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Auditor focuses on gaming

20 December 2006

HARRISBURG, Pennsylvania – (PRESS RELEASE) -- Auditor General Jack Wagner said today that the hiring practices of slots operators would be the focus of his first audit of Pennsylvania's multibillion-dollar gaming industry, and that he expected to begin in the first quarter of 2007.

Wagner made the announcement in a letter hand-delivered this morning to Theodore A. Decker, chairman of the Pennsylvania Gaming Control Board.

"The Department of the Auditor General intends to play an important oversight role and will exercise its authority to ensure that Pennsylvanians receive all of the benefits that they were promised" by gaming proponents, Wagner said.

Wagner's letter did not announce an official date for commencement of an audit. Wagner said that he would notify the board by formal engagement letter in the first quarter of 2007 of specific audit objectives.

With the majority of Pennsylvania's 14 slots casinos expected to be located in counties bordering other states, Wagner said he wanted to make sure that commonwealth residents are first in line for the tens of thousands of new jobs expected to be added in the next few years.

Wagner said the casino industry will offer "a magnificent opportunity to provide employment for Pennsylvanians that should not be missed." To make sure the opportunity is maximized, Wagner said his initial priorities in auditing gaming would be:

-- Examining the gaming control board's efforts in monitoring the residency status of employees of the gaming facilities and the board's efforts in promoting the hiring of Pennsylvania residents, as opposed to residents of surrounding states;

-- Studying the board's efforts in monitoring the diversity practices of the facilities' hiring process and the board's efforts in promoting the hiring of employees that reflect the demographics of the commonwealth, giving special attention to minorities, women, the unemployed and underemployed; and

-- Reviewing the employee background check process operated by the board, the Pennsylvania State Police, and other agencies to ensure that the checks are being completed in a timely manner and that all relevant aspects of an applicant's background are being scrutinized effectively, including whether the applicant is a legal U.S. citizen. Wagner stated that these background checks should be completed prior to employment.

According to Wagner's letter, subsequent audits may review other issues, such as the facility licensing process, internal controls over cash receipts, and the operation of programs funded by gaming revenues.

Nine of the planned casinos are expected to be located in close proximity to Pennsylvania's borders with New Jersey, Delaware, Maryland, West Virginia, Ohio, and New York. Wagner said he was concerned that the privately owned casinos would hire workers from other states, taking jobs away from Pennsylvania residents, particularly in areas where the unemployment rate is higher than the current statewide unemployment rate of 4.3 percent.

Wagner noted that more than 3,000 people waited in line to apply for 750 jobs at a 2,000-slot-machine casino scheduled to open in February at the Presque Isle Downs racetrack in Erie County - not far from Pennsylvania's borders with Ohio and New York.

Proponents of Act 71, the 2004 bill that legalized slots casinos, promised the creation of 10,000 to 15,000 quality, family-sustaining jobs in the commonwealth by the gaming industry. Because state law does not require casino operators to hire Pennsylvania workers, Wagner said he was concerned about how many jobs may go to out-of-state residents.

"To state quite simply, I believe that qualified, hardworking Pennsylvania residents should be hired for these new positions," Wagner said. He also emphasized that minorities, women, the unemployed, and the underemployed must have opportunities for all job categories in the gaming industry.

Auditor General Jack Wagner is responsible for ensuring that all state money is spent legally and properly. He is the Commonwealth's elected independent fiscal watchdog, conducting financial audits, performance audits and special investigations. The Department of the Auditor General conducts more than 5,000 audits per year.

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