Lehigh Valley private clubs are counting on Rendell to legalize

Lehigh Valley private clubs are counting on Rendell to legalize video poker

Pennsylvania Gov. Rendell hopes the machines will generate tax income By Matt Assad

The legalization of poker machines could save struggling clubs like the Fairview Social Club in Allentown. (DENISE SANCHEZ, Allentown Morning Call / February 5, 2009)

One of Pennsylvania's worst-kept secrets has been that for decades many of its 3,000 licensed social clubs used money from illegal poker machines to provide members with $1 drafts and cheap food.

But many of those neighborhood clubs have closed or have struggled since the state licensed its own slot machine casinos two years ago and began raiding clubs that have illegal machines.

Now, Gov. Ed Rendell, who initiated the gaming law that for some signaled the end of the social club, is proposing a new law that may give those clubs new life.

Last week, Rendell proposed letting any place with a state liquor license, including private clubs, to have up to five poker machines. He has said a 50 percent tax on proceeds from those machines would generate $550 million a year to be used as tuition aid to low-income students at state colleges and community colleges.

Opposition is mounting, but Rendell can count on support from more than 1 million private club members statewide.

''Right now, clubs are either keeping their machines and praying they don't get raided, or getting rid of their machines and struggling to survive,'' said Jim Schantz, vice president the Bethlehem Clubman's Association and a legislative aide for state Sen. Lisa Boscola, D- Northampton. ''This proposal keeps everyone afloat while bringing the state added revenues.''

The Fearless Fire Company social club in Allentown has struggled since it got rid of its machines three years ago after a raid. It' has cut costs, raised prices, but still is spending its savings to cover annual losses.

''Without the machines, we're all hurting,'' said Doug Toth, president of the Fearless club. ''We're 97 years old and I'm not sure we're going to see our 100th. This plan would save us. This would save a lot of clubs.''

Still, opposition is likely to come not just from anti-gambling groups but also from the state's 11 licensed casino operators, who didn't anticipate such competition when they paid $50 million each for a gaming license.

''We're very concerned,'' said Pete Peterson, spokesman for Mount Airy Casino in Paradise Township. ''We'd have to see the details of how this would work before we make any further comment, but we definitely have questions.''

To anti-gambling activist Florence Kimball, an officer with Lehigh Valley Citizens for Casino-Free Development, poker machines are no way to raise tuition money.

''Gambling is not an equitable way of funding programs, even programs for the community good,'' Kimball said. ''It promotes irresponsible spending by people who can't afford it, and encouraging it is analogous to encouraging people to smoke more so we can tax the cigarettes they buy to fund cancer research.''

Valley Citizens for Casino-Free Development has been dormant since losing the battle to block the Sands Casino in south Bethlehem, and Kimball said no decision has been made on whether it will reorganize to fight Rendell's latest plan.

Minutes after Rendell unveiled his plan, it was being blasted on the Internet by some who argue it would put a mini-casino in almost every Pennsylvania neighborhood.

Look around almost any neighborhood in Pennsylvania and you're likely to see a private social club. There are 176 in Lehigh and Northampton counties.

Behind the locked doors of fire halls, American Legion posts and Democratic and Republican clubs, members quaff $1 drafts, enjoy $5 entrees and socialize with neighbors. Most clubs require people to slide a membership card or use a key to get into an often inconspicuous, windowless building.

The clubs often sponsor Little League teams, buy uniforms for local police and give to local charities. In the past, revenue from a handful of illegal poker machines allowed such generosity. According to Rendell, social clubs continue to operate about 17,000 illegal machines.

But after years of turning a blind eye to the machines, police over the past two years have used $3.5 million dollars in state Gaming Control Board grants to raid clubs and bars.

The result has been dwindling revenues, forcing several social clubs to close, including Hellertown and Fountain Hill American Legions and the Weston Club in Easton. Others are staying afloat by burning off savings accounts they spent years building.

The Heights Athletic Association in Bethlehem was raided four times before its board removed the machines more than a year ago. Despite a healthy roll of 3,000 members, it has notified members that after 70 years of operation, it has only enough savings to stay open 17 months. Prices have been increased, charitable contributions have been cut and a membership drive is on. But its president, William Kirkhuff, said he's not sure that will be enough.

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