Published On: Tue, Aug 11th, 2015

State News: The Erie government agency that spends your gambling losses

Big losses at the Presque Isle Downs & Casino in Erie County may be bad luck for gamblers, but it’s always meant big bucks to the state and local governments.

More than 55 percent of the casino’s profits are required to go to the state coffers by law, but at least half a million makes its way to the Erie County Gaming Revenue Authority, the local government organization tasked with facilitating business development with funds taken from taxes on bets on the horse races or the slot machines.

In a sense, the ECGRA taxes the casino and uses the money to invest in favored industries and nonprofits in Erie County.

With its “targeted investments,” its executives see the gaming authority as the ultimate equalizer in the local community, and a powerful one. As of the last annual report, the organization has more than $10 million in the bank.

That has caused some to question whether government should be redistributing money in this manner at all, especially those which come directly from gambling losses and may help only favorite industries or groups.

Just last month, the organization gave away $1.2 million to its “Lead Assets,” made up of local museums, playhouses, and even the local Erie Zoo.

In 2014, the ECGRA gave the Jefferson Educational Society a $100,000 grant to engage community leaders, according to its annual report. Thursday, the Jefferson Educational Society released portions of its newest essay to local news outlets.

IN OTHER NEWS: NJ lawmaker proposes gambling to pay off student debt

“What’s important is that we’re not Rust Belt community,” said essay co-author Perry Wood in the essay. “I think we need to get the message across. This is the region who’s advanced manufacturing is thriving.”

Wood also happens to be the executive director of the ECGRA.

Though a good portion of the money ends up going to private industry, most is distributed to local governments, which often spend it on enticing business to invest locally.

Such was the case in 2011, when Summit Township used more than $500,000 from the gaming authority to give an interest-free loan to Lord Corporation, an Erie-based firm which creates mechanical parts. The promise of a half million-dollar loan prompted the private company to move into a new facility in Summit Township, worth over $100 million.

The organization has spent nearly $30 million on local business and community development in the past five years, but it hasn’t been without issue.

Not long after it was created, the organization received scathing criticism that it was merely sitting on the money.

“At present, all council members are concerned where this authority is headed,” County Council Chairman Fiore Leone said at a hearing in 2011. “These funds are not anything other than public funds, and they should be treated as such.”

A call to the Erie County Gaming Revenue Authority by Watchdog.org was not returned.

With so much money at stake from state gambling revenue, it’s no wonder problems have emerged.

The boon of tax dollars taken from casinos and gambling often cause costly legal battles between government entities.

Just this week, the city of Pittsburgh updated a lawsuit seeking $12.8 million from casinos promised by the Intergovernmental Cooperation Authority, the state agency which oversees casino fund redistribution and city spending. That’s slightly up from the $11.4 million it demanded in the original lawsuit in July.

“If this taxpayer-financed body is not going to do its job and support the financial condition of Pittsburgh, I have no choice but to do it for them,” Pittsburgh Mayor William Peduto said in a news release. “It’s far past time to shine sunlight on how the ICA works in the shadows to hoard and spend city money that should be going to road construction, police protection and other desperately needed services.”

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