Court has exclusive jurisdiction over gambling issues
Pennsylvania’s gambling industry has special access and unique privileges before the state Supreme Court, the ultimate arbiter of equal justice under the law.
Direct access to the state’s highest court would be a major benefit to any Pennsylvania industry. The time and money saved by not having to work a case through the system of appeals is incalculable.
Only one industry in the nation’s sixth largest state has such access. It’s not steel or coal or agriculture or tourism or energy or manufacturing.
It’s the gambling industry, which the General Assembly approved in 2004, and officially dubbed the “gaming” industry.
The successful effort to legalize gambling in the commonwealth was a long time coming, but it finally made it past strong resistance by selling itself as a “slot machine only” operation aimed at bailing out the floundering state horse racing industry and lowering local property taxes.
The initial wave of slot machines went to race tracks, thus the term “racino” and not casino. A handful of stand-alone slots parlors also went up. Today, the state has six racinos and three stand alone casinos.
Less than six years passed before Gov. Ed Rendell signed table games legislation in January allowing games such as roulette, black jack, poker and craps at gambling facilities.
Speed always seems to be of the essence in the industry and, thus, the crafters of the initial gambling legislation made certain the nascent industry would not have to stand in court room lines and file lengthy, costly appeals.
Pennsylvania law currently calls for the state Supreme Court to have “exclusive appellate jurisdiction to consider appeals of any final order, determination or decision of the (state Gaming) Board involving the approval, issuance, denial or conditioning of a slot machine license or the award, denial or conditioning of a table game operation certificate.”
The high court, under law, also automatically affirms virtually all decisions of the Gaming Control Board (GCB), “…unless it shall find the board committed an error of law… (Or the board was) “arbitrary” or “capricious.”
The high court also has sole say in gambling operations regarding local zoning, size, layout, construction or occupancy of gambling facilities, over and above local governmental entities.
State Rep. Curt Schroeder (R-Chester) thinks it is time the marriage of convenience between the gambling business and court comes to an end and has introduced House Bill 2388 to repeal the court’s unilateral powers in the still controversial industry. The bill has bipartisan support from 25 other House cosponsors, but has languished in the Gaming Oversight Committee since April 7.
Since 2004, the high court has used its “original jurisdiction” status in 32 cases and in nearly every instance has come down on the side of the gambling industry or the GCB.
And while there has never been any claim of wrongdoing, the linkages between the court and the industry are intriguing.
Peter DePaul, a Philadelphia businessman and a past (non-lawyer) member of the Pennsylvania Court of Judicial Discipline, is an investor in the Foxwoods Casino in Philadelphia. He brought a suit before the high court in 2008 that led to the Supreme Court striking down a law that had prohibited state political contributions from people involved in the gaming industry. The Foxwoods Casino has yet to break ground, despite a 2006 license. Its license is in jeopardy according to the GCB.
Former Supreme Court Justice William H. Lamb served a one year (2003) term to fill a vacancy on the high court. He is a former Chester County District Attorney and Special Prosecutor. He has been appointed to several posts by the state Supreme Court. He is an investor in the SugarHouse casino slated for Philadelphia.
Former Chief Justice Stephen Zappala, Sr. is chairman of the Pennsylvania Casino Association (PCA) based in Pittsburgh. His daughter, Michelle Zappala Peck originally opened the PCA and is an employee. Chief Justice Zappala left the bench at the end of 2002. Until early this year, Justice Zappala earned $275,000 annually from the PCA. He voluntarily reduced his salary by half when new Executive Director Ken Smukler, a Philadelphia political operative, was hired for the PCA.
Justice Zappala was recruited for the PCA by influential Philadelphia attorney Richard A. Sprague, who founded the association that represents three state gambling enterprises. Mr. Sprague is President Emeritus of the Pennsylvania Court of Judicial Discipline and a former member of the Judicial Conduct Board. He is also one of the owners of the SugarHouse casino in Philadelphia, scheduled for a September opening.
The PCA gave Mr. DePaul $100,000 after his successful effort in having the political giving restriction struck down by the court. The PCA denies it fostered Mr. DePaul’s suit, but admits it agreed with his bringing the case. Mr. DePaul was fined $100,000 prior to the suit, for unwittingly making political contributions while a Foxwoods investor. He is still trying to retrieve the fine from the state.
Another employee of the PCA is Walter “Corky” Alberts of Pittsburgh. He was formerly an aide to late Chief Justice Ralph Cappy, who left the bench in 2008. He is paid about $50,000 annually to back up Ms. Peck, who earns $65,000 a year.
The future of the Foxwoods license is slated to come before the GCB on June 10. State Sen. John Wozniak (D-Cambria) is pushing for the license to be revoked and awarded to a Johnstown group in his home district.
Foxwoods claims it has five new potential investors for the financially troubled operation planned for the Delaware Riverfront in Philadelphia. It has declined to name the five.
Whether the matter of the Foxwoods license and its future will eventually wind up before the Supreme Court remains to be seen.
This story has been updated with corrections.
