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Casino lobby was behind ‘skill games’ ban; council members say they didn’t know origin of proposal

By Dan Miller

danmiller@pressandjournal.com

717-944-4628
Posted 1/15/20

Middletown Borough Council’s consideration of an ordinance to ban so-called “skill games” was prompted by a lobbying effort on behalf of a Philadelphia-area casino, although borough …

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Casino lobby was behind ‘skill games’ ban; council members say they didn’t know origin of proposal

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Middletown Borough Council’s consideration of an ordinance to ban so-called “skill games” was prompted by a lobbying effort on behalf of a Philadelphia-area casino, although borough officials say they didn’t know that at the time.

The statewide effort at municipal bans on such games was undertaken by Eckert Seamans, the law firm under contract to Middletown borough as solicitor to provide legal advice to the borough and to council.

Following council Jan. 6 voting 6-0 to table action on the proposed ordinance, after hearing concerns from nonprofit groups and businesses in Middletown saying they are already benefitting from revenue received from the skill games, borough Manager Ken Klinepeter told the Press & Journal that council considering the proposal followed the borough receiving a letter in December from a solicitor representing Dauphin County.

But the letter was sent on behalf of Parx Casino in Bensalem, although that information was not disclosed in the letter dated Dec. 13, which the borough received signed by Mark S. Stewart, an attorney with Eckert Seamans.

The letter from Stewart contained a draft ordinance for council to consider, which would make skill games illegal in the borough by declaring them a nuisance.

Skill games are controversial not just in Middletown but statewide. Advocates call them “skill games” because they say some amount of skill is required on the part of the player, in order to win money when they play.

Opponents — including Parx Casino, Hollywood Casino and other casinos throughout Pennsylvania — say the games require no skill but are illegal, unregulated slot machines that are robbing Pennsylvania residents of revenue that goes to support “local share” gaming grants, the Pennsylvania Lottery, property tax relief, and other initiatives now supported by gaming revenue from the licensed casinos.

Pennsylvania State Police in a December raid pulled skill games from five bars in Dauphin and Cumberland counties, including Champions Sports Bar and the Stadium Club in Highspire, according to PennLive.

But whether skill games are in fact illegal is unsettled. Also in December, Pennsylvania Commonwealth Court according to PennLive issued a stay barring State Police from seizing any more skill games marketed by Pace-O-Matic and POM of Pennsylvania. That followed a ruling by a Beaver County judge who determined that the Pace-O-Matic games are legal, because the player’s opportunity to win depended more on skill then on chance.

Stewart in a phone interview with the Press & Journal said he sent the letter and proposed ordinance not as a solicitor with Eckert Seamans representing Middletown, but on behalf of the firm’s representation of Parx Casino.

Casino connection

Stewart acknowledged the letter — a copy of which Klinepeter provided the Press & Journal — did not disclose that it represents the interests of Parx Casino, although Stewart said he spoke with “a few” borough councilors about the skill games issue before the Jan. 6 meeting.

Klinepeter in a Jan. 8 email to the Press & Journal said he was “not aware that the letter had any connection to Parx Casino” until he learned this from the Press & Journal, after Stewart disclosed this to the Press & Journal in the phone interview.

Council President Angela Lloyd told the Press & Journal  Jan. 8 she also did not know the letter was on behalf of the interests of Parx Casino, until the Press & Journal provided that information to Klinepeter.

Lloyd said council did not direct its solicitor to draw up the proposed ordinance, as the Press & Journal reported in its Jan. 8 edition. Instead, she said council agreed to put the item on its Jan. 6 agenda to consider voting to advertise the proposed ordinance, because “the solicitor was recommending we consider advertising it.”

The proposed ordinance had already been drawn up, as a draft ordinance that Stewart included in his letter to the borough.

By solicitor, Lloyd said she was referring to Stewart.

Stewart seldom attends Middletown council meetings. Eckert Seamans is usually represented as solicitor to provide legal advice at council meetings by two of the firm’s other attorneys, James Diamond or LaToya Bellamy.

While Klinepeter was incorrect saying the Dec. 13 letter from Eckert Seamans was representing Dauphin County, Stewart acknowledged the firm is “special counsel” to Dauphin County on gaming-related issues involving the Dauphin County Gaming Advisory Board.

The county board each year recommends awarding grants to municipalities throughout Dauphin County — including Middletown — that are funded by proceeds derived from gaming revenue generated by Hollywood Casino at Penn National. County commissioners award the grants.

Middletown Volunteer Fire Department in 2019 received a $125,000 gaming grant from the county to help buy a new pumper truck.

As Stewart pointed out, the borough has received other gaming grants in the past, including $250,000 that helped pay for the streetscape improvements at and surrounding Union and Emaus streets.

Londonderry and Lower Swatara

Stewart said his letter on behalf of Parx Casino did not target Middletown, but was among 600-plus identical letters that were sent to municipalities all over Pennsylvania.

The letters went out to every municipality in every Pennsylvania county that hosts a casino, Stewart said. Middletown and every other municipality in Dauphin County received the same letter, because the county is home to Hollywood Casino in East Hanover Township.

That includes Londonderry Township, also represented by Eckert Seamans as solicitor. Stewart typically attends board of supervisors meetings as the representative of Eckert Seamans.

Township Manager Steve Letavic told the Press & Journal Londonderry Township received the same letter from Eckert Seamans concerning skill games as did Middletown.

“We plan to review our existing ordinances and make any recommendation for proposed changes to the board of supervisors later this month or in the beginning of next month,” Letavic told the Press & Journal in an email. Letavic did not know of any skill games in the township.

Lower Swatara Township also received the letter, said township Manager Betsy McBride, although Eckert Seamans is not solicitor to the board of commissioners.

McBride said she had not seen any skill games in Lower Swatara. She said she believes the letter and draft ordinance will be discussed at either tonight’s board of commissioners meeting, or the first meeting in February.

Stewart emphasized in his interview with the Press & Journal that “I’m not advocating this issue to Middletown Borough Council.”

“This was a statewide effort sent to municipalities across the state that host casinos. It was not personalized to Middletown in any way. It is not where I’ve been directly communicating or advocating the issue with them,” Stewart said.

“The objective is to put an issue that is a matter of potential public interest to all these municipalities, in terms of what we believe to be illegal slot machines proliferating in the state.”

Stewart also said that neither he nor Eckert Seamans billed Middletown for any work related to the letter or the draft ordinance, given the firm’s relationship to the borough as solicitor.

This was confirmed by Klinepeter, who told the Press & Journal Stewart had told him “there was no charge for the letter we received.”

Stewart told the Press & Journal he did not know of any municipalities in Dauphin County that have adopted the proposed ordinance that he sent them on behalf of Parx Casino.

Strong opposition

During the Jan. 6 meeting, Middletown council heard from several people representing nonprofit organizations who said revenue from the skill games has enabled the groups themselves not only to survive, but to significantly increase money they have available to donate to causes throughout the community, including police and fire departments, schools, veterans, youth groups, and others.

The Rescue Firemens Home Association has increased by 70 percent money available to support Middletown Volunteer Fire Department, thanks to skill games revenue, Bill Reigle told council during the meeting.

Middletown Moose “might not be in business six months from now” without revenue from the skill games, said Ed Gelata. American Legion Post 594 has increased by 60 percent money it has to donate to veterans groups and other causes, according to Commander William Douglass.

Stewart told the Press & Journal it was not his intent to “counter” these arguments that were made at the meeting.

“I understand the issues and concerns raised by those folks,” Stewart said. Nevertheless, “I don’t think that you are doing something good with proceeds from illegal activity erases the fact that the proceeds are still coming from an illegal activity.”

Stewart said these same groups were given increased ability under Act 42 of 2017 to profit from the proceeds of licensed gambling.

He referred to the act authorizing an expansion of gambling including the placement of video gaming terminals at licensed truck stop locations and the operation of Keno and Xpress Sports games by the lottery in retail establishments, including bars and taverns.

“A lot of the clubs have not taken advantage because they would rather have a slot machine even if they can have” the licensed products, Stewart said. “They are being told they are legal by people who distribute them. We have a different point of view, and the State Police don’t agree” with the distributors either.

Parx, Hollywood and the 11 other licensed casinos in Pennsylvania support efforts by the State Police requesting the General Assembly enact legislation to declare the skill games unlawful, according to a May 2019 letter from the casinos to state legislators provided to the Press & Journal by Stewart.

In Middletown, it is unclear if or when council will take up the skill games proposal.

Lloyd told the Press & Journal that she has “no intention” of putting the item back on the agenda, unless a council member wants to see that happen.

“If any council member feels they want to reopen it for discussion and want to have more information and discuss it, we can do it,” she said. “For me personally, it’s a done deal.”

Mayor James H. Curry III also pledged to veto an ordinance that would ban skill games in Middletown, if council votes to enact one.