of winning are astronomical compared to other forms of gambling.

"There are millions, if not billions, of illegal bets made every year," Brokopp concludes. "Believe me, there's some legislator somewhere not seeing that as a problem but as an untapped resource for tax dollars."

Bruce Barron of No Dice Pennsylvania, with the toy slot machine he uses to demonstrate the device's allure
  • Bruce Barron of No Dice Pennsylvania, with the toy slot machine he uses to demonstrate the device's allure

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