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February 21, 2014

Few Pa. taverns express interest in betting games

HARRISBURG — About 2,000 taverns were predicted to grab licenses to run small betting games, pouring $156 million into state coffers. Three weeks into the application period, just six bars have asked for a license.

Some legislators are worried about their projections.

If things don’t pick up quickly, said Sen. Jake Corman, chairman of the Appropriations Committee, “We’re going to make the Obamacare rollout look robust.”

“Our budget is going to be out of whack,” Corman said.

The law allows taverns and restaurants to apply for a license to operate pull-tab games, daily drawings or raffles. It requires that 65 percent of proceeds go to state and local taxes. Prizes are limited to $2,000 for a single game and $35,000 over seven days.

Only three tavern applications – for establishments in Huntingdon, Delaware and Adams counties – have progressed to the point that the Gaming Control Board is investigating the owners’ backgrounds.

A number of factors may be deterring tavern owners, including the record-keeping involved.

“It’s a pain,” said Mike Ziants, owner of BigDogz Grill in Johns-town. “I’m not sure it’s going to be worth it.”

Ziants said he would have liked slot machines to be allowed in bars, as is the case in West Virginia. Less effort is required to monitor revenue from the machine-based games.

The scrutiny that comes with running small games also may dampen tavern owners’ enthusiasm. Some worry that bungling the record-keeping on gaming revenue will trigger citations and jeopardize their liquor licenses, said Amy Christie, executive director of the Pennsylvania Tavern Association.

During a series of educational events about the new law, liquor enforcement officials warned tavern owners that violations could affect their liquor licenses, said Stacy Kreideman, a spokeswoman for the state Liquor Control Board.

Those concerns are valid, “in theory,” she said, because the board reviews an establishment’s compliance record when its license is up for renewal. Ultimately, however, it’s up to the board to decide whether record-keeping violations amount to a serious problem.

The time needed to apply for a small games license also is onerous, some say.

“Bar owners work 40, 50, 60 hours a week,” Christie said. “These applications aren’t the type of thing where you just sit down and fill them out.”

Applicants must submit a variety of financial information and details about business associations, she said. Some forms must be notarized and accompanied by a nonrefundable check for $2,000 to cover the state’s cost of investigating an applicant’s background.

In addition, a bar owner must be fingerprinted and pass a background check, even though the bars already hold state-issued liquor licenses.

“If there is something shady, (the state) should already know,” Christie said.

State law allows a bar owner to hold a liquor license with a misdemeanor gaming offense conviction or a felony conviction of any kind, at the discretion of the Liquor Control Board, said Kreidman. But the new law prohibits anyone with convictions of those offenses in the past 15 years from getting a small games license.

The application also requires tavern owners to declare every arrest in their past, whether an incident resulted in a conviction or not.

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