Making the News

Scranton Times Tribune

Originally Published:Sunday, February 3, 2008

Spectrum Gaming Group, a gambling consulting firm, was assigned to help Pennsylvania come up with a plan for licensing for the Department of Revenue in 2004. At that time, the New Jersey-based group suggested that Pennsylvania follow the New Jersey model for its enforcement arm. Pennsylvania asked the group to change its recommendation, and the firm declined on principle.

Fredric E. Gushin, Spectrum managing director, noted that the firm was “not used, but they paid us for all of the work we completed.”

Gambling oversight follows two main models
Old wounds have been reopened with the suspension of Louis A. DeNaples' casino license as debates over the Pennsylvania Gaming Control Board's decision to keep its enforcement arm separate from law enforcement have risen to the surface again.

By ROJA HEYDARPOUR
Scranton Times Tribune

Would Mr. DeNaples have been issued a gaming license in New Jersey, for example, a state with stricter and more open licensing procedures? How about in Nevada?

"I don't think anybody knows the answer to that question," said Nicholas Casiello, the chairman of Fox Rothschild LLP's Gaming Practice Group.

There are two basic models for gambling oversight boards across the country, the Nevada model and the New Jersey one, he said.

Pennsylvania's arrangement resembles Nevada's, in that the group that is charged with investigating applicants, which includes background checks, is not connected with a law enforcement agency. Most states with legalized gambling follow this model. The Bureau of Investigation and Enforcement is in charge of background checks in Pennsylvania.

In New Jersey, by contrast, the Division of Gaming Enforcement is a part of the attorney general's office and the state police.

In the early days of gambling, in Nevada and New Jersey, licensing applications were created specifically to vet people with ties to organized crime, said Mr. Casiello.

By the 1990s, however, the focus of the application process shifted more toward general character issues rather than connections to the mob.

"I think that organized crime learned that they couldn't easily infiltrate the casino industry," he said.

Also, in New Jersey, if there are any doubts that an applicant is suitable for a license, the question is explored in a public meeting. In Pennsylvania, it is done behind closed doors.

In the early 1980s, a New Jersey court decision declared that "to doubt is to deny," said Mr. Casiello, which meant that were there any questions raised in the application process, they would be explored publicly.

In a list of suggestions to the Pennsylvania Gaming Control Board and the General Assembly, the Dauphin County grand jury that indicted Mr. DeNaples on perjury charges related to his application process has suggested that Pennsylvania emulate New Jersey in these respects. Indeed, questions over the handling of background checks for license applicants have been there from the start.

Spectrum Gaming Group, a gambling consulting firm, was assigned to help Pennsylvania come up with a plan for licensing for the Department of Revenue in 2004. At that time, the New Jersey-based group suggested that Pennsylvania follow the New Jersey model for its enforcement arm. Pennsylvania asked the group to change its recommendation, and the firm declined on principle.

Fredric E. Gushin, Spectrum managing director, noted that the firm was "not used, but they paid us for all of the work we completed."

In a testimony to the Senate Committee on Community, Economic and Recreational Development in October, Steve Kniley, the deputy chief of staff in the governor's office, who was the press secretary for the Department of Revenue in 2004, said that there was a problem with the entire document proposed by Spectrum Gaming Group, it was not just about the background checks.

Still, the consulting firm has not changed its position.

"Spectrum Gaming Group stands by its recommendations made to the commonwealth in 2004," said Joseph Weinert, senior vice president of the group.

Contact the writer: [email protected]

 

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