This article is shared with LebTown by content partner Spotlight PA.
By Angela Couloumbis of Spotlight PA
HARRISBURG — In the spring of 2019, state Sen. Tommy Tomlinson hosted a news conference in the state Capitol to announce legislation banning thousands of unregulated gaming machines that have popped up in gas stations, convenience stores, bars, social clubs, and other establishments across Pennsylvania.
The slot-like machines, called skill games, are not only largely untaxed, said the Bucks County Republican, but siphon millions from regulated games, including those belonging to the State Lottery.
“These machines are essentially picking the pockets of our senior citizens,” Tomlinson said at the time, referencing lottery revenue that underwrites programs for older Pennsylvanians.
What the public had no way of knowing is that the bill Tomlinson introduced that day was ghostwritten by the gaming industry. At the senator’s request, lobbyists and lawyers for Pennsylvania’s top-earning casino had drafted the bill, and the final text matched that version almost word-for-word.
“Good Morning Gents,” Ryan Skoczylas, Tomlison’s chief of staff, wrote in an April email with the subject line “Language” to lobbyists for Parx Casino, which is located in Tomlinson’s district. “Hope everyone had a great Easter Weekend. Tommy would like to introduce this bill sometime next week. Where are we at with the draft language?”
“Attached is the proposed draft bill,” lawyer and lobbyist Mark Stewart replied within hours, adding that Parx executives were “still in the process of refining it and considering a couple additional concepts.”
The emails — exposed as part of an ongoing lawsuit — offer a rare glimpse of the reach that lobbyists enjoy in the state legislature and the close relationships that sometimes develop between lawmakers and special interests. They also provide a behind-the-scenes look at the bare-knuckle fight over expanding gambling in Pennsylvania, which has pitted the state’s casinos, among others, against companies that produce skill games.
At the center of it all: hundreds of millions of dollars in revenue and profit.
In Tomlinson’s case, Parx’s lobbyists also participated in strategic planning sessions with him, and drafted talking points and other key documents for his office, emails show.
In a statement, Tomlinson said that consulting with outside experts is “an integral part of the legislative process,” and that his office spoke with multiple government agencies and industries impacted by unregulated skill games.
As for his 2019 bill, he said, “Although we may have received insight on language, I had the final say on the legislation that was introduced.”
A Parx spokesperson, Pete Shelly, echoed that sentiment, and added that as one of the largest employer in Tomlinson’s district, “we absolutely reached out to Sen. Tomlinson … We are in his district and we know the gaming world as well as anybody.”
Stewart did not respond to multiple requests for comment.
Emails to and from the legislature are normally shielded from public scrutiny, as lawmakers exempted themselves from having to reveal electronic communications when they revamped the state’s public records law in the 2000s.
Emails between Tomlinson’s office and Parx Casino’s lobbyists were unearthed as part of a little-publicized federal lawsuit by Georgia-based Pace-O-Matic, which develops skill games, against Stewart and his law firm, Eckert Seamans Cherin & Mellott.
The lawsuit revolves around accusations that Stewart and Eckert engaged in the legal equivalent of double-dipping by representing Pace-O-Matic while also acting as a lawyer for a competing interest: Parx Casino. Eckert, in court papers, initially denied the allegations, but earlier this year stipulated that the firm had not obtained “informed consent” from Pace-O-Matic when it decided to represent Parx.
In Pennsylvania, 1,150 registered lobbyists representing a wide array of businesses and industries court lawmakers in the hopes of influencing public policy. The very nature of their job requires them to research and analyze legislation, monitor bills, regularly attend legislative and regulatory hearings, and remain in frequent contact with people in positions of power.
The lobbying industry describes itself as a “legitimate and necessary part of our democratic political process,” according to the National Institute for Lobbying & Ethics, which represents lobbyists and government affairs professionals and promotes professionalism and ethical standards in the industry.
But good-government experts say writing bill language — which has become increasingly common in statehouses nationwide — harms public confidence in government.
“This can create a potential tension,” said Pete Quist, deputy research director at OpenSecrets, a nonprofit research and government transparency group that tracks money in politics and its impact on elections and policy.
“Elected officials should be representing what they view as the public interest, whereas the lobbyist is representing the interest of the client, and the public must rely on the legislator to recognize when that difference is or is not contradictory.”
‘The game plan’
In Pennsylvania, lobbying around gambling has been fierce since the state legalized slot machines in 2004. Since then, lawmakers have vastly expanded the types of games people can pay to play — including table games, online gaming, fantasy sports, and sports betting — and where they can play them.
One remaining sore spot? Skill games.
Critics argue skill games are not authorized by the state’s gambling law. Because they are not regulated by the Pennsylvania Gaming Control Board, skill games are not taxed like other gambling devices. The state’s 16 casinos and mini-casinos, by comparison, pay a steep, 54% tax on revenues from slot machines.
Manufacturers like Pace-O-Matic counter that skill games aren’t casino gambling, as they rely on a level of cognitive and physical player ability, rather than on pure chance, to get a successful outcome.
They also note their machines financially benefit the establishments that house them, including many small, family-run businesses that get a cut of the revenue. Pace-O-Matic, for instance, said they provide store owners with a 40% cut of the revenue from their machines. State officials estimate there are over 50,000 machines across the state.
Casino owners want legislation banning skill games, and argue that legalization would further cannibalize the state’s already over-saturated gambling landscape. Skill games operators and distributors would prefer laws to tax and regulate their industry — although they have benefited financially from legislative stasis over how to best confront the issue.
Both sides have hired top lobbyists and lawyers, and have landed allies in the legislature who have introduced competing bills in recent years.
Tomlinson, a veteran lawmaker who played a pivotal role in ushering in the 2004 gambling law, is one of the most vocal advocates for banning skill games. He’s found a sympathetic ear in the State Police — which has seized some of the machines, leading to prolonged litigation — and the State Lottery, which contends the games eat into its revenue.
Though casinos, like most businesses, took a direct financial hit when they shut down during the pandemic, they have made an eye-popping comeback. Last year, in fact, was a record year for gambling revenue, with the industry pulling in just over $4.7 billion.
Even within that windfall, Parx distinguished itself as the top-earning casino in Pennsylvania. It topped the charts last year in revenue from slot machines ($409 million) and table games ($207 million), and was among the top five for revenue from iGaming and sports wagering, according to the state Gaming Control Board.
Though casinos were banned from making campaign donations for the first 15 years of legalized gambling in Pennsylvania, a federal court ruling in late 2018 removed that barrier. Since that time, Parx’s chairman, Robert W. Green, has contributed $323,500 from his political action committee, the 2999 Group, to various candidates across the state, according to campaign finance reports.
Tomlinson, records show, has received $10,000 from that PAC since 2020, when it was first launched.
Skill games operators and manufacturers also contributed big money during that same time frame to state lawmakers and other elected officials — just under $680,000. Last summer, however, several high-ranking senators, including the top Democrat and Republican in the chamber, returned donations they had received from the skill game industry, citing the fact that it was still unregulated.
Parx’s lobbyists and executives appeared to take some credit for the reversal. “When the parade changes direction, run around to the front of it,” Parx’s chief operating officer wrote in a June 2021 email.
Dick Gmerek, a top Harrisburg lobbyist representing Parx, responded, “We all pushed the parade in That direction..…with Rommy’s help obviously.” Gmerek did not respond to requests for comment about his emails, including clarifying whether “Rommy” referred to Tomlinson.
In 2019, when Tomlinson introduced his bill, the new, two-year legislative session had just started, and the fight over skill games was being waged in both the Capitol and the courts. In early April of that year, emails show, lobbyists for Parx met with Tomlinson and Skoczylas, his chief of staff, to strategize about Tomlinson’s bill.
“The game plan Tommy laid out is as follows,” Gmerek wrote in an April 9 email to Stewart, Sean Schafer, and two Parx executives, including Green. (Schafer is another Parx lobbyist and a former Tomlinson aide.)
The plan, according to Gmerek’s email, included Tomlinson calling a meeting of casino lobbyists to divvy up calls to senators to take their pulse on the issue and report back to Tomlinson. That meeting, subsequent emails show, was scheduled for mid-April in Tomlinson’s office.
A few days after that meeting, Skoczylas emailed Gmerek, Schafer, and Stewart seeking draft language for a bill banning skill games. Stewart followed up within hours with a proposal, and again on April 30 with a revised version.
On May 15, Skoczylas sent the lobbyists the most up-to-date version of the bill, which included a few edits from Democratic Gov. Tom Wolf’s office: “Got this back from the Govs office. Let us know what you think.”
Another staffer from Tomlinson’s office a week later emailed the lobbyists with the proposal’s final language, asking for input.
The bill that Tomlinson introduced at the end of the month contained near-identical language to the draft that Parx’s lobbyists had drawn up.
‘Talking points’
The next year, when the pandemic began, legislative activity focused on dealing with its fallout.
But by that summer, as budget negotiations unfolded, top GOP leaders in the state Senate, including then-Majority Leader Jake Corman of Centre County, began pushing behind the scenes for a gambling expansion bill that would legalize, regulate, and tax skill games.
Parx’s lobbyists quickly went to work, emails show.
On June 22, at about half past midnight, Stewart emailed Gmerek telling him “Have about 7 or 8 amendments ready to go. Will get to you tomorrow early in case.”
What would be more helpful, Gmerek replied at 7:40 a.m., are documents and charts detailing the stark differences between casino and non-casino games, including skill games.
Minutes later, at 7:46 a.m., Gmerek emailed one of his associates and copied Stewart, with the subject line: “JUNE 2020 TOMLINSON SKILL GAME TALKING POINTS.” Attached was a list with headlines such as “You’ve Got To Be Kidding Me,” “A Pig In A Poke,” and “Is This The Pennsylvania You Want To Create?”
The emails do not show whether the talking points made their way to Tomlinson, and whether he used them. That morning, however, Republican senators met behind closed doors to discuss the plan, with Tomlinson telling PennLive: “We shouldn’t be pushing this thing at all as long as our casinos aren’t up and running 100%. We are thumbing our nose at their economic distress.”
The effort fizzled. But that fall, with just weeks left before the end of the 2019-20 legislative session, a key state Senate committee chaired by then-Sen. Tom Killion (R., Delaware) held a hearing on a bill championed by Corman that would legalize and regulate skill games.
The day before the Oct. 6 hearing, Schafer emailed Gmerek, Stewart, and several Parx executives, including Green.
“I think I will personally watch the hearing from Tommy’s office,” Schafer wrote at 12:23 p.m. “It is safer and makes sense. We could probably accommodate safely a good 8 to 10 people in Tommy’s office if anyone else wants to join I’ll arrange it.”
He added: “Additionally, Tommy still wants to do dinner to go over questions. Any questions give me a call.”
At the hearing, Tomlinson was clear: “To get any compromise is going to be very difficult.”
The 2019-20 session ended without any changes to the law or resolution over how to best handle skill games.
‘Tommy will adapt it to his needs’
The debate over skill games has spilled into the current legislative session, which ends in November, although a deal again seems elusive.
Gambling expansion has for years been an area legislators explore when they need new dollars. But at the moment, the state is flush with cash, thanks to unspent federal COVID-19 relief dollars.
Still, the issue has been on the legislature’s radar. In June of last year, state Sen. John Yudichak (I., Luzerne) convened a hearing on what was billed as the “sustainability of gaming” in the state.
In the days leading up to the hearing, Parx’s lobbyists prepared a one-page document with talking points and questions for Tomlinson.
“I could tweak this a little but I think it’s good as it is. Tommy will adapt it to his needs anyway,” Stewart wrote in a June 11, 2021 email to Gmerek and an Eckert Seamans colleague.
In this session, Tomlinson — who plans to retire at the end of 2022 — has again introduced a bill banning skill games. A competing bill has been championed by state Sen. Gene Yaw (R., Lycoming) to tax and regulate them. Among Yaw’s arguments for doing so: Skill games provide much-needed revenue to bars, small businesses, and service organizations, including chapters of the Veterans of Foreign Wars and the American Legion.
Casino lobbyists scoffed at the argument.
“I just puked in my mouth,” Stewart wrote to Gmerek on April 14 of last year, after being forwarded an op-ed by an owner of a small-sized Pennsylvania supermarket that has skill games machines. The owner said the games had helped the store’s revenue and enabled him to provide health coverage to employees.
Gmerek’s response: “He could also sell cocaine and have the same result.”
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