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Narrowing the odds for slots sabotage
Gaming board zeroing in on computer to track revenue
Wednesday, January 26, 2005

HARRISBURG -- State Revenue Secretary Greg Fajt will soon buy a sophisticated central control computer system that will keep track of the wagering and money-handling at all 61,000 slot machines that could eventually exist at 14 casinos across Pennsylvania.

Fajt, a nonvoting member of the state's new Gaming Control Board, told the gambling regulators yesterday he expects to complete the purchase by next month. About 60 providers were notified last year of the state's need for the computer.

That list was whittled down to nine, which are being further reduced to two or three finalists, from which the winner will be selected.

The computer will be set up in a central location, perhaps at the revenue department in Harrisburg or perhaps somewhere else in Pennsylvania. That decision hasn't been made yet.

The state's new law on expanded gambling, enacted in July, provides $21 million to the revenue department to help bring slot machines to Pennsylvania. Most of that money will go for the computer, but its exact cost isn't known yet.

The slots law also provides $7.5 million for state police, who will conduct financial and criminal background checks on prospective gaming employees and companies that will operate casinos, along with another $7.5 million for the gaming board itself. It needs to hire 150 to 200 permanent employees plus financial and gaming consultants and executive search firms. The allocation also will cover other expenses the board will have between now and June 2006.

The central control computer will be crucial for at least two reasons: It will be connected electronically to every slot machine at every casino in the state. Twelve large casinos, seven at racetracks and five at standalone locations, are allowed to have up to 5,000 slots each, and two resort hotels can each have 500 machines.

The computer will have the ability to detect tampering, unauthorized withdrawals or other illegal activity at each slot machine. That machine can be shut down from the centralized location until state regulators can determine if something improper has occurred.

Also, the computer will monitor the amount of money wagered at each slot machine and make sure the state receives its full 34 percent share of the net revenue, the amount available after winners are paid.

The firm Fajt selects for the computer contract will have extensive criminal and financial background checks done on its top officials, with lesser investigations done on lower-ranking employees.

The seven-member gaming board took several notable actions at its meeting yesterday. It created a three-member subcommittee to develop a policy on what, if any, verbal, written or personal contact will be permitted between board members and employees and officials of companies that apply for state gambling licenses.

The board eventually will approve valuable licenses for slot machine makers and suppliers, casino operators and possibly other companies doing business with casinos, such as food suppliers, janitorial services, hotel employees and others.

The subcommittee includes board member Kenneth McCabe, a retired FBI agent from Pittsburgh; retired state Rep. Jeffrey Coy of Shippensburg, Cumberland County; and Joseph "Chip" Marshall, chairman of the Temple University Health System in Philadelphia.

Gaming board Chairman Thomas "Tad" Decker, a Philadelphia lawyer, said it's important for the board to avoid actual conflicts of interest with vendors and licensees as well as the appearance of such conflicts.

The gaming board adopted the state Legislature's policy on car leasing and travel reimbursement, which some critics have called overly generous.

That policy allows legislators, and now gaming board members, to have state-paid car leases of up to $650 a month, plus 18 cents a mile for reimbursement for trips to board meetings, most of which will be in Harrisburg.

First published on January 26, 2005 at 12:00 am
Harrisburg Bureau chief Tom Barnes can be reached at tbarnes@post-gazette.com or 1-717-787-4254.
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