COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE ON PUBLIC SAFETY Room 400, City Hall Philadelphia, Pennsylvania Tuesday, February 20, 2024 1:15 p.m. PRESENT: COUNCILMAN CURTIS JONES, JR., CHAIR COUNCILWOMAN QUETCY M. LOZADA, VICE-CHAIR COUNCILWOMAN KENDRA BROOKS COUNCILWOMAN JAMIE GAUTHIER COUNCILMAN JIM HARRITY COUNCILMAN ISAIAH THOMAS COUNCILMAN JEFFREY YOUNG, JR. ALSO PRESENT:
Good afternoon, everyone. We're going to get started. This is a public hearing on the Committee of Public Safety to review Bill No. 240010. Mr. Glass, will you please read the title of the ordinance.
Yes, Mr. Chairman. Bill No. 240010, amending Chapter 9-5900 of The Philadelphia Code, entitled "Prohibition on Certain Gambling Machines and Skills Games," to add additional prohibitions and provide remedies, all under certain terms and conditions.
I will note that we have a quorum of the Public Safety Committee represented by Member Brooks, Member Harrity, Member Gauthier, Member Lozada and myself. So we are officially open for business. Before we get started, I would like to, if you will indulge me, kind of talk about how we got here. In 2011 I'm thinking it was, the Commonwealth of Pennsylvania saw fit to want to explore illegal gambling casinos in the Commonwealth of Pennsylvania. And what I remember at that time, Members, is that we had over two dozen hearings to talk about how they can open, how they should be operated, what type of security should be with that in order to make it safe for communities. I remember going to many of those hearings and painstakingly going through item-by-item, line-by-line on how they should govern their affairs. In 2017 there was an amendment to it, which would allow skilled games to actually operate at rest stops, truck stops in the Commonwealth of Pennsylvania. They had certain provisos that covered parking, the number of parking that was there, the amount of distance between other communities and they went into effect, but there were many in the industry that saw that as a green light to invade Philadelphia County, the City of Philadelphia in neighborhoods. And what we hoped for was hope from the Commonwealth of Pennsylvania on how they should be regulated, how they should be taxed, how they should be licensed, how many calibrations should happen to determine winners and what their payouts should be. We got none of that. So we kicked the can down the road until we passed or we introduced an ordinance to take cities of the first class, Philadelphia in particular, on how we govern these machines. So what I had hoped for in this hearing was to be able to answer certain questions, how many machines are in Philadelphia, where are they located, what is the payout ratio per dollar put in, per receipt for winners, what's the security apparatus involved, how close can they be to public schools. And unfortunately, we will get none of those answers because we don't regulate them. And I take it as a point of somewhat disrespect to the City of Philadelphia -- recognizing Member Thomas has joined us -- that they go where they want, set up where they want and do not tell us where they are. And in addition to this concern, we don't tax them. We have things that we have to fund every year, whether it's affordable housing, whether it's education, whether it's crime and public safety, all of which we have projected over the five-year course of budgeting deficit. So we don't know what we don't know by way of revenues that come into the City of Philadelphia. But I have some encouraging news: Governor Shapiro had captured the interest of this industry and is proposing a 42 percent taxation on these machines and we talk to members, our colleagues, at the State level and the Senate and in the House about how cities of the first class can determine these machines' locations, hours of operation. There is a terrain research -- what is it, Mr. Glass?
Risk terrain management, which is one of the items in the public Blueprint for a Safer Philadelphia. And what it talks about is not the who, who committed the crime, but where the crime was committed. I will note that we had a shooting involving two officers and a suspect, suspect passed away. I believe it was either in your District or in Member Young's District. And then about three days later we had in my District a shooting that resulted in a murder in a corner store again. What do these two instances have in common? Both of them had skills games being operated. What we tend to find is that people that do other things occupy these locations and in effect pay rent. When asked why are you there, what reason do you have, are you buying a loaf of bread? No, I'm playing the machines. And that is a form of allowing them to not be trespassing. So these are questions that we need answers to. As a municipality, we are not against commerce and business. We are for it being regulated correctly, and this is what this hearing is about today. As we move these possibilities forward -- and one other item. Many people ask, well, what happens if the State comes in and introduces legislation that could potentially supersede what we do here in City Council? Well, I will clap slowly for them because it's about damn time. And we've been kicking the can down the road too long and almost to a degree that these operators believe that they don't have to answer to the City of Philadelphia. Well, that ends today. I would like to offer an opportunity for any of the members of this Committee to make a statement. (No response.)
Seeing none, thank you for your attendance. Mr. Glass, who do we have for the first panel to testify.
Mr. Chairman, our first panel is Philadelphia Police Commissioner Kevin Bethel and Deputy Commissioner Fran Healy. (Witnesses approached Witness table.)
Welcome, gentlemen. Both of you are not new to this process. But in your official capacity, Commissioner, welcome. COMMISSIONER BETHEL: Good afternoon.
Please begin. Proceed with your testimony. DEPUTY COMMISSIONER HEALY: I'll just do the introductions. My name is Deputy Commissioner Fran Healy. I'm here with obviously Commissioner Bethel. Our testimony is actually on the record already in support of this bill, including the amendments thereto. The Commissioner wanted to speak today and make comments as to the bill personally for his own personal beliefs. But our testimony is on the record and has already been submitted. With that, I introduce Commissioner Bethel.
That is a wise use of your rank. COMMISSIONER BETHEL: Well, you know, it's always good having as your Chief of Staff who's an attorney and who is always here. But I just wanted to come, my comments are brief. But I wanted to come first and foremost to thank the Committee for their work in bringing forth a bill that helps us as we go about our work. As you know, my charge under the Mayor is really to address the quality-of-life issues that impact our community, the nuisance locations that impact our community and the like, right. So part of my purpose being here today is to stand along with Fran to make sure it's understood how much I appreciate the Committee willing to lean into this space. For somebody who's been in law enforcement for 38 years, I've watched the devastating impact that we've had, whether it be alcohol introduced into our communities or the stop-and-gos, whether it be the other gambling machines that we had and that are slot machines that we would see in our space. We also have looked at the drugs that have come into our community, particularly when we have the corner stores as you indicated have been a gathering spot and often times have led to a significant level of violence in those locations. And so, we can no 25 longer sit here and allow -- we can talk about drugs being entered into my community as a kid and we understand the addiction that it has brought with it. We have seen the alcohol that's come into our marginalized communities and we've seen the alcoholism that has come with that. So we introduced gambling machines into our community and don't expect that we're going to have issues with gambling and addiction to that as well. And so, those things that are happening in our community are significant. The violence that we see around our stores when we have these gatherings, as you know particularly in some of our more violent pockets and then just adding another ingredient to that space has not helped our work. And I'm so proud as I joined the organization, back in the organization, to see the work that Commissioner Healy and our Nuisance Task Force working in collaboration with many of the individuals here to really, really start to focus on those nuisance locations and focus on those things that impact our community each and every day. And so, I just wanted to come here again to thank the Committee for your work to lean forward, to get ahead of the things that are happening and not just waiting for the response and see the downstream. You've seen it anecdotally, and we'll start to look at the data to see how things are going forward. But I just wanted to bring that information forward and say that I'm here, and I want the community to know we're taking these matters seriously. Those things that impact those communities, the Mayor has very clearly indicated the quality-of-life issues are not acceptable and we're going to be doing everything possible as my take over the organization to make sure we listen to the community and listen to the issues that they are raising on a daily basis.
First of all, thank you. And you've leaned in both when you got sworn and announced your new position in Kensington, in the heart of some of the most challenging neighborhoods in Philadelphia. One of the things with the terrain modeling we've noted, and you can see parts of it in the 52nd Block study where there is a propensity for increased violence, you will find stores that have these types of machines operating in them. And what you find is not one thing. It's a preponderance of a lot of things. One, when you sell loosie cigarettes, B, when you sell liquor by the drink, C, when you have these kinds of gambling machines, it almost creates a watering hole for prey. And for them to not have to go far because eventually people will come to them. And we are concerned as to, A, keep track of that through the Nuisance Business Task Force. If someone is operating a business and one of these things happens but if in addition to that, violence, robbery, firearms, gun violence, we want to know and we want to kind of move in on that to improve the quality of life in our neighborhoods. We introduced a bill -- good God, none of you were here, I'm getting old -- where we asked for merchants to actually -- it was the Good Samaritan piece, Josh, where we wanted store owners to take a greater responsibility about what happened in and around their stores to protect their customers. That was met with a lot of opposition, a lot of opposition. And I kind of understand it. It is not their job to want to jump into the fray to make sure that -- Member O'Rourke, how are you, sir. Welcome.
That we didn't want to jump in -- and, Member Young, I see you.
To jump into the midst of being police officers, but that exchange of information via conversations with the police or with cameras that were affixed, a lot of people didn't want to do it because they were afraid. When we talked to -- we were at the Governor's Budget Address, Commissioner, and members from outside of Philadelphia that were State Reps and Senators said, well, quite frankly, what is Philly going to do for Philly, what are we going to step up and do to protect our own neighborhoods. And so, in a way this answers in part that question. So tell me how is the Nuisance Business Task Force tracking these kinds of activities. I think it was a surprise to me when I attended your meeting how specific you guys are organized. Can you share that with the members of this Committee? DEPUTY COMMISSIONER HEALY: If I may. As you know in November of this past year, we pushed forth out from the Nuisance Business Unit that we have a tracker. 9-4400 of the Code is very specific as to first, second, third letters of notification as well as the critical nuisances. So we need to come up with a system to better track that so we can help assist the captains in the field. So that's in play now. Two weeks ago understanding that this is much bigger, we need to put more things into this tracker so we can track them better. We've had a meeting maybe two or three weeks ago with the OIT folks about expanding the scope of that tracker to put more information into it and track it more effectively, so we can basically CompStat the data. We can put that data up on a spreadsheet -- or not a spreadsheet, on a screen so we can actually see what's happening in each location. Some of the other things we want to track is not just these machines, but also I think it's 9-206 -- don't quote me on the quote -- it's those businesses doing repairs on City streets. A lot of businesses, specifically in the 12th District and some other districts and the 26th, that's a big problem. So we're looking to make sure that we track all this information into this tracker to make sure that, in fact, we are keeping track of it, but obviously that we're taking the appropriate action and coordinating with the captain. We do have a centralized unit, but that does not mean we'll just dump it on the centralized unit. We're there to assist the captains to do what they need to do, so we're working in tandem to make sure we use all our energies with a sort of synergy so we're actually doing more with less people, which we all have to do. But the tracker will be revised and it's being revised now. We asked for them to include all the issues that the Nuisance Enforcement Unit actually touches upon to make sure all those elements are included into the tracker, not just 9-4400. That's in the works as of about three weeks ago. COMMISSIONER BETHEL: And if I could add to that. Even today I met with our Mapping Team after our crime briefing. We're able to start mapping those locations, so we're starting to put those on the map, which will be very important for us because during our crime briefing where we're working through the process, our commanders will be able to pull those locations up and see exactly the kind of activity we're seeing around those locations which will help us as we move forward with the data.
Yeah, the place is as important as who commits the crime. Whether we talk about mass transit or other places, we need to know where it's happening so that we can deploy resources to prevent it. So I appreciate us all working together to try to figure this out. Public safety looks different in different neighborhoods and in different businesses, but there's a recurring theme that statistics tend not to lie. And where we start to see this preponderance of activity, we want to allocate the right resources to prevent it. Any questions?
Thank you so much for your testimony, Commissioner Bethel. I have a couple of questions: One, do we have a sense of how many businesses have these skills games? I know you said we're creating a map, but do we have sort of a global sense? COMMISSIONER BETHEL: No, we do not have that at this point.
Okay. From an implementation standpoint -- and I do support this legislation. We have a ton of these businesses. But from an implementation standpoint, do we have a method of sort of proactively notifying these businesses in the event that this law goes through, and will we do that? DEPUTY COMMISSIONER HEALY: The issue right now as of the last vote on this, it was pocket-vetoed, so this issue is still in a little bit of a limbo. But what we are doing with these businesses in the interim, and thanks to City Council for the 9-44 amendments that you made forth, they give us a lot more tools to play with. And probably the most important one is the critical nuisance. That means if a violent crime happens on location, we can actually take immediate action to move on the license. In the course of that -- now, we understand some places are legitimate places, just a bad thing happened at a good place. So what we've really put in place in the Nuisance Unit is we'll do a preliminary investigation on every incident that has a -- a business that meets the definition of serious shooting, homicide, rape or aggravated assault. And in the course of that, if we identify -- not only if we identify the machines that are in the location, but also we'll notify if they are a stop-and-go that doesn't have enough seats. We're going to use all that information as best we can to go against the license. So we'll give them notification that as part of the resolution for the critical nuisance that they have to enter an abatement plan. Part of that abatement plan what we started doing is requiring them to remove the machines out of the place, so that will be part of the abatement plan. Now, they have to do that voluntarily at this point because right now they're technically not illegal until we vote on this bill.
I think I'm asking something different. If we're mapping or tracking businesses that have these skills games, when -- DEPUTY COMMISSIONER HEALY: Well, let me be clear. We're not tracking -- there's no way for us to track these machines where they're located. They're in everywhere. They've proliferated not just in Philadelphia but across the state due to the illegal ambiguity since 2016. They're everywhere. COMMISSIONER BETHEL: My statement was to nuisance properties overall, not specific to the gaming at this point. Just to the nuisance properties that we identified.
I understand. I think what I'm putting out there is if this legislation is to pass, is there a way or should we proactively try to notify businesses that this law is passed, this is now illegal so that they can take action on their own as opposed to waiting until something happens and having to come up with an abatement plan? COMMISSIONER BETHEL: Absolutely. We 100 percent agree that there should be a period of awareness. Many of the business people have no idea that that is an issue for them. And so, I would definitely believe that there should be some kind of imperative time where they would be notified before the law is officially enacted.
Thank you. And last thing I wanted to say is I wholeheartedly support the tracker being updated with these sort of nuisance repair shops that are doing repairs on the street. We have a lot of those in my District. COMMISSIONER BETHEL: Yeah. And I think, Councilwoman, that's just a -- definitely. I mean, the fact that people take that as -- again, it's an area where people think the community doesn't care until you have to watch the oil being washed down your street and you're stepping in oil because somebody's dropped oil all over the street or just left those items on the highway and kept going, so 100 percent. So we're going to really lean into all of those issues, that as well, because we think it's a continuum, just a gradual continuum of layers of things that are happening in our community that we're not taking action on. And those are the things that are impacting these communities on a daily basis. So some people that say, oh, it's just a great thing. They don't realize the aftermath of what happens when somebody drops 5 gallons of oil on the street and think it's supposed to wash away on its own. Thank you, Mr. Chair.
Before I call on my colleague for the next question, let me just mention that I think that part of the work that we need to also be doing is communicating with our Commerce Department who managed some of the commercial corridors in different neighborhoods because they are on the front line and they see every day how some of these establishments are detrimental to some of our commercial corridors, not just our neighborhoods, right, not just our everyday corner stores and the residents, but to commercial corridors. And so, I think that if we're going to start to gather information about where some of these establishments are, working with our Commerce Department who manage some of these commercial corridors where many of these businesses pop up overnight sometimes, some as quickly as within a two-week period, right, we need to make sure that they are a part of this process, not only so that if this becomes law but so that they can help us gather some of the information around where they are. COMMISSIONER BETHEL: Yes, ma'am.
Thank you. Can you hear me? COMMISSIONER BETHEL: Yes, sir. DEPUTY COMMISSIONER HEALY: Yes, sir.
Just a couple of questions. I know you're making a database now. Are there any numbers so far on robberies outside these places because in my neighborhood it happens quite often but isn't always reported? So I know of one instance where a neighbor of mines, a senior was in a store. She put a lot of money in there and finally hit the machine. They paid her. She got about a half a block away and the young guys robbed her. So I would like to see any kind of numbers that we have on that kind of stuff besides just the outright violent. What kind of theft is going on around that area that may not necessarily be getting put to that business but is related to that business? Did you get that? DEPUTY COMMISSIONER HEALY: The answer, we'll do the best we can. The motive of the robbery is a little hard for us from a statistical perspective to identify, but it's not saying it's impossible. We'll do our best to try to track the motives and see if to track whether or not we can find patterns or trends specifically associated with these machines, per se. Because a lot of times if you notice, they're in the heart of some other crime and disorder so it's very hard --
Oh, absolutely. DEPUTY COMMISSIONER HEALY: -- to distinguish that was really the driver. But I think as was mentioned before, it's a combination of the above. So if we start whittling it down, we can hopefully make an impact. But we'll do the best we can to try to figure that out with our data people.
Okay. Thank you. That's all I have. DEPUTY COMMISSIONER HEALY: Can I just make one comment to Councilmember Lozada? You mentioned Commerce. Just so you're aware, we do meet regularly with the Nuisance Task Force that's run by actually the Mayor's Office now through Kristin Bray. Commerce is always a part of that meeting so they're always included in everything that we're discussing as we move forward.
(Inaudible) -- UNIDENTIFIED SPEAKER: We really can't hear you.
Oh, you can't hear me. All right. Can you hear me now? Hello. Okay. Yeah, I have questions about enforcement. How will it be enforced? I know you talked about tracking and identifying. But how will we -- after Councilmember Gauthier talked about notification, legislation passed, what does enforcement look like? And then also, will there be penalties for users for machines once this enforcement happens in a nuisance property? DEPUTY COMMISSIONER HEALY: When it comes to the nuisance in my written testimony I was very honest. We have to do an undercover investigation to see whether or not there's a payout. It's not just the mere presence of the machines. So it will take some work. Okay. I'm not going to lie. Our Vice Unit is best-suited for these types of investigations. We have to do the planning, the execution, the deconfliction. But we're looking to prioritize only those places that are really driving our problems so we can focus our resources and have the most impact. That's the best that I see that we're going to be able to enforce. But when we do enforce it and hold these people accountable, we don't actually seize the machines. Under the ordinance, they get I believe a $2,000 fine for every machine. So that's a substantial fine once we do identify the information. But it will be a challenge. I'm not going to lie. It will be a challenge to do the enforcement on a lot of the areas because they're going to know who's from the neighborhood and who's not in the neighborhood coming in and trying to do an undercover investigation. But we'll work with other partners. We have state and other partners that we can tap into for resources to help us.
Okay. I'm trying to process this. So someone -- you would send an undercover, so to say, to use a machine and you can't do anything until there's a payout. So you can't until they take the slip. So when they take the slip, they have violated the law and then the undercover would have to -- DEPUTY COMMISSIONER HEALY: Basically that's correct. That's the pur -- the machine itself is not illegal. It's the payout of them.
It's the payout of the machine. DEPUTY COMMISSIONER HEALY: So for us we have to see that or witness it or have some type of video to prove it.
Okay. COMMISSIONER BETHEL: And we have a Vice team that does that work now and had done that in the past. It's just building that out to incorporate that into the work that they're doing now. If we have to build out the capacity to meet that demand, then we will.
Okay. And that also includes -- what's the other thing we talked about -- liquor-by-the-drink, is that the same way that enforcement is happening? Some of the establishments may have the gambling machines as well as you can go buy a shot behind the bar? COMMISSIONER BETHEL: Yes.
I mean, behind the counter, the beer store or whatever. So that has to be enforced, that's the same level of enforcement for that as well? You have to send someone, they have to make the purchase, identify it's illegal and then you guys are able to enforce? DEPUTY COMMISSIONER HEALY: I'm not sure I heard you. Are you talking about other gaming machines, if they're illegal?
I'm talking about with the Nuisance Task Force as a whole, like other violations may occur in some of these establishments. DEPUTY COMMISSIONER HEALY: I'm sorry. I didn't hear you.
Is it the same process across the board so you can hit somebody for multiple violations related to the Nuisance Task Force? DEPUTY COMMISSIONER HEALY: Yes. The nuisance -- the way that 9-4400 was amended, if certain violations occur, we use that as the basis for moving into the license. It can be anything, a combination of public disorderly conduct, whatever the case may be. As long as there's a nexus to the business, that's called a chronic nuisance. We have three of those within a year, then we send the business a notice of intent to cease. And then they have a responsibility to reach out to us to try to resolve the problem. If they don't resolve the problem within so many days, then we move forward with L&I against the license. With the critical nuisance, if something serious happens, we don't need three strikes. Basically we can move with that one incident and individuals need to come out and work with us to come up with an abatement plan. That's why we do the preliminary investigation upfront. Like I said and respectfully, Macy's. Macy's technically fell within the definition of a critical nuisance, but we all know it's not a critical nuisance. But how do I distinguish Macy's from some other store. So we wanted to make sure we put a light -- and actually this is -- we met after the Macy's incident to see how and make sure we'd be fair and consistent on how we enforce across the City. And that's why we now do the preliminary investigation once that incident happens. And then we're looking to see if there's anything that the business owner is doing or not doing that helped facilitate or cause that type of behavior to happen on their location. And if that's the case, then we're moving forward with an intent to cease.
Thank you, Vice-Chair Lozada. Who's next? Member Young.
Thank you, Mr. Chair. Good afternoon, gentlemen. Another follow-up question on enforcement: If this bill were to pass and become law, do you feel this is an enforcement issue for the police or more for Licenses & Inspections to enforce? DEPUTY COMMISSIONER HEALY: It can be by both. I mean, and that's the important thing about the bill the way it's drafted. We all have limited resources. When we can come together, we can actually work as a team. L&I is part of the Nuisance Task -- or not Task Force but Nuisance Committee with the City. So we work in tandem in making sure the resources -- so we often every month by policy we'll do what's called a walkaround, I don't know if that's the right word for it, but we'll identify corridors that have nuisance businesses or properties and even some that don't in the mix and we'll go up and down, and that's where Inspector Ritchie from our Nuisance Unit works with L&I, Health, and everybody will go up and down. Basically it's kind of a warning thing making sure everybody is on the same page doing the right thing. But those people that aren't in compliance, it's an opportunity for us -- they can be cited by L&I, Health. We use that as also the community sees us out there as a whole as a team working together, so we work hand-in-hand with L&I all the time and they're a great partner.
I'm sorry. How successful are you all when you go out with L&I and you actually are able to talk to some of these people, right, because some of the experiences that I have heard is that when the inspector or when the police department go into these establishments, the individual is not able to communicate with you because of a language barrier? How successful are you all in communicating with them? How often have you all found that when you walk into these establishments they're operating with a grocery store license as opposed to a gaming type of license, if there's even one, right, because I've asked before what type of license is an appropriate license for some of these establishments who don't have food, who their food is a cup of soup that you warm up in a microwave or there are no household products that they're offering so it's not a real grocery store. It's actually a gaming store, but they're operating off a grocery store license which does not allow them to be open hours a day, right, in an 80 percent residential neighborhood? How successful are you in addressing those issues when you're going out in the community now? DEPUTY COMMISSIONER HEALY: It's a little double prong there. The issue -- let me just step back and talk about the 9-4400 and the success we have with that. When the nuisance happens around locations, we have to give a first letter to the business owner informing them that there's a problem. We've been incredibly successful with that first letter going out saying, business owner, you got a problem, you need to fix it, you could lose your license. And that was really the driving factor why we created the tracker, because we were so successful with those first letters but we had no 2 way to track it. I mean, the only thing we were tracking was the negative outcomes when something had to be ceased. And actually a lot of businesses who were in compliance, a lot of them are either they're not directly owned or they're not operated by the owner or they're operated by agents or managers and they're not aware of what's going on, so that's been incredibly successful. Now, when you're talking about the businesses that are operating basically as a sham is what you're talking about, it's using it for other purposes, when it comes to the liquor license stuff with the 30 chairs, the requirement for the 30 chairs, that's your whole stop-and-go issue. They're supposed to have 30 chairs on those locations. And if not, it's a violation of state law. So we're looking -- when we do these walkabouts, that's some of the things we're picking up. We walk in, we gather that information. LCB and the Pennsylvania Control Enforcement are with us when we do these things, so we work in tandem. Now, for your specific issue of a grocery store is really not a grocery store, we would look into that. And if we got the complaint, we would look into that one specifically because technically what are they doing wrong if they're just not selling anything. They have the license but they're not selling anything. We know they're up to something but what is that. So we would look into that further as a team with L&I, Health Department, especially if they have a health license. So we target -- we don't target, that's not an appropriate word. But we identify and look into those places when we get information from your offices or anybody's office. So if you have a specific location, let me know and we'll put it on our list and have somebody look into it immediately. COMMISSIONER BETHEL: And I just want to emphasize, Fran has obviously been leading that and he's been the expert and I'm just kind of just coming back in this space, but I do want to note and want the Committee to know that as we move forward, we're going to be much more seeped into this space.
We're going to start to get the synergy around this work because we know this is impacting the community and these are the calls that are coming into your office on a daily basis. And so, we know we're going to be working across departmental, all of the agencies to make sure we're responding. They've done a great job doing that now, but we're really going to elevate this work as we build our new community partnership bureau of our work that will nestle under that space where we're going to bring all of that energy together to make sure we're moving effectively to address these issues.
Thank you, Mr. Chair. So I understand from the testimony that because of the Commonwealth Court ruling that says that these machines are not illegal, we're kind of taking control of our own destiny and we've developed this system where we would send in these undercover cops and only be able to really enforce when there's a payout. Am I understanding that correctly? DEPUTY COMMISSIONER HEALY: That's correct.
Okay. I think it's good that we're taking charge in that way while we're hoping for an appeal, but I have a question around capacity because it sounds like intense work. So I wanted to ask how many people do we have in the Vice Unit that would be devoted to this type of work and how many people in Neighborhood Services would be able to also augment that work knowing that the Neighborhood Service officers do a ton of stuff like remove abandoned autos, right, that we also need them to do. So what's our current capacity? And if it's not sufficient, how do we need to grow our capacity to be able to implement this effectively? COMMISSIONER BETHEL: So that's a great question, Councilwoman. Right now without getting into the specific staffing issues, we know that we're down in staffing across the board. But my position as I've taken on this position, we have a multi-prong organization now. There's no 11 longer one officer just doing one thing.
Okay. COMMISSIONER BETHEL: So the way we're going to be addressing these issues, so I'll take you into the 35th District and the captain aide is doing everything, nuisance houses, nuisance corners, all of that. And so, we see the path moving forward is not just this entity Vice Unit is the only one able to do that kind of activity. We're going to have officers that work within those areas to be able to do that work as well. There's nothing precluding them from a policy perspective to do that. And as our staffing has attrited, we're looking at Kevin Bethel may be a three-faceted entity now. He does everything, but not just doing the police work, but he is doing quality-of-life issues. He or she is doing those other things that we need to get done. I will not allow our staffing issues to be the impediment for us doing the work. We have to get back doing the work of policing and doing the work of the community they ask us to do. And so, we're going to use a multitude of ways to do that. Yes, Vice is a component of that, but they can train other people to do Vice work. So part of what we're doing now as we understand that much of the special unit work that we did in special units are now going to be trained to those men and women in the field so they can do those operations as well. You don't have to have Neighborhood Services most recently to have cars towed out of a neighborhood for abandoned auto. They can teach other officers, and they've done that most recently. And so, we see that as a vast number of opportunities to train the men and women in the field to do the quality-of-life and nuisance work as well as doing their 911 response work.
And could this also be something that the civilian officers that we're hiring could do? COMMISSIONER BETHEL: I don't know this level of work. I -- DEPUTY COMMISSIONER HEALY: Are you referencing the public safety enforcement officers?
Yes. Thank you. DEPUTY COMMISSIONER HEALY: They've been a great help. There's some barriers, legal barriers. But for the most part, they're an incredible help for us because what they're doing is we have a very large backlog that we've whittled down quite a bit, but those officers are actually going out to help identify those cars. So they're working with the Abandoned Vehicle Unit to help get those cars off the street quickly so they are actually --
I mean, not just cars. I love that we're removing more abandoned autos. But I mean this bill 23 specifically. Could the public safety officers, would they also be able to share in this work to grow our capacity? DEPUTY COMMISSIONER HEALY: I think that probably exceeds the scope of their job. COMMISSIONER BETHEL: I would not put them in harm's way. I mean, there's a possibility -- just like any time you're taking a policing type interaction, even something as small as being in a gaming shop going undercover doing a -- could lead to some type of violent episode. So I would say sitting here today without doing a full assessment, I would say I would not put them in that kind of harm's way because of the potential harm that could come to them and they're not armed.
On my way in today, stopped at Bryn Mawr and Wynnefield at a gas station. Went in, paid for my gas. There were machines in full operation. 7 Not everybody was at every -- 8 there's a photo. And I thought of 9 Atlantic City without a payout for 10 the City. I thought of Atlantic 11 City without an escort for a winner to go to their car. I thought of Atlantic City without knowing what the ratio -- if you buy bologna at the Acme, there's weights and measures that come out to make sure that the weight that you're paying for is accurate. We don't do any of that for this industry, and I just think the time has come. I don't want to see an Eliot Ness-style approach to this. I like the notifications, the letters. And then the license issue without coming in and we're confiscating this and that, we don't need that. What we need is a firm hand to let them know that this isn't worth it. And that if the industry wants to come into compliance, then let's figure it out. Let's figure out where they're supposed to be, where they're not supposed to operate. The hours of operation might be included. I was just given that instruction by one of the people to testify today. It's a helpful kind of addition. Member Driscoll wants to make VFWs a safe place for these machines. And I think anywhere, whether the traditional bar and tavern where you're checking for people's ID anyway to make sure that they're legally able to drink is a more secured environment than the kids on their way to school, got their lunch money and say, I'm going to get lucky today and put my lunch money in this machine and go hungry the rest of the day. So we need to put our arms around this. And I'm so thankful to have partners in the police force and the task force to assist us in figuring it out. So thank you very much. COMMISSIONER BETHEL: Thank you.
If there are no other questions for this panel, thank you for your testimony. COMMISSIONER BETHEL: Thank you. DEPUTY COMMISSIONER HEALY: Thank you.
Mr. Chairman, our next witness is State Representative Amen Brown. (Witness approached Witness table.)
Representative, welcome. How are you, sir? STATE REPRESENTATIVE BROWN: Good. How y'all doing?
State your name for the record and please begin your testimony. STATE REPRESENTATIVE BROWN: I am State Representative Amen Brown. I represent the 10th Legislative District of Pennsylvania, which is Logan Square in West Philadelphia. So first and foremost, I want to say thank you guys for addressing this quality- of-life issue. This is something that my office gets several calls and complaints about. So thank you to all of the sponsors. I know we have a lot of issues along 52nd Street which I share with Councilmember Gauthier, and this is a real problem. It hurts me that seniors used to be able to go to their corner store and purchase a loaf of bread or use the ATM machine to pay their rent or so forth and so on. But now, due to these machines their lives are impacted. And that turns into late rent payments because the closest ATM is not in reach anymore because you have several individuals who stand in these stores surveiling what goes on, on these machines in ski masks and so forth just waiting for their next victim. They're waiting for someone to hit. A lot of the crime that might be being committed is not getting reported because they might be robbing their opposition, as they call them. But all this turns into problems in each and every community in Philadelphia and across the Commonwealth. About a year and a half ago, almost two years ago I met with the skills games individuals. I attended an informative session that they had for Statehouse members in Harrisburg. And I listened to everything that they said but also heard what they didn't say. And they're in it for profit. As you just mentioned, this is not something that's being taxed for the state or the City. And these things came about I believe in the beginning of COVID when they hit our City the hardest. And during the height of all the federal or state assistance to our constituents, the money went into the pockets of the owners of these machines. And I get it. For the business owners who are present today who think that these machines are helping you, they're not. They draw in nothing but bad things, and they're taking the little bit that our constituents have, whether it's $75 dollars or $5. They're putting it into this machine and they're losing it. And then they have to come to our offices for assistance because now they're late on their rent or they're being evicted or they have a shut-off notice or their utilities are already being shut off because their last whatever went into this machine and they were hoping that they hit big, and that's not what's happening.
Question: There's a store, 56th and Arch I guess -- STATE REPRESENTATIVE BROWN: Yes. You have 56th and Arch, 56th and Market.
-- that is one of the hot spots that I know of where things happen, homicides, robberies. Is there a gambling machine in there? STATE REPRESENTATIVE BROWN: Absolutely.
I didn't know that, but it doesn't surprise me because it creates a water hole kind of mentality. STATE REPRESENTATIVE BROWN: Yes.
And can you tell us what's happening at the state level on these machines? STATE REPRESENTATIVE BROWN: So our Governor Josh Shapiro, he just proposed -- well, he charged the legislature to come up with some kind of agreement and get something done in the Statehouse for the skill games to tax this industry because we currently are not. That's what's we're doing right now. I know there's members on both sides of it. There's those who oppose and there's those who support. And hopefully within the next coming months, we come to some kind of agreement.
One of the things is to be able to provide that incentive to do something because sometimes good ideas bubble up from local to the national. Every now and then we come up with a good idea and whether it was evictions and things like that became a national model, and I think this is not just a Philly problem. It is a Commonwealth problem and it's a regional problem that needs to be addressed. And we're going to God willing be able to at least set some parameters around it. So thank you very much, Representative. Any other questions for him? (No response.)
Seeing none, thank you for your testimony. STATE REPRESENTATIVE BROWN: Thank you.
Our first individual for public comment will be Andy Toy from the PACDC. (Witness approached Witness table.)
Good afternoon, Mr. Toy. Please state your name for the record and begin your testimony.
Sure. I have some written comments and you should have them. Good afternoon, Chairman Jones, Vice-Chair Lozada and City Council Public Safety Committee members. My name is Andy Toy, and I'm the Policy Director for the Philadelphia Association of Community Development Corporation better known as PACDC. Thank you for the opportunity to testify before the Public Safety Committee regarding Bill No. 240010 that seeks to address the growing problem of completely unregulated games that serve as a means of gambling in commercial corridors across our city, especially in lower income neighborhoods. What we at PACDC and our members who manage the commercial corridors in the City have been observing is that the proliferation of these machines, whether you call them games of chance or skill, have become an attractive nuisance in many neighborhoods. Of our Commercial Corridor Managers Poll, not one supports the allowance of these unregulated devices and many have cited negative impacts on their corridors overall. Some places of business only has one, but others have many machines that create a feeling like a mini casino but totally unregulated. In addition, because of the amounts of cash at these locations and people hanging out for hours as we've heard, they can become hostile and potentially unsafe places for others in the community. Finally, for some residents in our communities these games may represent a chance to make money. We know that without the payouts, they're just like regular arcade games and we don't see people playing arcade games for hours and days on end. Some would call these "games of skill" predatory. In the long run, most every player loses or the games wouldn't exist. PACDC supports Bill No. 1 240010 that prohibits these devices unless specifically licensed by the Commonwealth of the Pennsylvania. Thank you.
Mr. Toy, 6 how many organizations do you 7 represent and from what part of the 8 City are they? 9
How many or PC -- 10 we have 60 CDCs that we represent 11 plus 100 associate members. 12
And do 13 they run the breadth of the City of 14 Philadelphia? 15
Yes, we have some 22 in the Lower Northeast part of the 23 City as well. 24
Everywhere, that's my point, that this is not a select sampling or one geographic neighborhood with a socioeconomic income level. It's everywhere. And so, this is a citywide problem -- or issue, issue. So any questions?
Thank you for your testimony today. You say you represent 60 CDCs. Of those CDCs, have you all started working together to try to figure out where these establishments are along your commercial corridors?
Can you repeat that? How many of them are in commercial corridors, is that --
I'm asking you have the CDCs that you represent along the various commercial corridors, have you all started to collect the information regarding where these particular establishments are?
So anecdotally we've been hearing from some of them and we've asked if there are issues. Many of the CDCs do work on commercial corridors across the City. Some of them only do housing, but many of them or I would say most of them have a commercial corridor in their district, and we didn't hear anything positive. We know some businesses make some money doing it, and our goal would be to make sure that if somebody is struggling that we could help, our corridor managers could help them, but not necessarily this way. So if there's a way that we can help without creating a situation that can be a nuisance, then we would try that. And the City has resources to help as well. We've been -- we try to link people up to various things like facade improvements and things like that. So those are the kinds of businesses that we want to help, but we feel that this is anecdotal. And if you have enough anecdotes, it becomes data. We haven't put that data together yet, but we believe that there is enough evidence that these are a problem.
Mr. Chairman, our next speaker is Felix Santana. (No response.)
Welcome. Please come to the witness stand. (No response.)
Ms. Rodriguez, welcome. Thank you for your patience. (Witness approached Witness table.)
Yes. My name is Andrea Rodriguez. I am in business 32 years. I have a crime in 1993. It's not much in the store. I have a lot of robbery before the machine is not in the store, you know. So for me don't -- because you have machine in the store isn't a lot of robbery. Robbery all the time. Yeah, that's what I see in 32 years. I was in business, so the community they feel fine, you know, when sometimes they come to play in the store. I don't see any violence, you know, in my community. But I never hear one crime, and that help a lot to pay bills, you know, and help the store to a little more extra help to do something, pay the kids' college, help allow with something, you know, like you need. So in COVID-19, we are open, you know, 12 hours. A lot of community guys and people go to play on the machine and they feel fine because all the time they be in the house to do nothing. I don't see any problem with that, just see like people can get extra money to do something, you know.
Some weeks we can make $800. Some weeks we don't make nothing, you know. Some weeks we can make $200, $300. It's not a lot, like it's a lot of money, you know. That's my experience, you know.
Okay. All right. And you have no 8 problems in and around your store?
No, I never have problem with the neighborhood. And sometimes they say -- they feel happy because they don't have to go too far to play, you know. Sometimes they say I have some money to play and when it's close to me, it's better. You know, that's what they say.
I never see kids play machine, you know. I never see that around my neighborhood.
You know, all age. Young, you know, sometimes 30, 40, whatever.
Given the location of your store is being very close to a public housing facility, have you seen any increases not necessarily in robberies but in drug dealing around your store?
Has the increased foot traffic in your store led to other quality-of-life issues around your store, any loitering issues and things like that?
And what's the proximity to your skilled machines to the ATM in your store?
How many feet away is your skilled machine from your ATM?
Yeah. Like, how far -- what's the distance between your closest machine to the ATM?
Thank you, Mr. Chair. First, I wanted to thank you for coming to talk to us and for what I'm sure is a vital service that you're providing to your community through your store. I wanted to ask you if this legislation were to go through, are there other ways that you can think of that the City can help your business to succeed? And I also wanted to ask you if you had any thoughts around what you wanted to see from the City on public safety more broadly?
I need somebody to ask me in Spanish that question. It's too long. I'm sorry. You know, my English. I learned my English outside. I never go to the school, so you got to do it a little bit short, the question.
Oh, I'm so sorry. First question: If this bill moves through and we make it so you're not really operating the machines, are there other ways that the City can help your business in terms of the money that you would be losing?
Lord, I got 32 years in business. I never receive any help while I'm here, any help from the City. I'm sorry, you know.
Do you know of other programs that the City has available to be able to support small businesses like yours? Have you ever been approached by someone that is related or that works with a City department to be able to provide you or small businesses like you with programs or resources that could help build your business?
Yes. If the City wants to help a little business, it's a lot of ways to do it but we got to find out and they got to find out how we can do it, you know.
There are a lot of programs that the City has that can be resourceful to small businesses like yours. And so, I think it's important one of the things as a legislative body we need to work on is to better connect small businesses that are not along commercial corridors that are not managed by some of these CDCs or some of these Commerce contracts to be able to connect small businesses to some of the resources that we have available to help their businesses grow, right. This doesn't have to be the only way, right. But I think we need to take a different approach at how we connect businesses with business support services that we have available to them. And so, I'd like us to -- I will make an effort out of my office to be able to do that. But I think that as a legislative body we should also be looking at that.
Yes. Sometimes the City get it confused because they think a little corner store make a lot of money. So sometimes we have to ask for money to pay something else in the month, you know. And so, when you work legally, any kind of business, little like that and you have a lot of things to pay, all the bills, everything is too high. So it's not easy, you know, a little business to keep open.
No, no. 13 Are you a part of an association of a collective of businesses?
She's a part of the Philadelphia Grocers Association.
I'd love to take you up, Member Lozada, to meet with them to talk about their particular needs, to bring the Commerce Department with us to see how we can help. We would do that.
Yes, because a lot of -- a lot of us, the store owner, we don't know. I don't even know if they got any help or not, you know.
I look forward to starting that dialogue about storefront rebates, sign rebates, micro loans, things that we can do. So we're not always taking away. We're giving too. Thank you.
Thank you for your patience, sir. Are you here? (Witness approached witness table.)
Have a seat. State your name for the record and please begin your testimony.
My name is Ari Marchand. I have a little company called Xtreme Skill Games. We do some business in Philadelphia, registered in Pennsylvania, paying taxes in Philadelphia, having insurance, Workmen's Comp. and doing everything by the books. I hope that the panel in front of me has an open mind. I'm not sure if you have an open mind, but I would love to believe that you have an open mind. The truth is we have a patient, the skill game, which is sick. The patient is sick. There is a very easy way to get the patient healthy and productive. The easiest way is just to kill it, just to kill it and, you know, you don't have to administrate anything and so forth. Right now Philadelphia is known around the country as the Wild West of the Skill Game. It's absolutely atrocity what's happening in Philadelphia. And I have a list of suggestions how to solve it. Part of my solution is to generate between $2 million to $3 million a month to the City, to the City, and can be done as long as everything is done under law and order. So I would like to bring a few things in no particular order. I heard one of you gentleman calling it disrespect, that those machines are disrespect to the City. Well, what about the ATM? What about Kensington and Allegheny? And I can give you really disrespect places for the City. What has to do with the machine? If the machine is administrated right, it can be very, very useful. You see those ladies and gentlemen here? Do you know how many hours they work? These people are from 6 o'clock in the morning going to the market, to whatever it is, in order to make just a living. And those machines supporting, help them. Without those games, they will have to lay off people. So I would like to bring a few things in no particular order. And by the way as far as disrespect, there are plenty of states like Georgia, Iowa that already have those state-wise confirmed and approved. And I don't think it's fair to call the state of Georgia disrespectful because they passed a law on something that I believe, I truly believe that you don't really understand completely the nature of this business. And by the way, I will be happy to be part of a committee at $1-a-year salary and to help the City to establish a plan that will help the local merchant as well as the City and to put some order in this mess. Yes, there are places that have 15 machines. What happened to a place when at 12 o'clock, 11 o'clock somebody hit the jackpot and he wins $3,000 or $4,000 and the local store do not have the money. They don't keep this money. In our company on every game there is our name and number. We ask them to call and we'll tell them somebody will come and upfront the store the money because those people getting irritated sometimes and, yes, it can be nasty. So there is a solution. And when we talk to them and we explain to them keep the ticket, it's like with the lottery, they come down, they don't make any mess and we take care of it. Our suggestion is to have what some other city has, to levy a fee per machine annually, something like $400 per machine annually paid upfront per year, and you provide us with a sticker, one of the sticker that will be difficult to copy, to forge because in this business plenty of people try to forge it, and to have it per machine and to limit up to five machines per store. And every store that has machines without the sticker, fine the store $1,000 a day. $1,000 a day, it will clean up. Furthermore, license the provider or the distributor to do so by qualifying them because we have now people that somehow came from out of state and they put machines, they don't fix them, they don't support them and cause them a lot of problems. Yes, they give them higher commission, but it cause a mess.
And by having a program whereby those machines will be "licensed," first you will know who has it because right now nobody including myself has clue how many machines are there because it's not just in the bodega, it's in the barbershop. You name it, they're everywhere. This way we can control it. And as far as security, let me tell you about security. A few years ago somebody broke into one of our machine and he dropped his license plate into the machine. So we picked up the machine, we found the license plate. I took the license plate. I wrote a letter. I went to the detective, to the police and guess what, nothing happened. We give the license plate the guy who broke the machine. We gave them many times videos showing clear face. We had many times store owner calling the police, and I hope the new Chief of Police will take care of it because it's known in Philadelphia that if you call the police about something the machine, you have 45 minutes before they show up, 45 minutes. And I have some friends in the police station in the police force that confirm to me because they don't want to get involved because of many other things, you know. So it's easy to eliminate a lot of the headaches. We by the way a few years ago some of the machines picked up. And I have here citation, criminal and everything. We went to court. Guess what, as they said to me from the police depot, we are one of the few companies that walked out with checks. They gave us all the money back. They gave us the machine and everything. We were ready. We had expert. We have everything. Something else what we do, when somebody breaks into the machine, we put a wanted $5,000. Guess what, the mother of this guy, of this crook, the mother called us. And by the way, I have many more stuff that I'll be happy to provide you later on in orderly way. There are different numbers around about how many machines are there. I don't know, 50,000, 100,000. It's a lot. And --
And again, you will ask, different people they all have different numbers. Nobody really knows. But when you go to places that have of those 15 machines, you know, it's -- we by the way, any place we tell them, five machines we don't want it, you know. But we're trying to do the right thing, but it's not always easy because sometimes somebody from out of town will come to the store and say, listen, I'll give you $10,000 advance per machine, $10,000 advance machine, get everybody else out. And the poor store owner, for them $20,000, $30,000, you know, it's a lot of money so we understand. So it is a total Wild West. Anyhow this is basically -- my concern is that the location here, the store owners they depend on this income and by cutting it down, by slashing it, by eliminating those machines that will have to -- they will have to lay off people. And they do not lay off people like me. I'm all right. They lay those people who need the work, who need the money. And they're all from Philadelphia. And as far as horror stories about machines or whatever, I can give you a lot of horror stories about the City of Philadelphia, what's happening. Those machines are not the reason. It's an excuse for you guys to say, okay, you think we'll solve it. If you will convince me by taking those machines out, the crime rate will drop down by 50 percent, I'll be the first one to say, praise the Lord, let's do it. But you and I, we know that's not the issue. And hopefully again, the new Commissioner unlike the previous Commissioner that I saw several times on T.V. and I'm not going to be very popular and say, oh, please, we have to work together, we cannot continue this one here, and in the meantime not backing up the police. And I feel terrible to be a policeman. You must be out of your mind to be a policeman in Philadelphia. So we support them as much as we can. So basically that's what I had to say. If anybody has any question. And again, this was done without big or long preparation. And I think the patient is sick. It's relatively easy to fix it, but we need your guidance. We need your open mind to work together to something that can help the local stores and to put law and order and to put some additional money in City Hall. Thank you. Any question I will be happy to --
So I'm going to defer the mic to my colleague Member Brooks. I want to thank you for coming in and testifying because I like candor. I like straightforward talk because through that we get better understanding. If I don't know where you stand, you don't know where I stand, we can't be clear on the public policy. So thank you for that.
Real quick, have you ever met with the state to talk about these regulations and problems?
The Commonwealth of Pennsylvania, the people in Harrisburg. Have you ever met with them?
Not directly. We met indirectly with them because the VGT, it's a different level of gambling or the state are talking about the VGT. The VGT will be rewarded to only the few locations, whether it's a liquor store or something. They are not -- and again, the requirements are difficult, but they're not going to solve the problem and they're definitely not going to support the merchant, the average merchant. Because for the VGT you need to have certain condition, whether liquor license or certain size of store metrics in order to be eligible to have five of them. Yes, I wish everything could be done. You can have, you know, if the City wants to have it percentage, it's fine. It's a lot of work, and it's easier for the City to have -- listen, here's a sticker, you may pay us. Because remember, sometimes those machines end up in months in negative. It's not always positive. There is months that they have negative. So I think that the sticker will be easy way. It will be easy way for you to control, you know, exactly who has it, and we will help you with it. And --
So I'm going to hold you to that. You will provide us with those suggestions, and we will take them earnestly under consideration. I'm going to yield the mic to Member Brooks.
Thank you. I just have a question for clarity. You mentioned commission. Is the commission received per machine or is the commission for hosting a machine in the store? What's the average? I didn't understand --
Okay. To simplify the process they are doing in some other cities, simplify, you issue a sticker per game. In other words, if there's five games, five stickers, those stickers are valid for one year. You don't really care if the machine breaks up, breaks down and we have to replace the machine. As long as the sticker is valid for the specific period, this way you know if you have 400 and wherever it is, they buy it in advance. Those stickers, they pay the annual amount and they renew. And of course, carrot and the stick. You have to have major fine to the stores if they do not have it and you have to find the store. And probably the store in here would not like to hear it. Don't do it to the distributors. They don't give a damn, you know, in a sense. But the store owner, they'll know it will be heavy fine per day. They'll make sure that they will get somebody licensed to install the machine and to handle it properly. And again, to do it in such a way that not anybody that got sort of shady money and a lot of shady money and has hundred machines and comes into the stores and say, whatever you need, here it is, here it is, whatever it is. Those are breaking down and they cannot reach them. It's hit the jackpot. They cannot pay it. Those are the problem. You have plenty of companies, legitimate companies, that will be able to stand behind it and to do proper services. I said to you, we have our number because even if a customer claims that he hit the jackpot and he does know and the machine cheated him and all this stuff, we heard all the stories. Somebody will answer him professionally telling him the stories, and we never ever had any issue with the police or anything about issues about the machines. Yes, we had in the past broken machines, but I addressed it before.
Thank you so much, Mr. Marchand, for that. But I was just wondering how much is the commission? What is the percentage of the commission per machine? UNIDENTIFIED SPEAKER: 40 percent.
Thank you. That's -- UNIDENTIFIED SPEAKER: The legal ones.