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Gambling control board keeps sleeves rolled up

| Thursday, Dec. 16, 2004

HARRISBURG -- The state's new Gaming Control Board could review more than 27,500 license applications for businesses and individuals over the next 14 months as it prepares for the opening of slot machine casinos.

The heavy workload will continue as employees come and go at gambling facilities, and as license applications are renewed each year by law, consultants told the board Wednesday.

The board will start the process when it meets again in mid-January by approving an application form for slots manufacturers and suppliers, making it available to companies shortly thereafter. It could do the same for gambling board employees, casino operators and vendors of all types in February or March.

"It's more than just developing an application. I think it's a whole regulatory approach we have to think about" before applications begin pouring in, Mary DiGiacomo Colins told her six fellow board members as they closed a two-day organizational meeting in Harrisburg.

The board will likely require all applicants to undergo background investigations - some more extensive than others. That includes non-gambling vendors, a category legislators left to the board's discretion in the slots law passed in July. New Jersey, which has strict gambling controls, requires all vendors doing business over $75,000 to be licensed.

"I think the commissioners will go for (licensing vendors), although we've not voted on that yet," said Chairman Thomas "Tad" Decker, a Philadelphia attorney who will step down as managing partner of Cozen O'Connor at the end of December.

Colins, also from Philadelphia, resigned her seat on Philadelphia County's Common Pleas Court recently. Other members also have suspended their work in the private sector, Decker said.

The board authorized Decker to negotiate a contract with New York-based PricewaterhouseCoopers for advice on policy and staffing matters.

"They can help settle conflicting information provided by other consultants" hired by the state Revenue Department, Decker said. He could not estimate the cost of hiring the firm and said the contract initially would have no time limit.

The board will spend the next year building an agency and establishing regulations for slots gambling at 14 venues. The law allows up to 61,000 machines that will be connected to a central computer.

PricewaterhouseCoopers has advised gambling commissions in several states and foreign countries, Decker said. The company will not be permitted to accept clients with gambling-related business in Pennsylvania while advising the board.

The board also approved an equal employment opportunity document that spells out a plan to seek diversity in gambling businesses, something it was legally required to do before Jan. 5.

Decker said board members reviewed drafts Tuesday night and individually submitted "minor changes" in language before voting yesterday. He would not disclose the changes and said the final version would be posted on the board's Web site, www.pgcb.state.pa.us .

The diversity plan is "a standard plan, similar to what other agencies have," Decker said, but it does not guarantee that women- and minority-owned companies will get a certain share of jobs or business contracts.

"I don't think it ensures anything," Decker said. "Nothing guarantees anything, just as you can't ensure that (criminal elements) won't infiltrate a casino or supplier."

Casinos are vulnerable to employee theft, organized crime and cadres of cheaters who target new gambling facilities in particular, consultant Tom Sterling with Information Services Group of New Cumberland told the board.

Sterling recommended the board require strict surveillance and security measures at gambling parlors. It should also mandate thorough background investigations on casino operators, slots manufacturers and suppliers, as well as senior employees for the state and the industry, he said.

"This is very much a game of hide-and-seek," Sterling said. "...It's what you don't see that can nail you in this business."

Consultant Lynn Stelle proposed the board be ready to approve application forms for an estimated 100 manufacturers and suppliers in January, along with 1,000 employees for those companies. They must be licensed 90 days before casino operators can apply for licenses.

Stelle estimated that - in addition to licenses for casinos at horse-racing tracks, free-standing facilities and resorts - the board could review as many as 1,400 applications for senior employees and 14,000 lower-level employees at gambling venues. The board could hire 150 employees of its own.

If the board requires licensing of non-gambling vendors, such as providers of food and laundry services, 11,000 more applications could be submitted, Stelle said.

He suggested the board require application fees of $50,000 from slots manufacturers and $25,000 from slots suppliers. All applicants should also pay a $5,000 deposit toward the cost of investigations, Stelle said.

The board agreed to use the state police to perform initial background investigations on board employees and manufacturers and suppliers. State police also will play a role in security and surveillance at casinos once they are operating.

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