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Video poker machines invite confusion

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Saturday, Sept. 7, 2013, 12:01 a.m.
 

The first time law enforcement took the video poker machines out of his Mt. Washington bar, Gildas Kaib swore he'd never put them back. Following a second bust, he meant it.

“After I went to jail, that was it. There were no more machines,” said Kaib, 65, of Upper St. Clair, who spent a night in jail when he was arrested and charged with operating three gambling machines at his now-closed Mt. Washington bar.

Kaib thought of that day in 1996 on Friday when he read about the state attorney general's bust of an illegal gambling ring operating largely in the Mon Valley. The 16 defendants are scheduled to be in court Sept. 12.

He questioned why local governments get the first cut of what is widely known to be an unlawful practice.

“Just the fact that you go in and get a license, you're giving them the name and address of a place with three poker machines,” he said.

A level of expertise that rarely exists on the local level is required to tell if a video machine is set up for gambling, said Lt. James Jones of the Pennsylvania State Police Bureau of Liquor Control Enforcement's Pittsburgh Division. Municipalities register the machines ostensibly under the belief that they are for amusement only, he said.

“In some cases, the business owner actually believes because a city official or member of law enforcement came in, collected a tax and gave them a sticker, that the machine was inspected and deemed legal,” Jones said. “Some view it as a tacit approval to operate the machines the way they've been operating them.”

Among those charged Thursday as part of the gambling ring bust were target Ronald “Porky” Melocchi Sr., 54, of West Newton, who owns Glassport-based Back Alley Vending; Forward police Chief Mark Holtzman, 57; and McKeesport City Councilman Daniel Carr, 55, who owns Viking Restaurant and Lounge where investigators said they seized 16 of more than 350 gambling machines in the case.

The confiscated devices came from municipalities that require businesses to pay an annual amusement fee.

Canonsburg, Glassport and West Mifflin charge $500 per machine, prosecutors said. McKeesport charged $240 for up to two machines, $1,500 for four and another $250 for each machine after that.

McKeesport officials did not return a call seeking comment.

Pittsburgh charges $579 annually to register poker and other casino-type machines. The city collected more than $315,000 this year for 545 such machines registered by local businesses.

Penn Hills charges $1,000 per casino-style machine and registered 61 this year.

State Rep. Ted Harhai, D-Monessen, introduced a bill this year to legalize video poker in taverns, clubs and restaurants across Pennsylvania. Proceeds would be split among the vendors, business owners and state, which then would allot a certain amount back to local governments instead of allowing them to collect per-machine fees.

“Municipalities might balk at that because they've been charging these taxes on these machines and makingmoney,” Harhai said. “But it's an illegal business. You can't have it both ways.”

Legalizing video poker would lead to regulation and give an idea of how big of an industry exists, Harhai said.

“My sole goal was to legalize it to keep people from getting arrested for something we all know is out there,” he said. “They are out there. Many clubs and taverns would go under without them.”

Kaib said he didn't get rich from proceeds from his machines, which in the 1990s each earned him about $1,000 per month — or about $36,000 per year before taxes, which he said were paid despite the money's origins.

“They paid my real estate taxes, my electric and gas bills. And that's it,” Kaib said. “As far as me having a Cadillac or something extravagant, no.”

State Rep. Eddie Pashinski, D-Luzerne County, said he plans to reintroduce a bill this month that would allow video lottery games similar to poker and slots in restaurants, bars and clubs. Proceeds could lower property taxes or go to municipal coffers as well as provide a cut to businesses, vendors and casinos.

“The bottom line is it's here, and it's not going to go away,” Pashinski said of video gambling.

West Virginia in 2001 allowed limited video lottery games in businesses with liquor licenses. The 7,500 machines statewide grossed $191 million last year.

State police estimate more than double that number of gambling machines operate illegally in Pennsylvania.

Harhai said there must be a fairer way to address the issue than by arresting business owners.

“I think it could be done,” Harhai said, “if all hands are on deck and all hands are above the table.”

Jason Cato is a staff writer for Trib Total Media. He can be reached at 412-320-7936 or jcato@tribweb.com.

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