Pennsylvania Adds Slot Machines; Penguins To Seek License?

Penguins Hoping For 5,000-Slot Casino To Assist In Building New Arena

Pennsylvania Gov. Ed Rendell on Monday signed into law a bill allowing 61,000 slot machines at 14 locations across the state. In Philadelphia, Julie Stoiber cited supporters of the legislation as saying that the slot machines "will bring in $3[B] a year in gross revenue when fully phased in in four years." About $1B of that will provide real estate tax relief across the state and wage-tax cuts in Philadelphia, as well as boost racetrack purses and pay for economic development, including an expansion of the Philadelphia Convention Center (PHILADELPHIA INQUIRER, 7/6). Also in Philadelphia, Dick Jerardi reported tracks will receive nearly 50% of the slots revenue, and revenue earmarked for racing purses will eventually reach 18%. Smarty Jones' trainer, John Servis, said that without the slot money, "he probably was going to leave for a bigger circuit," but now he will stay at Philadelphia Park "and eventually be able to run almost all his valuable horses" at the track. Rendell: "I really believe Smarty gave us a big assist (with the legislation). I think he brought back into focus that this was a battle to save this industry" (PHILADELPHIA DAILY NEWS, 7/6). Pennsylvania Thoroughbred Horsemen's Association Exec Dir Mike Ballezzi predicted that Philadelphia Park purses, "now around $130,000 daily, will reach $400,000 daily within a couple of years" (PHILADELPHIA INQUIRER, 7/6).

PENGUINS TO SEEK LICENSE? In Pittsburgh, Chuck Finder reported the Penguins "are expected to seek a license for a 5,000 slot machine casino." Parlor owners will receive 48% of revenues. MTR Gaming CEO Ted Arneault said that his group "is working with the Penguins to obtain a slot license designated for Pittsburgh." Arneault is focusing on two slot sites — a thoroughbred racetrack in Erie and a 5,000 slot machine parlor in Pittsburgh. Finder noted that under the new law, a principal owner of one slots parlor can own up to 33% of a second, "likely forcing MTR Gaming — with its Presque Isle Downs license — into a minority-ownership role with the Penguins." With slots revenue, the combined $107M the Penguins and Arneault pledged for a new $250M arena "likely would change. But Arneault stopped short of saying both MTR Gaming and the Penguins could foot the entire arena bill." Arneault: "I'm not saying the whole arena (can be funded that way), but you certainly can get a substantial amount of private money involved so you can be sure an arena gets built" (PITTSBURGH POST-GAZETTE, 7/6).

DETAILS OF PENS' OFFER: In Pittsburgh, Dejan Kovacevic wrote the Penguins are expected to offer "a commitment to cover all of the estimated" $250M cost of a new arena, "along with a pledge to keep the ... franchise in town for the long term." Penguins President Ken Sawyer: "Despite the fact that there appears to be no specific allocation for a new arena in Pittsburgh, we believe this legislation will ultimately be the catalyst for an arena financing plan that works in the best interest of all parties." Kovacevic noted State Sen. Sean Logan, an opponent of public funding for a new arena, "was effusive in his support of awarding a slots license to the Penguins." Logan: "If the Penguins ... are serious, that's something we all should look into." NHL Commissioner Gary Bettman last week said that he "would take no issue with the team owning and operating a parlor, even if it were part of the arena" (PITT. POST-GAZETTE, 7/5).

BETTIS: In Pittsburgh, Belko & Fittipaldo report Steelers RB Jerome Bettis yesterday confirmed that he is a limited partner in Charles Betters' Pittsburgh Development Group II, which is proposing to build a horse track, slot machine casino and residential development outside Pittsburgh. However, Bettis in a statement said, "Should my involvement present a conflict with the NFL rules, I will take whatever actions (are) appropriate to assure compliance with those rules" (PITTSBURGH POST-GAZETTE, 7/7).