Pennsylvania:  Lawmakers call for crackdown on illegal gambling, booze sales

 

Source: Trib Live

Natasha Lindstrom

Sept. 19, 2017

 

State Sen. Chuck McIlhinney has a message for the tens of thousands of Pennsylvania businesses believed to be harboring an illegal slot machine or bending liquor rules: You’re going to get caught.

 

“As long as it’s illegal, we have a duty to enforce it,” said McIlhinney, a Republican from Bucks County who chairs the Senate Law and Justice Committee.

 

McIlhinney took a break from agonizing over the state’s far-reaching budget woes Tuesday morning to oversee a public hearing on two issues spurring growing concerns: illegal gambling devices installed in bars, markets and truck stops; and so-called “stop-and-go” stores that circumvent liquor license rules.

 

The city of Philadelphia has long grappled with stop-and-gos – such as bodegas that obtain “R” (restaurant) liquor licenses but sell only candy or snacks and bypass the 30-seat rule.

 

In some cases, 30 chairs are kept folded against a wall or chained up in a back room locked to the public, state police Maj. Scott Miller told committee members. In others, clerks serve Dixie cups of liquor out of a walk-up window.

 

“It’s popping up all over the state; I’m certain that it exists in the Pittsburgh area,” state Rep. Sharif Street, D-Philadelphia, said shortly after the hearing in Harrisburg. “It is a problem that started in Philly, but over the course of 30 years has now become a problem in every part of the commonwealth.”

 

About 40 stop-and-go cases are pending before judges. Penalties can range from $50 to $1,000, with a typical first-time fine of $150 to $250.

 

Illegal gambling machines also have been on the rise – particularly in the past year as legislative debate has intensified over how to expand the state’s gambling revenues .

 

Miller, who took the helm as director of the Bureau of Liquor Enforcement last year, said he’s made a concerted effort to gauge the scope of the problem and ramp up enforcement.

 

The bureau has seized about 650 machines a year since 2011 – including 386 this year, Miller said.

 

The violations should cause consumers to be wary, since illegal gambling devices are unregulated, “have no set payout requirements and payout retention may be changed by the manufacturers or vendors,” Miller added.

 

Penalties for illegal gambling devices can include felony violations of corrupt organizations for vendors and misdemeanors for businesses.

 

“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 he recently had officials track the number of suspected illegal gambling machines found over a four-week period.

 

The findings: Of 890 licensed establishments visited, 376 – or 42 percent – had at least one suspected illegal gambling machine, with 771 machines flagged in total.

 

Such “venues create an extra area of concern,” such as underage gambling and unregulated payout requirements, Miller said.

 

It’s easy to see the incentive behind shirking the rules, Miller noted.

 

“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.”

 

State police further say they have “received information from liquor licensees who have stated they believe the machines are illegal, but have resorted to putting them into their establishments because they are losing business to other liquor licensees who have the machines in their facility.”

 

McIlhinney said he and fellow senators are pushing for a combination of aggressive enforcement, legislative changes and educational outreach to reduce liquor and gambling violations – as well as the current two-year lag time it takes to nab offenders.

 

He’d like to see language to do so added back into the fiscal code after it was stripped out of the latest version to narrowly clear the House last week.