Legislator wants to postpone casino license
Gaming Control Board to get at least two new members by mid-January
Sunday, December 26, 2010
By Tom Barnes, Pittsburgh Post-Gazette
HARRISBURG -- Four competitors, including Nemacolin Woodlands and a convention center near Gettysburg, hope to learn Jan. 6 whether they have won a lucrative license that will let them add slot machines and table games.
But the gaming contestants may have to wait a lot longer if one legislator gets his way.
Rep. Curt Schroder, R-Montgomery, who has criticized the seven-member Gaming Control Board in the past, thinks the regulators should put off their upcoming decision on who gets the state's second (and final) resort casino license, because at least two new members may join the board by mid-January.
Mr. Schroder wrote to gaming board Chairman Greg Fajt, asking for a delay on the license until "after the new legislative appointments are made."
An award made by officials who are " 'on the way out the door,' and left entirely to the subsequent appointees to implement, does not serve the public interest," he said.
Mr. Schroder's request carries clout because Republicans won control of the House in November. The GOP already controls the Senate and the next governor, Tom Corbett, is a Republican.
However, some people fear that deferring the license decision could delay construction of the new resort casino for months. That would delay the influx of funds for property tax reduction and the 1,000 or so new jobs that a casino would bring.
Nemacolin, in Fayette County, and the proposed Mason-Dixon casino near Gettysburg are competing against a resort in the Poconos in northeast Pennsylvania and a Holiday Inn west of Harrisburg.
Gaming board members Ken McCabe and Jeff Coy have served since the board was created by law in 2004. Their terms end Jan. 18, and since they've served the maximum six years, they can't be reappointed. But they will continue on the board until their legislative sponsor selects a replacement. It's not clear if that will happen by Jan. 18.
Two other board members also have terms expiring then, but they could be reappointed because they haven't served the maximum. Raymond Angeli, president of Lackawanna College in Scranton, was chosen by former Senate Democratic leader Bob Mellow; Gary Sojka, former president of Bucknell University in Lewisburg, was chosen by House Republican leader (and new speaker) Sam Smith.
The new Senate Democratic leader, Jay Costa of Forest Hills, will decide if Mr. Angeli stays or goes. Mr. Smith will decide on Mr. Sojka.
The other three board members, whose terms aren't up yet, were named by outgoing Gov. Ed Rendell. Chairman Fajt of Mt. Lebanon is a lawyer and former Rendell aide; the others are Philadelphia attorney Ken Trujillo and James Ginty, a businessman/lawyer from Philadelphia. Mr. Fajt's term is up in July.
Doug Harbach, a gaming board spokesman, said the board had hoped to make a decision by "early 2011" but couldn't say if it will come at the Jan. 6 meeting. Jeff Nobers, a Nemacolin spokesman, said he hopes the license will be awarded Jan. 6. David LaTorre, a spokesman for Mason-Dixon, said, "Our focus continues to be on Jan. 6."
Even if the license is awarded at that time, however, construction of the new gambling hall could still be delayed -- perhaps for months -- if one or more of the losers goes to court.
The first resort casino license was awarded over a year ago to the Valley Forge Convention Center, west of Philadelphia, but nothing has been built yet because of a lawsuit filed by Parx Casino, located not too far away in Bucks County.
The award of the second resort casino license has become a pitched battle. The Nemacolin resort, which is owned by influential businessman/politician Joe Hardy, founder of 84 Lumber, already has a number of hotel and recreational attractions and would like to add gambling. The Nemacolin casino would be located in what is now the Wild Side, a family entertainment arcade.
However, officials at The Meadows racetrack/casino in Washington County, about 60 miles away, have voiced objections, fearing a Nemacolin casino might take away its customers.
And the idea of putting a casino just south of the Gettysburg battlefield has generated great controversy, with many Civil War advocates and historians claiming that putting a gambling palace so close to "hallowed ground" would besmirch the famous Civil War site.
But backers have mounted a counterattack, saying Adams County needs the jobs that a casino would bring and new revenue to stop future property tax increases in the home township and county.
Mr. LaTorre claims the state's geography favors an Adams County casino, because Eastern Pennsylvania already has six casinos, including a new one in Philadelphia. There's also another stand-alone casino license reserved for Philadelphia, plus the resort casino that's planned for Valley Forge, if the lawsuit is settled.
Western Pennsylvania has three casinos -- The Meadows, The Rivers in Pittsburgh and Presque Isle Downs in Erie -- with another racetrack/casino proposed for Lawrence County. And northern West Virginia has two casinos just over the Pennsylvania border.
By contrast, Central Pennsylvania has only one casino, the Penn National racetrack/casino 20 miles east of Harrisburg.
The proposed casino near Gettysburg would be run by Penn National, which operates numerous casinos around the country as well as the one near Harrisburg. Mason-Dixon officials have raised questions about the finances of the company that Nemacolin has picked to run its casino, Missouri-based Isle of Capri Casinos.
Mr. LaTorre questions whether Isle can come up with the $175 million that it would need to build both the Nemacolin casino (at $50 million) and a $125 million casino planned for Cape Girardeau, Mo. He said statements that an Isle official made to the gaming board in November indicate financing problems, but Isle officials dispute that.
Mr. LaTorre said, "It appears the Nemacolin/Isle financing plan relies on cushions and precise timing from cash flow they don't own and from a casino they haven't built."
In comparison, he asserted, Mason-Dixon's financing plan "is fully funded ... with existing cash on Penn National's strong balance sheet from day one."
But Tom Hickey, an Isle of Capri spokesman, and Mr. Nobers, the Nemacolin spokesman, reply that Isle will have the cash on hand and the borrowing ability to do both projects. They said Isle of Capri already has resources from 15 existing casinos and has adequate credit.
The gaming board is certain to scrutinize all four bidders, because in 2006 it gave a casino license to a Philadelphia group called Foxwoods, which wasted four years in an unsuccessful search for financing and has now had its license revoked. That has caused embarrassment to the board.
Tom Barnes:
tbarnes@post-gazette.com or 717-787-4254.
First published on December 26, 2010 at 12:00 am
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