Would-be race track casino operators fret about delays in the state's licensing process

Saturday June 17, 2006

If the Gaming Control Board takes another year or more to approve slot machine licenses for race track casino, The Meadows would sustain a "devastating" financial blow.

That's what Meadows Vice President Mike Jeannot said yesterday in assessing the board's long-stalled efforts to legalize slots gambling at that harness track and several other racetrack in the state.

"We've been waiting for two years," since the July 2004 slots law was passed, to begin reaping financial benefits and increased attendance once gaming goes into effect at the Washington County track, Mr. Jeannot said.

"For the last 10 years, we've been getting hurt by competition from West Virginia tracks," he said, referring to a horse track and a dog-racing track that have slot machines and draw thousands of southwestern Pennsylvanians each year across the state line.

"We need to have slots approved as quickly as possible," Mr. Jeannot said. "We are planning to use those revenues to save the horse racing industry. If there's a 12- or 18-month delay in getting the slots up, it truly could be a matter of life and death. We will be devastated, we really will.''

His company, Magna Entertainment Corp. of Toronto, plans to sell the 43-year-old harness racing facility to Millennium Gaming of Las Vegas, which intends to have a slots parlor open by January in a temporary facility adjacent to the harness track.

Mr. Jeannot was alarmed by the doubts expressed publicly Thursday by gaming board Chairman Tad Decker. He's hopeful that the board will begin to license slot machine suppliers at its next meeting June 28, but there are no guarantees.

If suppliers -- middlemen who will buy slots from manufacturers and sell them to casinos -- are licensed at that time, the race track casino can be licensed 90 days later, or by late September. Several racetrack hope to have their slots parlors open by December.

But if the gaming board doesn't act on the supplier rules by late June, a separate state agency, the Intergovernmental Regulatory Review Commission, will get involved in the supplier regulation process. This could delay the licensing process until the summer or fall of 2007, Mr. Decker said.

Joseph Lashinger, a partner in a new harness racetrack almost ready to open in Chester, south of Philadelphia, said it's also vital to his track to add slots as soon as possible.

"It's extremely important for us to get a slots license this fall," he said. "It will cause us pain if we don't. We have hundreds of millions of dollars in the ground now" and want to make money off that investment.

He estimated the cost at $430 million for building the new racetrack along Interstate 95, plus a new building to hold 2,750 slot machines. The slots facility will be run by Harrah's Entertainment.

The track will begin racing Sept. 10 and Mr. Lashinger is hoping the slots building can be open by December or January.

It's not just the track that needs the revenue. Horse owners, trainers and drivers will share in greater purses and the host county and city will benefit from a share of the slots revenue, he said.

A third track owner, Bob Green of Philadelphia Park in Bucks County, said yesterday that he's remaining calm despite Mr. Decker's forecast of a possible year's delay in issuing slots licenses.

"In this business we have to make certain assumptions and take certain risks," he said. "If the board can resolve the suppliers issue on June 28, the 90-day clock will start running for issuing race track casino licenses by the end of September."

State politicians who strongly supported gambling in 2004 also were staying calm about the board's inaction on supplier licenses.

Tom Andrews, a spokesman for House Democratic leader H. William DeWeese, who pushed to legalize casinos, said his boss "won't comment on a decision by an independent agency" like the gaming board.

Gov. Ed Rendell, during a visit to Pittsburgh yesterday, said he thinks the deadlock over supplier licenses will be resolved by June 28.

If the regulatory deadlock remains, it's possible that legislation could be introduced to remove the supplier requirement from the slots law, he said. No other state requires suppliers.

Gaming board members "are working to try to reach a compromise and I believe they will. I'm optimistic that the people who are working on this will get it done," Mr. Rendell said.