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Pennsylvania governor signs bill to bring in 61,000 slot machines

Published: Monday, July 5 2004 6:02 p.m. MDT

BENSALEM, Pa. (AP) — Gov. Ed Rendell signed laws on Monday authorizing 61,000 slot machines in Pennsylvania — more than any other state except Nevada — and using most of the state's share to pay for a $1 billion cut in property taxes a year.

Revenue from the slot machines, which would be located at 14 sites, including seven horse tracks, would be used to cut property taxes by an average 20 percent.

Rendell, a Democrat who had made slots-for-tax-relief the centerpiece of his 2002 election campaign, signed the bills at Philadelphia Park, the thoroughbred track that produced Kentucky Derby-winner Smarty Jones.

"It isn't a panacea, but it certainly isn't the demon it's been made out to be," Rendell said. "It's a good, significant step on the road to property-tax relief."

Opponents of the slots bill predict a proliferation of crime, gambling addiction and other social ills. They complained that the bill was crafted in secret by a handful of party leaders and lacks adequate safeguards against corruption and conflicts of interest among members of the state panel that would oversee the slots parlors.

Proponents said the law would allow the state to recapture much of the money Pennsylvanians pour into slot machines in neighboring states and help revive the state's horse racing industry.

The property tax reduction will not be immediate. Officials say the initial relief would be deferred until at least 2006 to allow time for the slots parlors to obtain licenses and gear up.

Of the roughly $3 billion a year slots are expected to generate, the licensees would keep 48 percent, the state would get 34 percent and the rest would be divided among the equine industry, public construction projects, and counties and municipalities in which slots parlors are located.

Ultimately, state taxes on slots are expected to generate $1 billion a year for reducing property taxes in all but one of the state's 501 school districts. In Philadelphia, there would be reductions in the city's income tax.

A new gambling commission would issue slots licenses to racetracks, resorts and other sites for fees ranging up to $50 million apiece. Seven licenses would be granted to horse-racing tracks, including ones not yet built. Five licenses would be given to standalone sites and two licenses would be given to resorts.

The law makes Pennsylvania the 18th state to legalize slot-machine gambling, not including casinos run by Indian tribes, according to the American Gaming Association.

The House approved the measures Sunday. The Senate approved the slots bill Friday and the tax bill early Saturday.

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