One of the most difficult issues facing gaming in Pennsylvania today involves balancing the public’s “right to know” information about potential licensees, backgrounds and business relationships with the genuine needs of the casinos and potential licensees to shield private and proprietary information from the public and competitors.

In an age of “open and transparent” government fostered by the new Right-to-Know Law, many in the public may expect — and, indeed, feel entitled — to full application disclosure and complete background information about all individual and entities seeking slots or table games licenses in Pennsylvania.

However, it is clear that in Pennsylvania and elsewhere, other important policy issues and concerns — including the applicant’s right to privacy and the Gaming Board’s need to complete a thorough and complete review of each applicant — offset the public’s demand for information. Thus, while Pennsylvania has made great strides toward a more open government, the reality with regard to the “right to know” all information contained on gaming applications is, by far, more restrictive than in other situations.

When it passed the 2004 Pennsylvania Race Horse Development and Gaming Act, 4 Pa.C.S. 1101, et seq., the General Assembly specifically permitted the Pennsylvania Gaming Control Board to restrict access to applicant or licensee records submitted to (or obtained by) the Gaming Board or the Bureau of Investigation and Enforcement (BIE).

Specifically, the General Assembly stated that information submitted by an applicant pursuant to Section 1310(a) (relating to slot machine license application character requirements) or Section 1308(a.1) (relating to applications for license or permit) or obtained by the Gaming Board or the BIE as part of a background or other investigation from any source is confidential and, accordingly, should be withheld from public disclosure.

The policy reasons behind this are fairly simple: in order to provide a thorough review of each applicant, the Gaming Board required complete disclosure from the applicants; applicants, on the other hand, would only be forthcoming if they were assured that sensitive records and information would not be disclosed to the general public. By providing the applicants with the security they require, the General Assembly hoped to create a more hospitable environment for communication with the Gaming Board.

Under the authority of the Gaming Act, the Gaming Board, in turn, promulgated regulations (set forth at 58 Pa. Code 407a.3) that placed records or information that are designated confidential by statute or the Gaming Board or obtained about an applicant as a result of a release executed by the individual at the request of the BIE or the Gaming Board into a “confidential file.”

The Gaming Board also promulgated a list of documents it deemed “confidential,” including the following:

• Information relating to character, honesty and integrity, history of criminal activity, business activities, financial affairs and business, professional and personal associations;
• Personal information, including home addresses, telephone numbers, Social Security numbers, educational records, memberships, medical records and tax returns;
• Proprietary information, trade secrets, patents or exclusive licenses, architectural and engineering plans;
• Security information including risk prevention plans, surveillance and emergency management plans;
• Information that would constitute an unwarranted invasion into personal privacy as determined by the Gaming Board;
• Records of an applicant or licensee not required to be filed with the SEC by issuers that either have securities registered under Section 12 of the Securities Exchange Act of 1934 or are required to file reports under Section 15(d) of that act;
• Records considered nonpublic matters or information by the SEC as provided by 17 CFR 200.80 (relating to commission records information); and
• Financial information deemed confidential by the board upon a showing of good cause by the applicant or licensee.

The Gaming Board’s regulations also stated that documents classified as confidential may only be accessed with the Gaming Board’s authorization. Pursuant to the regulations, the Gaming Board allows the applicant to control public access of records the Gaming Board has determined to be confidential.

Under Section 407a.3(b)(2), the public may be given access to confidential records only if the applicant provides written authorization for release (so long as the document does not contain confidential information of another), or the information becomes part of the public domain by the applicant’s actions. The applicant may also authorize in writing the release to a single person. Further, the Gaming Act prohibits as a condition of approval, the applicant’s authorization for public release of confidential and proprietary documents.

The confidentiality provisions of Act 71 were challenged in Pocono Manor Investors LP v. Pa. Gaming Control Board, in the context of an award of a Category 2 license. One of challenger’s contentions was that the denial of its Right-to-Know request of the competitor’s confidential records prevented it from satisfying the comparative evidence requirement under 58 Pa. Code 441a.7(n). The Pennsylvania Supreme Court determined that the challenger was not directly challenging the propriety of the Right-to-Know decision but rather was asserting that the comparative evidence requirement would be rendered meaningless if access to competitor’s confidential records was prohibited. The Supreme Court held that the General Assembly, by way of the Gaming Act, prohibited the disclosure of documents the Gaming Board determined to be confidential and that the competitive evidence requirement did not override the prohibition of disclosure.

In February 2008, then-Gov. Edward G. Rendell signed into law the new Right-to-Know Law, 65 P.S. 67.101, et seq. This new law was touted as an overhaul to the prior Right-to-Know law which many had viewed as a detriment to public access of governmental records. While this new law changed the way governmental documents in Pennsylvania were treated (by shifting the presumption in favor of disclosure), it did little to change the presumption of disclosure in gaming matters (and, by definition, the Gaming Board’s right to declare certain documents confidential and beyond the reach of the right-to-know requesters.) Under the new law, a record exempt from disclosure under any state law is not considered to be a “public record” and therefore not available for public access. Thus, even under the new Right-to-Know law, the Gaming Board continues to control public access to an applicant’s or licensee’s records.

Like the Gaming Board, the Horse Racing and Harness Racing Commissions (who are also involved in the granting of licenses) require complete disclosure and thorough review of all applications (and applicants) presented to them. However, the General Assembly did not provide the Horse Racing and Harness Racing Commissions the same clear authority to control public access to records as it provided the Gaming Board. Instead, the Horse Racing and Harness Racing Commissions often rely on exemptions — such as Section 708(b)(17) of the Right-to-Know Law, which exempts noncriminal investigation records from public disclosure — as a way to protect against disclosure of sensitive information. This way, these commissions, too, may prohibit disclosure of the applicant’s private and proprietary information, and, in turn, create a secure environment for dialogue with its applicants and potential licensees.

The media and the public may see the Gaming Board’s authority to limit access and commissions’ use of the noncriminal exemption as evidence that the Right-to-Know Law fails to meet the public’s “right to know.” While to some degree this position is correct, the denial of access is, arguably, for the public’s benefit. By limiting the openness of government, those in charge of issuing gaming licenses can provide an environment to allow free and open disclosure by the applicants.

This “private” freedom of disclosure will allow the Gaming Board and commissions to make a more informed decision on the public’s behalf. Thus, while the goal of “complete transparency” and “open government” is laudable, there are situations where the public’s curiosity must take a back seat for the public’s own good.