Sunday, July 25, 2004

Forever Gambling Sell Off

So, the $50-million slots license sale is "forever."


Gambling isn't my cup of tea. But, if those in Harrisburg are intent on getting drunk on the new incomes, just sell the rights for one generation. Allow our children and our children's children do the same.

Simple solution: Sell the $50-million licenses / rights for 10, 15 or 20 years. Not forever. Make those license expire. Sunset them. Then, a future auction can occur.

Senator Costa's email to me on July 20:

Thank you for contacting me to express your belief that the licenses authorizing the operation of slot machines in Pennsylvania should be issued for a limited period rather than an indefinite period. I appreciate your interest in this legislation and I understand your contention that the Commonwealth could generate additional revenue if licenses were issued for a definite period.

As you may be aware, the legislation that enacts the gambling expansion does not explicitly limit the term of a slots license. The license will be issued to the groups deemed most appropriate by the Gaming Control Board, and those groups will be obligated to pay the $50 million license fee. The licenses are subject to annual review, and the Board may revoke the license issued if there is cause to do so. If the license is successfully renewed, however, there is no additional fee for the renewal. If the license is revoked, however, it would presumably return to the Board who could re-assign it and the new licensee would again be assessed a $50 million fee. I realize that this proposal may not generate as much revenue as is possible, but it allows the Commonwealth to evaluate the applicants based on their merits rather than the amount that they can pay. I am confident that this legislation provides a sound licensing system that will allow the Commonwealth to create an honest and well-run gambling industry.

The press watchdogs have ask those questions of the represenatives and
senators. Tom Barnes wrote offline: "We've already asked such questions, mark, and legislative leaders have rejected the idea; it's a onetime $50 mil fee."

Citizens ... the time to put a bug into the ears of those in the State House and State Senate has passed. Some tried. A "historic bill" would be less of a historic give-a-way had there been a term limit. A license in Illinois sold for more than $500-million. Ours, at $50-million and forever, are selling for much less than is prudent.


Anonymous said...

Hey, given the way that PA typically does things, at least they are having any auction at all, and not an obvious insider kick back deal.

Jonathan Potts said...

They won't be auctioned. As Mark notes, they will be sold for a one-time fee of $50 million, a pittance of what many experts think they are worth. And don't think that political influence won't have a lot to do with who gets them.

Anonymous said...

Rats, yet another example of standard operating procedure for Pennnsylvannia.

It was not clear to me in Mark's original post that it was a fixed price awarded license. I thought his point was that it was a one time auctioned license. The reality is even worst. Not even a fig leaf.