In reversal, state House Speaker Turzai open to expansion of gambling
HARRISBURG — A Republican-aligned lobbying and campaign firm with deep ties to House GOP leadership is lobbying for the largest expansion of gambling in Pennsylvania since the General Assembly legalized slots in 2004.
House Speaker Mike Turzai, R-Marshall, an opponent of the 2004 law and who also voted against legalizing table games in 2009, said he might support an online wagering bill that could include legalizing video game terminals in bars, restaurants and fire halls.
The legislation would allow an estimated 21,000 gambling machines in public venues, said Rep. Mark Mustio, R-Moon.
House Majority Leader Dave Reed, R-Indiana, said late Friday that there was support among Republican members to include video terminals with an iGaming bill. It could be voted on this week, Mustio said.
Turzai’s former chief of staff, Krystjan Callahan, is pushing for the video game terminals in his new role as a lobbyist at Maverick Strategies here.
“I’m open to supporting gaming revenue as an alternative to raising taxes provided it’s done in a responsible manner,” Turzai said. His vote depends on what’s in the final bill, he said.
Maverick Strategies is owned by Ray Zaborney, who also runs the political consulting shop Red Maverick Media, which has been paid $645,000 this year by House and Senate Republican campaigns. Jennifer Zaborney, his wife, owns Maverick Financial, which raises money for GOP candidates.
Ray Zaborney has said the three companies don’t overlap, except for his role as head of Maverick Strategies and Red Maverick Media.
“Krystjan was a well-respected staffer in the Capitol with a lot of relationships. As far as him lobbying on issues, he followed the law on a one-year ban from lobbying the House,” Zaborney said.
Close political ties like Callahan and the Maverick firm have are common in the lobbying world. But they contribute to the perception among many voters that the system is “rigged,” said Wes Leckrone, a political science professor at Widener University in Chester, Pa.
“If it looks as though someone is getting favorable treatment, the public will figure they actually are getting it,” Leckrone said.
Mustio, chairman of the House Republican Campaign Committee, voted for the 2004 bill legalizing casinos and strongly supports the video terminals bill. He and another key supporter, lobbyist and former Democratic Rep. John Milliron, said they believe Turzai is backing the legislation. He voted for an amendment in December that would have legalized the terminals, but the bill stalled.
Turzai isn’t the only opponent of the 2004 slots law to consider supporting expanded gambling. Reed also voted against the slots law, but said last week, “Given the choice between gaming or an income tax increase, I prefer gaming.”
In an interview, Turzai was asked five times if Callahan’s work on the legislation influenced his position on gambling. Five times, he refused to answer. Callahan declined to comment.
“The revolving door (between government and lobbying) is a serious problem at the state level and the federal level as well,” said Craig Holman, government affairs lobbyist for Public Citizen in Washington. “When a lobbying firm gets access to someone well connected in government, they not only get phone calls returned, they know how they think. It gives them the inside track on passing legislation or killing it.”
Pennsylvania is missing out on up to $400 million in tax and fee revenue, Mustio said. Legalized video gaming terminals, or VGTs, “diversifies (the state’s) brick-and-mortar casino portfolio,” he said.
Casinos like that portfolio just fine and have hired their own well-connected lobbyists to oppose it.
“The casino lobbyists served in senior roles in the House, Senate and administration and continue to advise elected officials. I’d think they have many more advantages than the few firms lobbying on behalf of VGTs, including ours,” Zaborney said.
Since 2004, taxes on gambling generated $6 billion for property and wage tax reduction, $2 billion to support the horse racing industry, $700 million for local governments, and about $1 billion “for construction of things like Consol Energy Center,” said Steven Crawford, a lobbyist for S.R. Wojdak & Associates and former chief of staff and Secretary of Legislative Affairs for Gov. Ed Rendell, who signed the slots and table games laws.
“The worry is that the expansion to VGTs will at this point dramatically compromise those funds because (casino) play will go down,” said Crawford, who represents Rivers Casino on the North Shore, Sugarhouse Casino in Philadelphia, Mt. Airy Casino Resort in the Poconos and the Philadelphia Park Horsemen, a racino industry group.
“Every dollar that goes into a VGT machine is a dollar that will not go into a slot machine and the property tax reduction fund and all the other programs I mentioned,” including the lottery, Crawford said.
But Mustio said the casino industry “continues to cannibalize themselves by building casinos across our borders in our neighboring states.”
“It is important for Pennsylvania taxpayers and our state budget that we diversify. The casinos freely admit that the tavern/restaurant customer is not the same customer as a casino customer,” Mustio said.
He envisions video gaming revenue helping to pay down the state’s nearly $70 billion pension debt or helping balance the state budget.
The casino industry’s opposition sets high hurdles in the House for VGTs and Internet gaming, said Sen. John Wozniak, D-Johnstown.
A House vote on Internet gaming and VGTs failed in May. Even if it passes this time, there’s a skeptical climate for the bill in the Senate, Wozniak said.
“I’m not going to say never,” he said. “I’m going to say the Senate is more reluctant than the House is.”
Editor’s Note: This story is another in an occasional series examining lobbying in Pennsylvania.
Brad Bumsted and Mike Wereschagin are Tribune-Review staff writers. Reach Bumsted at 717-787-1405 or [email protected].