Nemacolin withdraws slots bid

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The number of potential Western Pennsylvania casinos keeps dwindling, with Nemacolin Woodlands Resort withdrawing its slots license application yesterday.

The posh resort in Farmington, Fayette County, had been interested in operating a 500-machine slots parlor ever since the state's expansion of legalized gambling was approved in mid-2004. Its officials announced yesterday, however, that they did not feel confident enough of profitability to proceed.

Nemacolin's withdrawal comes a month before the Pennsylvania Gaming Control Board was to rule on its license application and a month after Seven Springs Mountain Resort similarly canceled its casino plans. The two facilities in the Laurel Highlands were to be two of the 14 casinos in the state, generating a combined target of $3 billion in revenue.

The government's share of the funds is supposed to accomplish gambling proponents' goals of reducing property taxes and funding economic development projects.

Gaming board spokesman Doug Harbach said that is not a severe setback because of the resort casinos' smaller size. Their maximum number of machines was one-tenth of the 5,000 permitted at seven racetracks and five stand-alone locations in Pittsburgh and elsewhere.

Nemacolin spokesman Jeff Nobers said yesterday that despite the resort's enthusiasm to enter the gambling field from the onset, continued study of projected costs and revenues dimmed the appeal. A key hang-up, he said, was a stipulation specific to the resort licensees that patrons must spend $25 on other activities there in a day -- such as lodging, food or other entertainment -- to be eligible to play the slots.

Mr. Nobers said the patronage fee would make it difficult for the resort to count on sufficient revenue to justify the investment of more than $30 million anticipated in upfront casino costs.

"It just became a situation where the numbers weren't working for us," he said.

Seven Springs withdrew its application for a different reason. The Nutting family, which purchased the resort in July, also has an ownership stake in the Pirates. Major League Baseball forbids its owners from holding a parallel financial interest in a casino.

The withdrawal of the resorts leaves Western Pennsylvania with two slots locations expected to open in the first half of 2007, at The Meadows in Washington County and the new Presque Isle Downs racetrack/casino under construction near Erie. A stand-alone parlor will open later at one of three locations to be chosen around Downtown Pittsburgh, and possibly down the road at a racetrack/casino to be developed in Beaver or Lawrence counties.


Gary Rotstein can be reached at grotstein@post-gazette.com or 412-263-1255.


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