Decision day for casino licenses a 'tense time'

Isle of Capri only Pittsburgh bidder to make a final pitch

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HARRISBURG -- Pennsylvania gaming control board members met behind closed doors yesterday and into the evening trying to pick winners for casinos in Pittsburgh and elsewhere in the state.

   
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Board members also grilled Isle of Capri officials on the Penguins' future in the city under its plan for a new arena.

The board is expected to reconvene today at 10 a.m. in what could be a signature moment in the state's history -- with the award of one stand-alone casino for Pittsburgh, two for Philadelphia, and two elsewhere in the state, while finalizing permanent licenses for six racetrack slots parlors in Pennsylvania.

The board's goal is to act on all the stand-alone licenses today, although there is a chance one or more could be delayed if members aren't able to reach a consensus. To award a license, the four state legislative appointees and at least one of the three named by Gov. Ed Rendell must agree on the selection.

"This is an immensely difficult decision but the public should be assured they are prepared to make it in a fair and open manner," Gaming Control Board spokesman Doug Harbach said. "Tomorrow is the culmination of an unprecedented amount of work accomplished by the board and the staff."

Nearly one year after the formal casino applications were filed, board members hunkered down to deliberate after 10 of the 13 bidders for stand-alone licenses statewide made 11th-hour pitches for their projects, hoping that one last word or fact will sway the vote their way in the high-stakes competitions.

Two of the Pittsburgh applicants -- Forest City Enterprises, with a proposal for a casino at Station Square, and PITG Gaming LLC, with one for the North Shore -- decided to skip their chance to get a final word in, letting the record stand. Don Barden, the head of PITG Gaming and a successful businessman and casino operator, said he felt "numb" awaiting the board's decision.

"It's a very tense time," added Allan Solomon, Isle of Capri executive vice president and general counsel.

Isle of Capri was the only Pittsburgh competitor to make a closing argument, and its time before the board was dominated by questions about the Penguins' future in the city and the gambling company's pledge to provide $290 million to fund a new arena.

Board members pressed Isle of Capri attorney Mark Stewart on whether there were any loopholes in the agreement between the Isle of Capri and the Penguins that would permit a new owner to move the team from Pittsburgh. Mr. Stewart answered no, that the agreement required the any new owner to keep the club in the city for at least 20 years if the casino operator gets the license.

"Anybody who buys [the Penguins] is required to step into their shoes," he said.

Member Joseph "Chip" Marshall wanted to know whether there were "break-up" provisions that would allow a new owner to buy his way out of the contract. No, Mr. Stewart replied.

In response to a question from member Mary DiGiacome Colins, Mr. Stewart added that any potential owner who tries to break the agreement could be subject to liquidated damages -- many hundreds of millions of dollars, Mr. Solomon estimated -- and possible court action to prevent the move of the team.

Isle of Capri decided to address the board because of the decision Friday by Canadian businessman Jim Balsillie to withdraw his offer to buy the Penguins. Mr. Stewart told the board that Isle of Capri officials were "completely blindsided" by the decision.

"It's irrelevant to us who owns the Penguins," Mr. Solomon said afterward. "What we are doing is ensuring the city of Pittsburgh that the Penguins will stay here for at least 20 years."

Asked whether it was a good sign the board was asking such questions, he replied, "I hope so. I mean I wanted to clarify anything that came up in terms of what happened with Mr. Balsillie last Friday night."

While discussion of the Penguins' future dominated Isle's appearance, it was not the only issue raised by the board. Member Sanford Rivers asked why there has been so much discussion about an arena and so little about any commitment to the community and city as a whole by the Isle of Capri.

Mr. Stewart replied that the Isle of Capri, which has faced some opposition in the Hill District, has been responsive to the community as a whole with its proposed $350 million plan to redevelop the lower Hill where Mellon Arena now sits and with a plan to provide $1 million a year for overall revitalization. The $350 million mixed-use development would be built near the new arena and the casino, which would abut the Hill.

Although PITG Gaming chose not to address the board, its attorney, Jim Eisenhower, was asked by board Chairman Tad Decker about competing against two bigger companies in Isle of Capri and Harrah's, which would manage the Forest City casino at Station Square. Mr. Eisenhower in essence indicated it wouldn't matter, noting that Mr. Barden intended to make the proposed North Shore slots parlor next to Carnegie Science Center the "crown jewel" of his company.

Harrah's has touted its ability to bring gamblers from other parts of the country to Pittsburgh to play, but Mr. Eisenhower said the reverse could happen as well, with players leaving Pittsburgh for other gambling destinations. He said Mr. Barden's goal is to attract people to the Pittsburgh casino.

While the board hopes to award all licenses today, Mr. Harbach said it does not believe it is required to do so under the state's gambling law. That legislation, he said, demands that the board consider, approve, deny or condition the approval of the stand-alone licenses. That means, according to the gaming board's interpretation, that a vote on any or all of the licenses could be deferred to a later date if no consensus can be reached.

All five applicants for the two Philadelphia casinos made final pitches to the board yesterday, as did those with proposals to build in Allentown or Bethlehem and the Poconos. Crossroads Gaming Resort and Spa, with a controversial proposal to build a casino near the Gettysburg battlefield, decided not to address the board.


Mark Belko can be reached at mbelko@post-gazette.com or 412-263-1262.


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