Gamblor’s World

http://www.mcall.com/news/columnists/all-5tapestry-adec24,0,6219329.column?coll=all-news-col
December 24, 2006

Tapestry reveals a fourth branch of government
Paul Carpenter

Most of the pieces of the picture puzzle finally have come together, and they form a spectacular panorama of the complex network of sleaze that runs Pennsylvania.

At the center of this work of art are thousands of slot machines, all rigged to defraud suckers at more than a dozen casinos. (New state laws specifically allow the fraud.)

Licenses for five casinos were awarded the other day by the Pennsylvania Gaming Control Board, after meeting behind closed doors to hide its skulduggery from the public.

One casino will be built in Bethlehem at the site of what was once a fairly honorable institution - the old Bethlehem Steel plant. Two will be in Philadelphia and one will be in Pittsburgh, joining those at places like Pocono Downs near Wilkes-Barre. A fifth new license went to the Mount Airy Resort in Monroe County, owned by Louis DeNaples.

Nothing illustrates the slots sleaze masterpiece better than DeNaples, who, as reported in The Morning Call just one day before the five licenses were granted, is being investigated for links to organized crime.

The probe involves William D’Elia, in jail on various charges and described by officials as boss of the Bufalino crime family of eastern Pennsylvania.

DeNaples also is a convicted felon, who got probation after copping a plea in 1978 to charges involving a $525,000 scheme to cheat on government contracts. According to the Pennsylvania Crime Commission, that deal came after he managed to get a hung jury at trial. Some gangsters in the Bufalino mob were convicted of jury tampering in that case.

All that, in my jaded view, almost guaranteed DeNaples a license from the PGCB. This is an agency, after all, that is run by somebody recruited from what was hitherto America’s most corrupt gambling regulatory body in Louisiana.

Scandals enveloping the PGCB are almost as fascinating as those at another of our corrupt agencies, the Delaware River Joint Toll Bridge Commission, which has had, as its public relations flack, a fellow named Kevin Feeley.

Feeley’s name jumped out at us the other day, when it was reported that he is now the spokesman for DeNaples.

Feeley also has worked as a flack for Steve Wojdak, a state legislator I got to know (while holding my nose) when I was a reporter in Harrisburg. Later, Wojdak became a lobbyist for the special interests he had served so well in the House.

Anyway, Feeley has worked as the flack for a number of unsavory establishments, including the Indian gaming industry, the tobacco industry and the DRJTBC. But his chief claim to fame was when he spoke for Ed Rendell, then the mayor of Philadelphia. (Later, it was Gov. Rendell who finagled Feeley the DRJTBC job.)

None of the interlocking parts of this picture puzzle would be possible, of course, without the legislation that created the slots juggernaut.

While that legislation was so clearly unconstitutional a child could see it, it passed and Gov. Rendell signed it into law, knowing the fix was in with the Pennsylvania Supreme Court, which winked at its brazen illegalities last June.

(The Supremes wanted a similarly illegal pay raise for themselves, and knew they would not get it unless they played ball with the slots law.)

All this would be difficult if this was not the only state in America without a disclosure law for lobbyists and other special interest harpies, but Pennsylvania’s three branches of government skillfully conspired to prevent such a law.

There is much more to be said about this putrid tapestry, but I have reached the bottom of the page. So I’ll just observe that it is a tapestry woven by a complex of symbiotic serpents in all three traditional branches of state government, plus what has become our fourth branch, the gambling industry.

paul.carpenter@mcall.com 610-820-6176

Crime Cheaters often prosper

Perp-walks, prison spells, crusading politicians or a whole new raft Of Rules — What’s It Going To Take To Curb Corporate Crime?

The ones who didn’t get away: from left, Jeff Skilling, John Rigas of Adelphia, Enron’s Andrew Fastow, Tyco’s Dennis Kozlowski and World Com’s Bernard Ebbers.

Chris Sorensen, Financial Post, Saturday, December 30, 2006

Jeffrey Skilling will need some time to get used to his new digs. The former Enron CEO, who once lived in a US$4.7-million Houston mansion, will soon be bunking in a converted college dorm room on the outskirts of Waseca, Minn., 120 kilometres south of Minneapolis.

For would-be white collar criminals, Skilling’s punishment punctuated a rising wave of intolerance for corporate malfeasance in the wake of several high profile U.S. scandals. For investors and the general public, the event had a more visceral meaning: It seemed to prove that the Armani-clad Fortune 500 set lives under the same set of rules as the rest of us.

Aside from offering a sense of retribution, however, it’s unclear whether the get-tough approach will deter anyone from crime. New rules and regulations have boosted compliance requirements for U.S. and, to a lesser extent, Canadian companies, but those who follow the issue closely say what’s really needed is a fundamental shift in the culture of big business — a goal that remains elusive despite the popularity of talking about the need for ethics in the boardroom.

Indeed, some observers argue that piling on more rules and regulations will serve only to make future corporate crime more complicated and more difficult to detect.

“If somebody is motivated to cheat, they’re likely going to be bright enough and have smart enough attorneys and accountants to help them do it,” says Joe Des Jardins, the director of the Society for Business Ethics and a philosophy professor at the College of Saint Benedict and Saint John’s University in Minnesota.

“As corny as it sounds, I think the change has to come from within.”

Skilling’s sentence provided a sense of closure to the string of corporate scandals, beginning with Enron, that shook the public’s confidence in Corporate America in recent years.

While other white collar criminals have received harsh sentences — Edmonton- born World Com founder Bernard Ebbers received 25 years, former Tyco chairman Dennis Kozlowski got eight to 25 and John Rigas of Adelphia received a 15-year sentence — Skilling’s was the most-watched because Enron was the poster child of corporate greed. When the Houston-based energy trader collapsed in bankruptcy in 2001, it wiped out 5,000 jobs, US$2-billion of employee retirement funds and US$30- billion in investors’ money. Moreover, it had the dubious distinction of taking out what was once considered one of the world’s premier accounting firms, Arthur Anderson.

“The actions of the Enron people destroyed the retirement savings of thousands of employees,” said Thomas Hurka, a philosophy professor at the University of Toronto. “They just lost everything. I mean, if somebody stole that amount of money in a bank robbery, they would get a huge amount of time in jail.”

For many the harsh sentences handed down to Skilling and others were necessary to convince people that corporate crime was at last being taking seriously.

But while many argue that the high profile trials and convictions of Skilling and others prove the criminal justice and regulatory systems are working, it’s certainly not the first time authorities have pledged to crack down on white collar criminals.

Similar pledges were made in the wake of the savings and loan scandals of the 1980s, as well as following the trial of Michael Milken, “The Junk Bond King” who served a fraction of his 10- year prison sentence and remains on Forbes magazine’s richest people list with a net worth of US$2-billion.

“When I was writing a newspaper column in the early 1990s everybody was talking about the 1980s as being the decade of greed and, thankfully, that’s all behind us no w,” Mr. Hurka says. “Then all of this chicanery happened in the 1990s.”

So, has anything really changed?

The official U.S. response to Enron, World Com and other scandals came in the form of the Sarbanes-Oxley Act, passed in 2002. SOX aims to shore up firms’ accounting and reporting practices and help restore investor confidence in capital markets.

The new rules included a requirement for companies to set up independent audit committees and whistle-blower programs, as well as having their CEOs and CFOs sign off on financial statements, among other things.

Many in the business world have mocked the concept of more regulations, arguing companies are wasting a substantial amount of time and money on compliance, but there is little dispute that oversight of executives and employees has increased substantially as a result.

But a more effective tool in the arsenal of regulators may ultimately prove to be a handful of crusading politicians, including Eliot Spitzer, the attorney general for the state of New York, who effectively made it his mission to put Corporate America on notice. (He was elected governor in November.)

“These guys are very able and don’t have to do a lot of consulting before they launch their lawsuits,” said Len Brooks, the executive director of the Clarkson Centre for Business Ethics and Board Effectiveness at U of T’s Rotman School of Management. “It’s one thing to be dealing with a national regulator in the U.S. Securities and Exchange Commission, but you are also dealing with these folks that are incredible aggressive and gifted litigators. You know that it’s going to cost you a ton of money even if they don’t get you.”

Mr. Brooks believes U.S. executives are now less likely to commit fraud simply because they fear being subjected to the humiliation of a “perp-walk,” as the parade of hand-cuffed executives into U.S. courthouses came to be known.

In Canada, however, it’s a different story. “The level of fines is dramatically less than in the U.S., never mind the fact that very few people go to jail,” he says.

Mr. Brooks thinks the Ontario Securities Commission, the country’s largest securities regulator, has been much less aggressive than the SEC when it comes to pursuing corporate criminals.

It may be that Canadians will have to live vicariously through the U.S. legal system as Patrick Fitzgerald, the U.S. attorney for the Northern District of Illinois, attempts to prosecute Conrad Black, the former Hollinger International Inc. chairman, who is accused of looting his company. The trial is set to begin in March.

Corporate crime is notoriously difficult to detect, let alone prosecute — regardless of how much regulatory oversight has been put in place.

In the case of Enron, it took investigators months to unravel the company’s convoluted business structure. Even then, the case against Enron’s executives was far from being a certainty since

many of the things they were accused of doing — fancy accounting manoeuvres such as off-balance sheet transactions, for example–aren’t necessarily illegal. But are more rules the answer?

Ethics professor Mr. Des Jardins argues that most MBA students are taught that business is a high-stakes game that occurs within set rules, but that the rules can be bent and stretched with few meaningful consequences. “It’s all no harm, no foul. It’s just a big game that we all play to win.”

A better approach, he says, is to focus on creating a culture of ethics at universities.

After teaching the subject for nearly 25 years, Mr. Des Jardins says he’s pleased to at last see the field be taken seriously by students and educators, with more courses being offered and more ethics content being added to existing class materials.

That said, Mr. Des Jardins says there will always be a need to vigorously prosecute and punish offenders such as Enron’s Skilling and others. “I mean, these kids want ethics, but they are also skeptical. And if those guys walked, then the skepticism would have won.”

csorensen@nationalpost.com

© National Post 2006

© 2006 CanWest Interactive, a division of CanWest MediaWorks Publications Inc.

Ed. This is article is very appropo for me as I just started reading “The Corporation: The Pathological Pursuit of Profit and Power” written by Joel Bakan and first published in hardcover in Canada in 2004. The book is an extended look at the corporation and follows the same themes discussed in the documentary “The Corporation” (which I have seen).

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Is how slots are programmed a well kept secret?

By John Robison

29 December 2006

I have a couple of questions that have plagued me for quite a while.

1. Is there any knowledge out there about how slot machines are programmed, or is this a well kept secret? (I see the same layout of reels on a repeating basis, some kind of a cycle appears to be present on the way the reels display “almost jackpots”).

2. How do the casinos that report a ‘94%’ payback on their slots actually do that, since the slot machines are supposed to be operating on a random number generator? Or is there another program running in them that keeps track of paybacks and modifies the RNG so that they meet the 9x% paybacks or makes sure that the house gets it appropriate cut?

3. Are there programs running in slot machines besides the RNG that observe the number of coins played and adjust the probabilities based on that. (For example: are you just as likely to hit a significant jackpot if you only play 1 coin per line, or do you have better odds on getting a significant jackpot by playing 5 or 10 coins per line?)

4. Is there a network that the slot machines are connected to that allow them to report back to casino management how much they take in and how much they pay out at any given time that management wants to poll them?

5. Is there any truth that the $1 slots have a higher payback than the quarter or nickel ones? And if so, technically, how do they do that, since I have always heard that the outcome is totally random.

Thanks for any info that you can provide.

1. Yes, there is plenty of information available about how slot machines are programmed. There are many articles on this site about that subject. The problem is that many players do not believe that whatever patterns they think are present are not the result of the random selection of outcomes, but instead are the result of a grand conspiracy among slot manufacturers, gaming commissions, testing labs, and casinos to manipulate the machines.

Virtual reels are laid out to show near misses by having the blanks above and below a jackpot symbol appear on the reel more times than the jackpot symbol. Another technique is to have more jackpot symbols on the first two reels than on the third reel.

The only reason you may see these combinations on a repeating basis is that they are likely to occur. An analogous situation is frequently drawing a red marble out of a bag of 70 red marbles and 30 blue. You get “almost jackpots” so frequently only because they are more likely to occur than a jackpot.

2. Any manipulation of the results determined by the RNG is illegal. The only thing random on a slot machine is the result that will land on the payline next.

Let’s go back to my bag of marbles. We’ll draw one without looking, note its color, and return it to the bag. We have no idea what color marble we’ll draw next, but we do know that over a large number of draws, about 70% of them will be red and 30% blue.

On the slot, we don’t know what combination will land on the payline next, but we (or, at least, the casino, manufacturer, and gaming commission) know that the combination is drawn from a pool of combinations that pays back 94% and so the machine will pay back 94% of the money played in it in the long term.

3. The number of coins you play has no effect whatsoever on the symbols that land on the payline. Coins played is taken into account only when determining how much you should be paid for a winning combination.

4. Yes, slots are networked so they can report how much they’ve been played and how much they’ve paid out to a central accounting system. The network is also used to track play for the slot club and to report events on the machine (such as hand-pay required, for example) to a central system.

5. Yes, higher denomination machines do tend to have higher long-term paybacks than lower denomination machines. The pool of possible outcomes on the higher denomination machine has a higher long-term payback than on the lower denomination machine. The long-term payback is altered by either changing the paytable (which is how video poker paybacks are changed) or by changing the layout of the symbols on the virtual reels.

Remember, random does not mean that everything is completely unpredictable. The only thing random on a slot machine is the combination that will land on the payline next.

Best of luck in and out of the casinos,

John

Send your slot and video poker questions to John Robison, Slot Expert, at slotexpert@comcast.net. Because of the volume of mail I receive, I regret that I can’t send a reply to every question.

John Robison

John Robison is an expert on slot machines and how to play them. John is a video poker columnist and writes for many of gaming’s leading publications. He holds a master’s degree in computer science from the prestigious Stevens Institute of Technology.

You may hear John give his slot and video poker tips live on The Good Times Show, hosted by Rudi Schiffer and Mike Schiffer with Frank Scoblete, which is broadcast from Memphis on WMC 790AM Saturday morning from 9:30 to noon Central Standard Time. John is on the show from 10:30 to 11:00. You can listen to archives of the show on the web anytime.

John’s BOOKS

The Slot Expert’s Guide to Playing Slots

Copyright © 2002-2006 Casino City, Inc. or its affiliates.

Ed. The questions are good. ‘Almost jackpots’ are usually called ‘near misses’. For another take on this issue I suggest that you go to http://www.knowodds.org/reels.html and read a synopsis of the article “Unbalanced Reel Gaming Machines” by Roger Horbay and Tim Falkiner. Other sources of information can be found at http://www.citizenvoice.ca/forum/index.php indexed under forums (ie. Easter Eggs).

LONDON, Dec. 29 (UPI) — In the wake of a recent liberalization of gambling laws, a British government advisory panel has issued a warning about electronic gaming machines.

The recent change in the gambling laws is expected to allow the installation of hundreds of the electronic gaming consoles in the country’s planned supercasino, the Daily Mail said, and the panel warned potential users of the devices’ addictive qualities.

Britain’s Casino Advisory Panel has chosen the town of Greenwich outside of London as the new supercasino’s location.

Tagged by one U.S. expert as being as addictive as crack cocaine, the electronic machines were described in the warning from the British group as “a highly addictive form of entertainment.”

The paper said government officials also warned that the devices could ultimately lead to an increase in problem gamblers within Britain’s borders.

© Copyright 2006 United Press International, Inc. All Rights Reserved.

07:50 AM, December 29th 2006, by News Staff UPI

For the first time in several years, the Missouri Gaming Commission has begun expanding its list of people banned from area casinos.

While the commission’s “exclusion list” was once oriented toward cheaters and organized crime members, it will now include criminals such as two men recently convicted of felony theft, the St. Louis Post-Dispatch reported.

The two carpet installers gambled away money they had received as payment for services they never performed. The commission voted last month to ban them.

“If a judge puts somebody on probation and there is some link to gambling, then we will look at that and consider putting them on the exclusion list,” said Gene McNary, executive director of the state group.

If those on the list are found on the premises of any Missouri casinos, they can immediately be charged with trespassing, a Class B misdemeanor.

The commission is also looking into strengthening the penalty attached to violations, the newspaper said.

© 2006 UPI

Sunday, December 24, 2006
Mike Wagner
THE COLUMBUS DISPATCH

Art Schlichter wandered outside the walls, in the shadows of a stadium where he once made the masses roar.

He went unrecognized, almost invisible to the thousands who swarmed the gates.

Hundreds of scarlet-clad fans wearing his old number brushed past the former quarterback. They honored Troy Smith, the current
No. 10, not the one they have forgotten or use as a punch line.

On this chilly October day, Schlichter brought his mom, Mila, to watch the Buckeyes play Minnesota. It was the first Ohio State
game he’d attended in 13 years.

Schlichter braced himself against the wind swirling around Ohio Stadium and the emotions that churned inside him. His dark
eyes hid under a white baseball cap, but they couldn’t conceal what sullied his return to the place where he once found glory.

“I’ve hurt a lot of people since I’ve been here,” he said. “I’m more sorry than people will ever know.”

Since leaving Ohio State 25 years ago, Schlichter has gone from All-American quarterback to one of America’s best-known
compulsive gamblers. Since 1994 he has served time in 44 prisons or jails, mainly for fraud and forgery — swindling people out of money or
writing bad checks to feed his addiction to gambling on sports and horse races.

Those close to him estimate that Schlichter has flushed away at least $1 million gambling.

Schlichter, 46, was released early from an Indiana prison in June, then spent four months at a gambling treatment center in Baltimore. He
recently moved back near Washington Court House, about 40 miles southwest of Columbus, to live with his mother in a home
close to what once was their family farm.

But he remains locked up by a destructive past that he can’t escape and a future filled with skepticism.

The addiction has damaged nearly all of his relationships. It divided his family, tested his closest friendship, tainted his
legacy at Ohio State, ruined his marriage and separated him from his daughters most of their lives.

Schlichter said he last placed a bet Jan. 12, 2005. He lost $20 on a professional basketball game. He made the bet from prison.

“I don’t want sympathy. I don’t deserve sympathy,” Schlichter said. “I just want a chance to make amends, especially with those I
love most.”

The question is not whether Schlichter wants redemption.

It’s whether he’s strong enough to earn it.

Playing for “Max”

The echo of a pre-game cheer drifted outside the stadium, where Schlichter walked in anonymity. The buzz of the crowd shouldn’t faze
Schlichter, once the golden boy who starred in jammed stadiums from coast to coast. But it penetrated his casual shell and exposed the
farm boy who first saw his Camelot on a black-and-white television.

“I grew up taking care of sick hogs and doing chores on the farm,” he said. “It was a big deal for me to come here, for my family
when I came here, especially my dad.”

The faces of the Schlichter family, young and old, pressed against the frosty windows as they watched the white El Camino with
wooden side panels move slowly up the driveway.

Woody Hayes and his wife, Anne, were coming to Thanksgiving dinner. The coach was coming to get a new quarterback before his
archrival from Michigan could snatch him.

Ohio State’s football leader would have to win over the Schlichter family’s leader to get what he wanted.

John “Max” Schlichter, a Fayette County farmer, extended his giant hand to Hayes as he walked through the doorway. In that
moment on Nov. 24, 1977, the deal likely was sealed.

“In the end it was my call, but my dad really liked Woody,” Schlichter said.

“I know people had a lot of opinions about my dad. Some said he was a good guy with a big heart. Some said he was a big
controlling bastard. He was a simple farmer who was strong and protective of his family. I know there are people who say my dad pushed me too hard, but he didn’t push me into anything.”

Max and Mila leased most of their 2,000 acres, which produced corn, soybeans and wheat. Art and his older brother, John, and
sister, Dawn, all had chores.

But sports ruled in the Schlichter house. Max hung a net in the yard so Art could throw a football. He put up a basketball court
in thebarn so Art and John could play one-on-one.

“We didn’t have a whole lot, but we had a good childhood,” said John Schlichter, now a state representative. “But what happened
later with Art took its toll on everyone, my dad included.”

Off and on for years, Max gave his son thousands to pay off gambling debts. Schlichter also would use his father’s credit card
to generate money to gamble. “I caused my dad and my mom a lot of pain, too much pain,” Schlichter said.

But Schlichter doesn’t blame himself for his father’s death. In 2002, Max was found dead in a Clintonville swimming pool. Authorities ruled
it a suicide.

“My dad had remarried and was living a completely different life by then, one that few of us knew much about,” Schlichter said.
“My troubles were fullblown long before my dad’s death.”

Schlichter said he called and talked with his dad the night before he died. Max told Art he loved him, which he didn’t often do
over the phone.

The day his dad was buried, Schlichter sat alone in an Oklahoma City prison cell. He visited his dad’s grave for the first time
this past summer.

Covering for a friend

The football floated over a row of cars in the Ohio Stadium parkinglot and was snatched just before it could dent the hood of
a black Lexus. The two boys wearing varsity letter jackets debated whether it was a bad throw or a poorly run pattern that nearly ruined
the parking lot tailgate about a half hour before kickoff.

Schlichter smirked at the boys and thought back to when he wore a letter jacket. “It’s never the quarterback’s fault,” he
said. “I have been telling my best friend that for years.”

Their dusty pictures still hang next to each other outside the Miami Trace High School gymnasium. Schlichter is the chiseled,
dark-haired magnetic wonder kid. Billy Hanners is the gangly, bushy-haired, awkward guy with dark-rimmed glasses.

The farm boys and best friends met in the fifth grade. A few years later, Schlichter, the golden-armed quarterback, and
Hanners, his favorite wide receiver, would bake in the summer sun throwing pass after pass between the corn fields.

Together, they would never lose a high-school football game.

On their last day of high school, when the student body sprinted for the front door, Schlichter and Hanners walked out back and
sat on the ground near the football field.

The two tough guys held hands and cried.

“For two 18-year-old kids, it couldn’t get any better than we had it back then,” Hanners said. “We didn’t want it to end.”

Nearly every college in America wanted Schlichter, but most didn’t want his buddy.

Recruiters from some big schools, such as Tennessee and Wisconsin, contacted Hanners about playing football, but mainly as a
way to get his best friend onto campus. Hanners ended up at Murray State, wherehe played for a year before hurting his knee and leaving
school to help his father run the family horse business.

Schlichter’s gambling footprints are murky, but the first ones likely lead to a race track on Columbus’ South Side.

When they were 18, Schlichter started going to Scioto Downs, the harness racing track, with the Hanners family.

The bets started small — $2, $5 or $10 a race — but steadily rose. The friends discovered they both had an appetite for gambling.

Hanners didn’t realize how deep Schlichter had slipped into gambling until he flew to Baltimore to visit his friend in 1983.
Schlichter had been the fourth pick overall in the 1982 NFL draft and was preparing to begin his second year in professional football for the
Baltimore Colts.

“One of the first things Art did when I got there was pick up a bag full of money” from bookies, Hanners said.

Hanners soon found himself taking calls from Schlichter’s bookies. Schlichter would put as much as $3,000 on an NBA basketball
game and bet as many as a dozen games in a night. His bet of choice was often a
parlay, which pays higher odds for picking three or more games correctly.

Hanners pleaded with his friend to stop, but the bets kept coming.

One night Schlichter won more than $135,000 betting on basketball, but he lost it all in three days. He suddenly owed the bookies
close to $50,000. During one week, Schlichter lost $300,000.

For three straight weeks, Hanners met one of them at Port Columbus on Schlichter’s behalf to hand over an envelope containing
$10,000. Hanners didn’t go to the airport to make the fourth
payment, but the FBI did and arrested three bookies.

Schlichter had confessed his gambling problem to what he
called an “adviser,” who then contacted the FBI. Eventually Schlichter told the
NFL about his involvement with the bookies and his gambling troubles.

The league suspended him. Schlichter and Hanners soon found
themselves in the middle of a scandal that made headlines nationwide.

“I thought I was helping him get out of the situation. I
was hoping we would get those guys paid off and be done with it,” Hanners said. “I was trying to protect him from himself.”

Schlichter’s compulsive personality didn’t take him into other addictions. He’s consumed alcohol only a handful of times
and hasnever been known to do drugs.

The gambling addiction and Schlichter’s life in prison have tested their friendship, but no one has remained more loyal to his
childhood friend than Hanners.

“Unless you have bet your rent check on a horse race or a
ball game, which I have, you can’t put yourself in his shoes,” he
said. “You do whatever it takes to make a bet or find money to cover a
bet. I just want Art to find peace.”

Gambling on stardom

A smattering of cackles and boos trailed the guy wearing the maize and blue block “M” hat as he strolled through the horde of
Buckeye fans. This is the Minnesota game, a mere scrimmage for the fans awaiting the showdown with Michigan.

“That takes some guts,” said Schlichter, flashing a wry smile.

Schlichter admits he was close to becoming a Wolverine, unsure he wanted to be part of Hayes’ famed “three yards and a cloud
of dust” offense.

“I’m a Buckeye, always will be,” he said. “Woody was Ohio State, but my next coach was as big of a Buckeye as anyone.”

Reporters crowded around the star quarterback in the steamy basketball locker room. During recruiting, Hayes had promised
Schlichter he also could play for the OSU basketball team as a freshman. Schlichter’s
first love was basketball, in which he also starred at Miami Trace High School.

But Hayes was gone now, fired by the university after punching a Clemson linebacker in the 1978 Gator Bowl. The punch
followed a game-clinching interception thrown by Schlichter.

The reporters told Schlichter that his replacement was some guy named Earle from Iowa State University.

Schlichter replied that he might leave Ohio State.

He stayed, had a brilliant sophomore football season and nearly won a national championship with Earle Bruce as coach. And no
Buckeye quarterback has thrown for more yards than Schlichter did at Ohio State.

“Art was a loner,” Bruce said. “Off the field, he made his life so secretive and unavailable. It was masked by his father and
other things. On the field, Art and I never had any problems. He was a master, a leader. And his sophomore season, Ohio State
never had a better quarterback.”

The football field wasn’t the only place where Bruce and Schlichter huddled. The Ohio State coach and his star were both
regulars at the horse track. Both men say they never went together, but they occasionally would share a meal at the track or talk there
about the races.

“I never took Art to the track. Let’s make that clear once and for all,” said Bruce, who has stuck by Schlichter and visited
him in prison several times. “I didn’t know Art had a problem with gambling back then.”

Bruce might have been unaware, but many of Schlichter’s teammates knew.

There were dozens of latenight poker games. Constant trips to Scioto Downs and Beulah Park. And regular bets on football,
basketball, baseball and boxing.

“We bet on everything,” said Bob Murphy, former Ohio State defensive back and one of Schlichter’s closest friends on the team.
“Art and I gambled together all the time. It was small amounts — $20 or $50, maybe $100 — whatever we had in our pockets.”

Murphy, who lives in California, said his gambling with Schlichter included making small bets with bookies on college football
games. “But we never bet on an Ohio State game,” he said.

Murphy said Max Schlichter discovered that he and Art were making bets while Ohio State was preparing to play Penn State in the
1980 Fiesta Bowl. “Art said his dad cornered him in the basement back home and he confessed that we were gambling,” Murphy said. “Art said
his dad was looking for me at the Fiesta Bowl and wanted to have a little talk. He never did come see me, thank God.”

Schlichter said he doesn’t remember betting on college football games while playing for Ohio State.

Paying the price

The little girl with the windburned cheeks nearly tripped over her pink scarf while she ran toward the stadium gate and pulled
her dad by the arm.

“I don’t want to miss the band,” she said. “Hurry up, Dad.”

The scene is not lost on Schlichter, who has been away from his two daughters most of their lives.

They have never seen a game here, never seen this place, where their father’s life once seemed pure.

“I hope they can come here someday,” Schlichter said, his eyes moist. “I hope they want to come here with me.”

Mitzi Schlichter thought it was an odd time for a knock on the door. It was evening, and she and her sister were caring for her
two young daughters. Maybe a pizza delivery boy had the wrong address or a kid was selling cookies.

She opened it to find an FBI agent in the doorway.

Dozens of checks from her sister’s closed bank account had been signed and cashed around Las Vegas. Schlichter admits to stealing
the checks after they were mailed to his sister-in-law at his home.

It took only moments for Mitzi to realize that the FBI didn’t want her sister. It wanted her husband, Art, who in early 1994 had
gone on a gambling spree with the checks and was likely in a casino when the FBI came looking for his sister-in-law.

“I decided then I wasn’t going to let his addiction destroy my children,” Mitzi said.

Mitzi, who married Schlichter in 1989, eventually took their daughters and moved back to Indiana with her parents.

Schlichter soon began a string of prison sentences that continued for the better part of the past 12 years.

When Schlichter first went to prison, he wasn’t allowed to talk to his family for at least two months. Then came the moment that
Mitzi hoped would finally propel her husband never to make another bet.

Schlichter’s 4-year-old daughter begged her dad to come home. The phone was wet with tears as she repeatedly asked her dad
why he would leave.

“To hear his daughter wailing for him, I thought that would be a life-changing experience,” she said. “That’s why I gave him
another chance after he served 15 months or so in prison.”

But Schlichter didn’t stop gambling or stealing money to feed his addiction. Shortly after moving back in with his wife and
daughters, he was arrested again, this time for stealing checks from his employers.

The Schlichters were divorced about two years later.

Mitzi met Schlichter when she was a 21-year-old student at Ball State in Muncie, Ind. Friends fixed them up on their first date.
She knew Schlichter was an NFL quarterback and had some trouble with gambling. But she wasn’t scared off by his addiction. They dated for
five years and routinely attended treatment sessions or meetings
together.

Those meetings did more to save Mitzi than her husband.

She learned never to combine her money with Schlichter’s. They didn’t have a checking account. There was a savings account only
in Mitzi’s name. She never had a joint credit card or signed off on any loans with her husband.

“We only paid for things in cash,” she said. “I would go to the grocery store once a month and get 10 money orders to pay
our bills. When we split, I had some tax issues to fix, but overall I came out of it financially better than most people.”

The Schlichters’ daughters were born four years apart, in 1990 and 1994. In between, the couple had a boy, Shane, who was
stillborn at about eight months. “He was my son,” Schlichter said.

Mitzi is now remarried and living in Indiana with their two daughters,16 and 12. Since leaving prison last summer, Schlichter has
been respectful of her current husband and is making a full-fledged attempt to re-enter his daughters’ lives. Schlichter routinely
drives to Indiana to see them.

“He is stepping into their world, and I am allowing the girls to decide how much,” she said. “He loves them, and they love
him.”

Searching for redemption

A few rows from the mushy field, Schlichter stopped where the shadow met the sunshine in Ohio Stadium.

Moments before the start of the OSU-Minnesota game, an usher tapped his shoulder and told him to find his seat, somewhere near
the 5-yard line.

“This isn’t the same place I played in,” he said, casting his eyes down.

“And I’m not the same guy that used to play here. I haven’t had much contact with anyone at Ohio State, and I’m not sure they
want to have contact with me.”

There is no photo remembering Schlichter in Ohio State’s media guide or game-day programs.

No halftime ceremony honoring his storied career. No local endorsement deals or invitations to exclusive parties.

For years, his only contact with the so-called Buckeye
Nation was from a prison radio or TV.

But three weeks after the Minnesota game, where Schlichter sat quietly in the stands with his mom, the door to a school that has
shunned him cracked open.

The day before the Michigan game, at a benefit honoring Earle Bruce, Schlichter was invited to join other former players on the
sidelines the next day.

Troy Smith, wearing Schlichter’s old number, was making his final warm-up throws moments before kickoff when Schlichter
walked over to greet the Buckeye quarterback.

Smith hesitated at first, maybe because he didn’t know who Schlichter was, maybe because he knew exactly who Schlichter was.

But Smith extended his hand to Schlichter and flashed his Heisman grin.

Coach Jim Tressel was next to shake Schlichter’s hand.

“Welcome back, Arthur,” Tressel said.

The day was surreal, overwhelming.

But his reality is far from the fleeting glamour of the Buckeyes sideline. It’s checking in with a probation officer.
Continuing to attend 12-step meetings for addicts. Trying to find a way into his daughters’ lives.

For now he is jobless, relying on help from family and friends. Schlichter is in the process of establishing a foundation
to educate people about the dangers of compulsive gambling.

But his demons remain.

And no one, not even Schlichter, knows whether he ever will truly come back.

mwagner@dispatch.com

Copyright (c) 2006, The Columbus Dispatch

MISSISSAUGA, Ont. (CP) - A veteran Alberta political warhorse is being honoured for helping Canada’s harness racing industry

Thursday, December 28th, 2006 Brandon Sun, Canadian Press

Former premier Ralph Klein is to be presented with the Cam Fella Award next month in Mississauga by Standardbred Canada. The organization says no other provincial government has been as supportive to Canadian horse racing as the Klein-led Progressive Conservative government in Alberta.

The provincial government is pumping about $63 million into horse racing this year alone.

The government estimates the industry is worth about $385 million annually to Alberta’s economy.

Horse Racing Alberta dedicated a bronze statue to Klein in Calgary in September to thank him for the millions of dollars the government gave the industry over the years.

© Copyright 2006 Brandon Sun All Rights Reserved.

PAUL WALDIE, Globe and Mail, 28/12/06

Brian and Terry Leblanc were once a couple of average guys, spending their days washing windows and their nights drinking beer and watching sports on TV.

In the late 1980s, the brothers won about $90,000 at Toronto’s Woodbine race track and decided to put that money toward more sports betting. Within a few years, the Leblancs were managing a full-time betting operation from their home in Aylmer, Que., wagering up to $300,000 a week mostly on games such as Pro-Line.

Their strategy was simple: bet huge amounts on events with incredibly long odds. Naturally, they lost most of the time, but, when they won, they won big. They pocketed $1.7-million three times — on two bets in 1996 and one in 1999 — and won about $5.5-million from 1996 to 1999. During that period, they wagered $52-million.

It wasn’t long before the Canada Revenue Agency took note. In 2000, the agency sent them a notice of reassessment for the years 1996 to 1999, saying their gambling was a business and subject to tax.

The CRA was convinced the men used a “system” to make bets and noted their operation included a computer program to manage wagers and as many as 15 paid helpers. The brothers denied using any system, saying they relied only on luck. And, they added, gambling winnings were not taxable.

The case ended up at the Tax Court of Canada and, last week, Mr. Justice Donald Bowman ruled in favour of the Leblancs.

“It is true, they won but to say they won because they had a system has no basis in the evidence at all,” Judge Bowman said in his ruling.

“They won in spite of having no system. If one is looking for a pattern, it is that they bet massively and recklessly and in those games where they could, they bet on long shots. Certainly it meant that if they won they won big, but the converse is that if they lost, they lost big and, given the astronomical odds against winning, their chances of losing were far greater than their chances of winning.”

The judge said the Leblancs were compulsive gamblers, but they were not running a business and their winnings were not taxable.

William Vanveen, an Ottawa lawyer who represented the brothers, said the ruling was an important victory for gamblers everywhere.

“What it boiled down to was that luck is not taxable,” Mr. Vanveen said yesterday.

In order to win its case, he said the CRA had to prove that the men developed a system to minimize their risk, something like a pool shark who practises by day and then takes on unsuspecting drunks by night.

“The mistake CRA made was they just looked at the volume [of betting] and said all this volume amounts to a business,” Mr. Vanveen said. “These [lotteries] are advertised and are accepted to be tax free. [The brothers] have a big win, they don’t work after that, so what’s the problem?”

The lawyer representing CRA was unavailable for comment. The CRA could still appeal the ruling.

As Judge Bowman noted, the Leblancs led unusual lives.

They grew up in the Toronto area and had little more than high-school education when they joined their father’s window-washing business in the 1980s. After winning money on the track, they decided to jump into Pro-Line, which was launched in 1992. They lost about $10,000 in their first year, but soon scored big with two $1.7-million wins in January and February of 1996. By the mid-1990s, they moved to Aylmer, near Ottawa, so they could play both Ontario and Quebec lotteries. They kept their lives simple, driving old cars and eschewing flashy jewellery.

“They spent their time playing lottery games or watching sports on television,” the judge noted. “They also played Ping Pong and golf and sat around the house drinking beer and eating pizza.”

Not everything went well. Around 1996, Terry Leblanc fell in love with a stripper named Josée Dubreuil and showered her with gifts, including an $850 engagement ring, $2,000 for breast implants and $14,000 in cash, according to court records. The relationship ended after Ms. Dubreuil stole $124,000 worth of winning lottery tickets from a jar the Leblancs used to store winning bets (the theft prompted them to buy a safe). Ms. Dubreuil was later convicted and given an 18-month suspended sentence.

In 2000, they also got into a spat with dog-racing regulators in Australia who withheld nearly $200,000 the brothers won via an online bet. The Australians alleged manipulation but eventually backed down and gave the Leblancs their winnings.

Brian, now 35, and Terry, 41, were not available for comment yesterday. According to Mr. Vanveen, Terry still lives in Canada while Brian has moved to Britain.

Both are still gambling, he said. “Not like they were before.”

© Copyright 2006 Bell Globemedia Publishing Inc. All Rights Reserved.

Since Don Barden’s Majestic Star casino group was awarded the one slots license in Pittsburgh last Wednesday, there has been a lot of ballyhoo about the situation, ranging from the critically serious (the Penguins could leave Pittsburgh) to the annoyed (the Steelers and Del Monte Foods, among other North Shorers, are more than a little wary of the effects of a casino in their neighborhood) to the out and out excited (numerous smaller (read: less successful) North Shore businesses).

But perhaps the most interesting backlash of all this has been a grumbling among some in the city that Barden, the only minority in the slots license war, was the beneficiary of some sort of super-affirmative action; that he won the licensure from the state simply because he’s black. At first, this seemed to be the view of some wild-eyed Penguins fans upset that Isle of Capri, the slots owner promising $290 million for a new multi-purpose arena that would have ensured the Penguins’ viability in Pittsburgh for decades, did not receive the license. On the surface, the complaint is wholly valid because neither Barden/PITG Majestic Star nor Forrest City/Harrah’s had any kind of inclusion in their plans to give Pittsburgh that much money upfront for capital development. However, to go so far as to say Barden won the license simply because he’s black is a little hard to swallow. But to be fair, Gov. Ed Rendell, in a statement released Dec. 20, didn’t help this conspiracy theory, referring to Barden as “one of the most successful minority gaming owners in the U.S.” If Barden’s race had nothing to do with his being awarded the license, then why refer to him as a “successful minority gaming owner”?

More than that, though, a story published Dec. 22 in the Tribune-Review throws the other half of Rendell’s statement — that Barden is a “successful” gaming operator — into doubt. According to the story, “Barden’s only other property under the Majestic Star brand [are] two casino boats in Gary, Ind. Barden took over the Trump Casino boat in January.” (Barden also owns three casinos under the Fitzgeralds brand.) Since Barden took them over, the properties have lost money. As cited in the story, the boats took in $11 million in revenue in November 2005 and $8.8 million in November 2006.

Merriam-Webster defines “successful,” in part, as “gaining or having gained success (successful investor).” Losing $2.2 million in less than one year is not gaining or retaining any kind of success.

The Tribune-Review story goes on to say that in an effort to make the boats more profitable, Barden has been cutting costs. One of his cuts was a reduction in gaming tables from 66 to 37. To be fair, this shows that Barden is at least attempting to keep his interests afloat - as any good business owner would. But what does all this say about Barden’s ability as a gaming operator?

More questions have sprung up in the past few days concerning Barden’s ability to cash in on his promise to have the Pittsburgh casino, a sprawling $450 construction, up and operating by March 2008. A Post-Gazette story run on Dec. 25 expertly — and starkly — investigates the trials and tribulations of casino construction. Kevin Daly, “a professional construction scheduler [and] the head man for Benchmark Associates, a St. Louis-area consulting firm,” is quoted over and over again as doubting Barden’s ability to erect the kind of facility he is touting. The reason is that the timetable isn’t simply aggressive, it’s almost unworkable. Daly is currently planning the design and construction of a new casino being built near the Gateway Arch in St. Louis, Lumiere Place. This casino is similar in size, scope and monetary figures to Barden’s proposed North Shore facility. And like Barden, Daly is going to be utilizing double shifts in order to complete the project — in a proposed two years.

The rest of the story is eye-opening in how iffy Barden’s plan seems to be. But the most troubling aspect revealed by the Post-Gazette is that Barden has never constructed a new casino, let alone one as big as the proposed North Shore facility. Besides the two riverboats Barden operates, the three casinos run under the Fitzgeralds brand were purchased as pre-existing structures. If this is the case, what kind of compelling argument was given to the Pennsylvania Gaming Control Board to entice them to vote for Barden’s casino plan as the best one for Pittsburgh and Pennsylvania?

To recap, Barden was the only minority gaming operator with a proposal for the Pittsburgh casino. The only other pieces of his Majestic Star brand, the one that will operate the Pittsburgh casino, are riverboats that are losing money. His plan for getting a casino built and running by March 2008 seems not only unlikely but out-and-out ridiculous. And he has never, ever overseen the construction on the scope of the Pittsburgh casino. While you’re at it, top that off with these facts: Barden’s plan offered the fewest number of slots machines and, as a result, offered the lowest amount of tax revenues for the city and state.

There is something seriously afoot in this casino business that goes beyond the Penguins leaving or staying. The PGCB has yet to release its reasoning for awarding the slots license to Barden, but you have to hope that when they do the reasons are damn good because Barden did not offer the best plan for Pittsburgh and is not the best person to operate a casino in the city. Besides his spotty track record as a casino operator, his plan for getting this casino built is cause for great concern. How many corners will have to be cut in order to build something as aesthetically and constructionally difficult as a $450 million casino? If he’s dead-set on getting it running by March 2008, how will that effect the aesthetic quality of the construction? Will it transform from space-age dream into modernist nightmare? And what about the safety concerns this accelerated timetable will raise, not only for those working on the project but for the quality of the work?

Ultimately, I don’t think the PGCB awarded Barden the license because he’s black. I think the awarded Barden the license because there wasn’t any controversy around him and his plan the way there was around Harrah’s and Isle of Capri. But when you get right down to it, the reason there wasn’t any controversy was because no one actually believed Barden would win the contest, and no one thought he would win the contest because his plan was obviously the worst of the three. In their haste to do away with all the noise around the Pittsburgh casino, the PCGB rushed to the wrong judgment and inflicted serious damage and danger on Pittsburgh.

And for anyone who believes that the Penguins potentially leaving Pittsburgh is the least of this damage, think again. If the Penguins leave, Pittsburgh will lose vital revenue streams that come from an NHL franchise existing in town. And when the team begins to win championships with their superstars-in-training nucleus of young players, Pittsburgh will lose out on a lot of money and a lot of positive psychological reinforcement. But perhaps more important than that, an entire generation of Pittsburghers will watch a major league sports franchise walk away from their city. And they’ll hold this memory forever. And they’ll draw on this memory when it comes time to decide: should I live and work in Pittsburgh? (Dave Molinari of the Post-Gazette wrote a brilliant column on Dec. 24 addressing this issue.)

When Don Barden was awarded the license to operate a slots casino in Pittsburgh, maybe the PCGB thought they were doing the right thing. Or maybe they thought they were leveling the racial playing field. Or maybe they thought they were alleviating major controversy. Whatever the reason, their short-sightedness, while it might result in some short-term gains (whatever they might be), will ultimately translate into awful, tremendous and possibly cataclysmic long-term losses.

Last Update: 27 December 2006

© 2006 Crazy from the Heat

OUR VIEW, Wednesday, December 27, 2006, Delaware Coast Press

“Detroit-based casino developer Don H. Barden, who won the single license up for grabs in Pittsburgh, wiped away a tear after board members voted, one by one, to approve his project.”

- The News Journal, “Planned Phila. casinos get licenses,” Dec. 21

Could there be a more touching holiday scene? A Midwestern gambling entrepreneur, getting a government-protected regional monopoly on one of those flashy, neon-lit money magnets, a casino? And wiping away a tear, Ebenezer Scrooge-like, perhaps with a $20 bill he promptly throws away, knowing that with the only casino license around for miles in his hand, money is about to rain down on him like a monsoon?

Christmas came early for Don H. Barden. But will it be good tidings or troubles for Pennsylvania, and neighbor-in-gaming Delaware, as both states gear up for a casino tourism tug-of-war?

Hard to tell. At first glance, Delaware seems to knock down many anti-gambling advocates’ arguments against state laws that permit casinos — arguments that have been getting a workout Maryland in recent years, as a Republican governor and his Democratic opponents all toyed with the possibility of turning to gaming to boost the state budget.

Once allowed under the curtain in one spot, the gambling critics argue, slot machines and casinos will prove addictive to policymakers, and they will sprout up all over the state.

That hasn’t happened in Delaware, where Sussex County remains a healthy tourism destination even without a casino, and nearby Dover Downs hasn’t swollen to take over the whole region’s entertainment economy. And there’s no active effort to secure a casino license anywhere in Sussex.

But news stories about Pennsylvania’s decision to grant several new casino licenses last week reminded us of evidence that the slippery-slope arguments against gambling may hold water after all.

Almost a year ago, Delaware’s General Assembly passed laws adding more slot machines to the state’s three casinos, expanding their hours and permitting them to start handing out enticing coupons. The original laws allowing gambling here withheld those privileges for a reason; now, they are being handed out without much discussion.

Delaware’s legislators need to ask themselves: What won’t we do in the name of gaming receipts if Maryland follows Pennsylvania’s lead? If the answer is “nothing,” than we will have lost control of this economic engine, and will be less likely to predict what ill effects it might bring us.

Originally published Wednesday, December 27, 2006

Copyright ©2006 DelmarvaNow. All rights reserved.