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The bill creating a new state Gaming Control Board deliberately grants the body broad powers and little oversight in the interest of fast-tracking Pennsylvania's slot machine business.

In addition to allowing the board to make and enforce its own rules, the legislation does not prevent the seven board members from acquiring ownership in slots parlors during their term -- two major flaws that invite corruption, said Rep. Tom Stevenson, R-Mt. Lebanon, who chairs the House Ethics Committee. Stevenson, who voted against the slots legislation, said he would poll colleagues for support to amend the bill.

"I don't want Gaming Control Board members being able to own an ownership interest in one of the casinos. It's that simple. It's a direct conflict of interest," Stevenson said. "They are also establishing their own enforcement agency. That's wrong. That's just asking for trouble. They make the rules and then enforce it?"

After signing the slots bill on Monday, Gov. Ed Rendell also signed an executive order prohibiting administration officials and state police from holding financial interest in the industry. The law allows members of the House and Senate to own up to 1 percent interest in a company with a slots license.

The seven board members will be paid salaries, although the amount hasn't been set. The governor will appoint three members; the General Assembly's four caucus leaders will appoint the other four. All will be limited to two or three short terms, which will be staggered, said Kate Philips, the governor's spokeswoman.

"There is accountability in the sense that their terms are limited, all their meetings are subject to the Sunshine Act, and, of course, the governor and Legislature have the ability to either keep or dismiss a board member," she said.

The plan is for the governor and legislators to appoint board members within 60 days. They are to begin meeting within 90 days, after background checks by state police.

Christopher Craig, who helped to craft the bill as legal counsel to Sen. Vincent Fumo, D-Philadelphia, said the law grants the board broader powers than the state's thoroughbred and harness racing commissions to get the slots industry established.

"This board has to be given significant authority to deal with circumstances that we can't even contemplate in drafting statutes," Craig said.

He said the law deliberately exempts the board from complying with civil service regulations when hiring employees so that it has flexibility to recruit experienced people. The board can set its own rules and regulations for two years, but those rules will be temporary, and the board later will be subject to independent regulatory review.

"Right now, there's a huge amount of pressure to get this board up and running and to get licenses properly issued," Craig said. "In order to do that, you have to create a brand new agency from scratch. ... You can't say, 'I want a strong board and to have it strongly regulated' and then not give the board the tools to do its job."

To craft Pennsylvania's law, legislators borrowed some of the strictest standards from New Jersey's gambling law, Craig said. In addition to divesting any stock they might own in the gambling industry, board members cannot bet and cannot make political contributions. They cannot take part in hearings in which they might have a pecuniary interest. They are not specifically prohibited from later acquiring interest in a gambling venture during their term.

Applicants for slots licenses must establish with "clear and convincing evidence" their own honesty and integrity and that of their business partners. They will be subject to background investigations into their families, habits, character, criminal histories, business activities, financial affairs and professional and personal associations, Craig said.

"These are very strict licensing standards," he said. "The board will license not just slots operators, but also manufacturers of slot machines, suppliers of slot machines and key employees -- basically anybody who handles money or has responsibility in the slots operation -- as well as anybody who has a contractual relationship."

The law requires a qualified majority on all board decisions: The four members appointed by House and Senate caucus leaders and one of the governor's appointees must agree before a license can be issued. But only a majority vote of all the members is required when suspending or revoking a license, Craig said.

That was done to ensure bipartisan decision-making, he said. For the same reason, members of the board can be removed only for good cause.

Craig said the gambling board was given the right to create its own enforcement bureau so that it can ensure compliance with matters specific to the industry. But, he said, that right doesn't prevent the attorney general's office, the state police or a district attorney from pursuing criminal investigations.

House Minority Leader H. William DeWeese, D-Greene County, said that in general, he is "very confident that the checks and balances inherent in the structural and definitional language in the statute will prohibit mischief and wrongdoing."

DeWeese, who voted for the slots bill, said he doesn't believe Stevenson's concern that board members could acquire financial interests in gambling after their terms begin is valid.

"If that were to be the case, we would have to amend the proposal," DeWeese said. "That's not what the intention of the General Assembly was. Any of the seven people involved in the gaming board would have to divest 100 percent of any investment in their portfolio in gaming in any state."

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