As Pennsylvania lawmaker grapple with measures to close a .2 billion budget gap, the issue of gaming expansion is on hold. Part of that expansion effort is the contentious issue of legalizing and regulating video gaming terminals, or VGTs, in bars, taverns and other liquor-licensed establishments across the state.
Prominent members of the Republican-controlled state House of Representatives are pushing VGTs as a way to get additional revenue for their cash-strapped districts, with the state Senate pushing back on VGTs as a cannibalization of current casino revenues. House members, though, have argued that legalization and regulation of VGTs would simply allow the state to earn money from machines that are already in place illegally.
Republican State Senator Chuck McIlhinney last week held a public hearing aimed at taking a first step toward VGT legalization by eliminating the illegal games cited by House leaders. McIlhinney held a public hearing in Harrisburg last week to call for a crackdown on illegal VGTs in bars across the state.
The problem is twofold, he said: illegal gaming machines in bars, taverns and truck stops; and machines in so-called “stop-and-go” stores that exploit a loophole in the liquor-license law. Stop-and-gos are small establishments that may only sell candy or snacks, but obtain liquor licenses by saying they seat 30 patrons, a requirement for a liquor license. State Police Major Scott Miller told McIlhinney’s Law & Justice Committee at the hearing that many of the establishments meet the 30-seat requirement by stacking 30 folded chairs against a wall or in a back room.
According to a report in the Pittsburgh Tribune-Review, Miller told the panel that state police have seized around 650 illegal video gaming machines per year since 2011. “Despite these efforts, illegal electronic gambling devices are present in Pennsylvania licensees’ liquor establishments,” Miller said. “These cases take time to develop, they involve undercover operations and significant expenditures of time and money.”
Miller said his bureau recently tracked illegal gambling machines found over a four-week period. Of 890 licensed establishments visited, 376, or 42 percent, had at least one suspected illegal gambling machine, with 771 machines flagged in total.
“This is a multimillion-dollar industry, as machines generate $100 to $1,000 of income per week, while occupying a very small footprint — approximately 3 by 3 feet square—within the business,” Miller said. “These proceeds are usually paid to the business owners by the vendor in cash and may or may not be reported for tax purposes.”
According to the Tribune-Review report, police say liquor licensees know the machines are illegal, but feel they have to install them in their facilities because they are losing business to other liquor licensees who have the machines.
