The state Legislature is expected to approve slots at racetracks next month.
Gov. Ed Rendell says Pennsylvania needs to keep gambling money from going to West Virginia or Delaware, which already have slots. But if his legislation passes, billions of dollars in profits from slots will not only go out of state, they will go out of the country.
In the following report, which first aired May 16, 2003, on WTAE Action News at 6 p.m., Team 4's Paul Van Osdol looks at who is getting rich on slots and what they are doing to lobby state officials.
The palatial headquarters of Magna International in Aurora, Ontario, is where you'll find founder and Chairman Frank Stronach -- that is, if you don't find him at his 17th-century estate in Austria, where he spends about half his time.
Stronach's company made $13 billion last year, mostly from manufacturing auto parts. But it also owns 15 racetracks, including the Meadows in Washington County.
In a documentary for Canadian television, the Austrian-born Stronach talked about his business philosophy.
Stronach: "The history of mankind has always been dominated by the golden rule, and still is. He who has the gold makes the rule."
Stronach has plenty of gold. He is Canada's highest-paid executive, earning $58 million last year.
He stands to make more if slots come to Pennsylvania. Besides owning the Meadows, Magna is also seeking a license for a thoroughbred track in Findlay.
There are other overseas owners who will benefit from slots.
Records show Watche and Rafi Manoukian own Philadelphia Park. The two brothers are Lebanon natives who live in London and control the track through a holding company in the Caribbean island of Curacao. They are also seeking a license for another track in Chester, Pa.
Van Osdol: "Should that be a concern that the profits are not going to stay here in Pennsylvania?"
Rendell: "It depends on what you mean by profits aren't going to stay here. The state is taking 35 percent of the gross in this industry, so a lot of that money is staying in Pennsylvania -- much more than an oil and gas company, much more than an insurance company."
Michael Geer, slots opponent: "The rest of that money lost by Pennsylvanians -- we're talking $1.5 billion to $3 billion a year -- will be going to enrich people out of the state or out of the country."
One of those out-of-state companies is Centaur Inc. of Indiana, the lead partner in a group trying to get a license for a harness track off Route 51 in South Beaver, Beaver County.
Team 4 has learned that members of the group contributed nearly $300,000 to Rendell's campaign or to political action committees associated with Rendell.
Centaur officials gave $110,000 to the Philadelphia Future PAC; $10,000 to Rendell's campaign; and $25,000 to Rendell's inaugural committee.
A partnership controlled by Ronald Rubin, who is also a partner in the Beaver County track, gave Rendell's campaign $145,000.
Rendell got plenty more money from gambling interests -- a total of about $800,000. In fact, one of his fundraisers was held at Harrah's casino in Las Vegas.
Rendell: "That money is appreciated, but it does not affect my judgment."
Geer: "That is the 800-pound gorilla that's really, I think, cheating the taxpayer, not getting a good deal for Pennsylvanians."
There are no records on what lobbyists are spending, but even Rendell acknowledges the lobbying has been intense.
Rendell: "The lobbying is fierce and very focused."
Some names are well-known.
Former Congressman Ron Klink is working for the Beaver County harness track group. Former Lt. Gov. Mark Singel lobbies for Penn National, a track near Harrisburg.
A not-so-familiar name is Cuyler Walker -- former chairman of the state Horse Racing Commission, which grants track licenses. He stepped down because his law firm is representing Charles Betters, who is seeking to build a thoroughbred track on Pittsburgh's South Side.
Geer: "Politicians are listening not to the voice of the people, but the voice of special interest groups. That's cheating the people, and that's the nature of the gambling lobby."
With billions of dollars at stake, some have wondered why Pennsylvania doesn't put up slots licenses for public bid.
Other states have been able to charge up to $700 million for individual casino licenses. But that's not even being discussed in Harrisburg -- perhaps an example of the gaming industry's power.
Paul Van Osdol, www.thepittsburghchannel.com
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