Let the games begin

By on February 6, 2014
The Hide-Away is one of the three establishments in Lititz that has expressed interest in the state's new gaming license.  Photo by Patrick Burns

Some local tavern owners and private club managers have reservations about a new law that brings small games of chance to for-profit taverns across the state.

But no fewer than three Lititz-area taverns ­ The White Swan, Hide-Away and Scooters Restaurant & Bar­ have expressed interest in obtaining the new licenses, which became available to apply for on Jan. 27.

• The resistance comes from the high cost to tavern owners since Gov. Corbett signed into law the amendments to the 1988 Small Games of Chance Act in November.

It requires tavern owners to pay $4,000 in permit, background check, and application fees to start. There is also an annual $1,000 license renewal fee.

While the reception has been a bit cool from some tavern owners, Amy Christie ­executive director of the Pennsylvania Tavern Association ­ said things will improve “quickly.”

“As an association we are so happy to get over the hurdle and mindset that (taverns) cannot have gambling,” Christie said Tuesday. “But the door is open and now we can improve the regulatory process that may be a deterrent.”

• Representatives from The White Swan, Hide-Away and Scooters were among the 1,700 people who attended one of seven seminars ­ set up in January by the PLCB ­to learn about tavern gaming and the application process.

Ray Sylte, canteen manager of American Legion Garden Spot Post 56 in Lititz; and Ron Wilke from Reamstown Athletic Association, also attended.

“There’s a lot of interest but will the tavern owners pull the trigger and spend all that money up front to get gambling?” Wilke asked. “Way too many hoops to go through I think.”

The private club managers, which already offer small games of chance, believe the tavern’s games of chance pose no threat to their gambling revenues.

Sylte said he likes that the new law allows private clubs such as Legion Post 56 to increase its gambling proceeds.

It also raises the maximum weekly payout by $5,000 to $35,000 and reduce from 70 percent to 60 how much they must give to charity.

“It’s a good start because we can now use our funds for whatever we need at the club,” Sylte said.

Previously, clubs could not use funds for wages and other building expenses.

“That was fine in the 40s and 50s when these type of clubs started out ,” Sylte said. “Back then a lot of buildings were donated and the staff was volunteer.”

• The license will permit tavern owners, who survive the required background checks, to hold daily fishbowl-type drawings for $1 per ticket, and sell pull-tab cards and run monthly raffles.

One local tavern owner, who went to a PLCB gambling seminar, said the costs are too high.

“I’m not going to put up that much money,” said the business owner who asked not to be identified. “The worst part is the initial $2,000 application fee is non-refundable.”

• The Corbett administration projects tavern gambling taxes revenues to grow quickly ­ from about $5 million in the 2013-14 budget to almost $180 million by the end of the decade ­ since the state takes 60 percent of the profits, according to numbers released from the governor’s proposed budget Tuesday.

Tavern owners get 35 percent while 5 percent will got to home municipalities such as Lititz Borough and Warwick Township, according to Stacy Kriedeman of Pennsylvania Liquor Control Board.

• Municipal managers contacted for this story said they would wait to see how the new law plays out before commenting on how it may affect local budgets.

“I do not think that I am qualified to answer your questions on the impacts of allowing small games of chance in taverns,” said one manager.

The legislation has had mixed support locally where state Sen. Lloyd Smucker, voted against it and Sen. Mike Brubaker voted to approve.

State Rep. Mindy Fee said she voted against it because the overwhelming majority of people in her district, are not in favor of it.

Fee represents the 37th District, which is comprised of the townships of Clay, East Cocalico, West Cocalico, Elizabeth, Mount Joy, Penn and Rapho and the boroughs of Denver, Adamstown and Manheim.

“Even though this, to some extent, brings some additional revenue to help with what looks to be a substantial revenue deficit leading up to state budget negotiations, the societal effect of expanded gambling is of greater consequence to the people I represent,” Fee said Tuesday.

• Those eligible for a license include owners of a restaurant or hotel liquor license, privately-owned public golf course liquor license or a brewery pub license.

But Christie, whose association represents about 4,500 taverns and bars statewide, noted that it’s aimed mostly at small bars. Chain restaurants would be excluded from getting a license since federal laws prohibit gambling there.

“This is geared more toward mom-and-pop bars,” she said. “It ultimately will help small businesses, the state, and charities, all of which need money.”

• While the PLCB will process the applications and ultimately approve or deny them, other state agencies have a role in tavern gaming as well, Kriedeman said.

“The Gaming Control Board will conduct a thorough background check on applicants and provide that information to the PLCB,” she said.

The Department of Revenue will collect the applicable taxes and administer filing and payment obligations related to taverns, as well as the annual reporting requirements of the law, according to Kriedeman.

The State Police Bureau of Liquor Control Enforcement will enforce the licensing and gaming requirements of the new law while maintaining its current responsibilities enforcing the liquor code.

• Sylte hopes the legislation eventually evolves as the state’s profits increase.

“I favor where military and private clubs pay a tax on a percentage of profits only after the first $40,000 in gambling revenues are collected,” he said. “The clubs could really use the money.”

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