Thursday, March 29, 2007

Citing a proliferation of illegal video gambling machines, members of a key
Senate committee are considering a crackdown on bars, truck stops, clubs and
other retailers caught with the devices. The plan developed by Senate
Republican leaders would be the legislature's first significant step toward
rooting out the tens of thousands of machines that operate under names like
Cherry Master and Pot O' Gold. "They're everywhere, and they're growing in
numbers," said Senate President Pro Tem David Long, R-Fort Wayne, one of the
plan's authors. But the proposal comes as bar owners and some other
lawmakers are pushing to legalize the machines, regulate them and tax their
earnings. Long postponed a vote on the proposal yesterday in the Rules
Committee he chairs, saying members needed more time to learn about the
issue and consider their options. "I wanted to start a discussion and see if
there is something we can do about this," he said. The committee is
considering an amendment to House Bill 1510, a charity gambling regulation
measure. The amendment would provide nearly $2 million for 25 police
officers who would be dedicated to investigating illegal gambling. The
measure also would increase the criminal penalties for people charged a
second time with promoting professional gambling. It also would authorize
the state to revoke lottery contracts, retail merchant permits and state
licenses that allow the sale of tobacco and alcohol held by any company or
organization found with illegal gambling machines. There also would be
administrative and regulatory penalties for illegal gambling, which would
take the issue out of the hands of county prosecutors, who are often
reluctant to take on illegal gambling cases. Currently, the Indiana State
Excise Police raid bars, clubs and restaurants to shut down illegal
machines, which puts the establishments' alcoholic beverage permits in
jeopardy. Last year, excise police cited 435 gambling-related violations and
seized computer chips from about 1,600 illegal video gambling machines. But
excise police Superintendent Alex Huskey told the committee yesterday that
the effort has driven many of the machines into truck stops and other
retailers that don't have alcohol permits. That makes it more difficult for
law enforcement to act without cooperation from a prosecutor. Huskey said
hiring more excise police officers and giving the Alcohol and Tobacco
Commission the authority to take away a retailer's ability to sell
cigarettes would be significant changes. "This is a different approach,"
said Sen. Jim Merritt, R-Indianapolis.

James Maida, president of Gaming Laboratories International, told the
committee that illegal gambling machines can be manipulated to make maximum
profits for owners and pay out little in prizes to players.

"These games are methodically taking players' money in a way that isn't
fair," said Maida, whose company tests legal slot machines and other gaming
devices for Indiana and other states, and in nations around the world.

Maida's staff accompanied the excise police on visits to several bars and
clubs to teach the officers how to recognize an illegal machine and disarm
it. He said the staff found that most of the machines pay out 50 percent to
70 percent of the money that is gambled in winnings to players. That
contrasts with legal slot machines at casinos, which are required by law to
pay out at least 80 percent of their take and typically pay more than 90
percent.

Maida told the committee that Indiana's struggle to deal with the machines
is not unique and that dozens of states are considering similar questions.
Some opt to crack down on the illegal machines to eliminate them, he said,
while others legalize and regulate video gambling.

For years, Indiana lawmakers have been debating the legalization issue. Last
week, Don Marquardt, president of the Indiana Licensed Beverage Association,
urged a Senate committee considering a bill that would put slot machines at
racetracks to remember that bar owners need help as well.

"Please consider an amendment to address our problems," he told the
committee.

Sen. Bob Meeks, R-LaGrange, said then that he appreciated the plight of
local bar owners and fraternal clubs and told the Tax and Fiscal Policy
Committee that lawmakers need to make up their minds about the machines.

"We've got to make them legal or make them illegal," he said.