Why is state preparing to give away gambling licenses?
By Tom Murse
Updated Feb 19, 2007 15:58
The Republican lawmaker, a staunch opponent of new gambling initiatives, is drafting a measure that would require the state to either sell or auction off slot licenses to the highest bidder.
By contrast, legislation expected to hit the Senate floor as soon as Tuesday, the licenses would be awarded -- at no cost -- to as many as eight racetrack operators statewide.
"These licenses have tremendous value,'' Armstrong said. "Why should we hand them over to multi-multi-millionaires? I think it just doesn't make sense to give them away.''
The eight slot-machine licenses could raise at least $2.1 billion -- enough to cover the state's estimated budget shortfall -- a Washington, D.C., investment banker told the state House and Senate last week.
"If slot machines are brought into the commonwealth, Pennsylvania taxpayers should get a fair deal,'' said the investment banker, Jeff Hooke. "Besides being the biggest giveaway in Pennsylvania history, current legislative proposals would only make a bunch of wealthy individuals even wealthier.''
Sen. Robert Tomlinson, a Bucks County Republican, could offer his slots initiative to the full Senate as soon as Tuesday, if he feels he has enough votes. The measure would need at least 26 votes, a simple majority, for approval by the 50-member Senate.
Armstrong said Tomlinson's initiative -- which would authorize up to 3,000 slot machines at each of eight racetracks -- does not have the votes as of today. The bill is, however, a work in process.
"They're a vote or two short, but that can change as they massage this bill,'' said Armstrong, of Refton.
A spokesman for Tomlinson could not be reached for comment on Armstrong's idea this morning. But in a Capitolwire.com report last week, Tomlinson dismissed Armstrong's proposal for auctioning the licenses.
"He wants to confuse the issue,'' Tomlinson told the online news service. "If you tax high, you can't ask for money up front, (and) we're taxing pretty high.''
Tomlinson's plan would tax racetracks at 35 percent on the revenue from slot machines.
Tomlinson's bill was unlikely to win approval from the full 11-member Senate Finance Committee, meaning that it wouldn't make it to the full Senate, an aide to Armstrong said this morning.
As a result, Tomlinson was preparing to introduce the slots initiative as an amendment to another bill, thereby circumventing the committee review process and taking it directly to the Senate floor.
It is unclear what impact Armstrong's planned amendment would have on Tomlinson's slots initiative. Armstrong did say that there is some bipartisan support for selling or auctioning off the licenses.
"I've been getting calls from both sides, saying, "That makes sense to us,''' Armstrong said. "They feel it has some merit. If we're going to get $100 million per track, it's better than what we have now. We need the money.''
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