The Penguins' hopes for a new igloo got a stick in the eye yesterday when Gov. Ed Rendell pronounced himself "skeptical about the chances for a new arena."

Asked about prospective new ownership led by William "Boots" Del Biaggio III of California, the usually optimistic Rendell turned sour. "I understand he says that the team will stay here if there's a new arena," he said. "There seems to be no support among the public officials here for any public [arena] funding, and if that's the case, I think the future is not great."

Rendell dashed any lingering hopes that the team could cash in on $60 million in arena funding that long ago was included in the state's capital budget, and later was boosted to $90 million. The capital budget serves as a wish list for projects that may or may not ever get funded.

"It's in the state capital budget, but there's about $5 billion [in projects] in that state capital budget, and only $750 million authorized," he said.

David Morehouse, Penguins senior consultant, said the governor's comments reinforced the team's intentions to pursue a license to operate a slot machine parlor, and use some of the profits to finance a new building.

"That's the reason why we're applying for a slots license, so we don't have to have public financing for a new arena," he said.

Rendell doesn't have a direct say in whether the Penguins get the sole slots license reserved for Pittsburgh. The licenses are to be awarded by the Pennsylvania Gaming Control Board under criteria that haven't yet been determined. Rendell appointed three of the board's seven members, and legislative leaders appointed four.

The Penguins' potential rivals for a slots license include Alco Parking, owner of North Shore land; Station Square owner Forest City Enterprises; and Beaver County developer Charles Betters, who owns property in the city's Hays section.

Morehouse said the Penguins aren't worried that Rendell's skepticism could affect their chances at a license. "We trust the governor and the gaming board will support the slots application that puts Pittsburgh's interests first," he said.

Should a license be awarded to the Penguins, it would secure a new arena, better connect Downtown with the Hill District, and bring new investment to Uptown, Morehouse said.

Rendell didn't directly address the Penguins' hopes for a slots license, but said the team's "last, best chance" to finance an arena was his effort to get a portion of gambling revenue earmarked for them in the slots bill.

"I put funding for a new arena in the gaming bill," Rendell said. "I put it in, because I do think an arena is important, and I think gaming funds would be a perfect way to pay for it. But the Legislature cut it out."

There's still room for "innovative" state aid for an arena, said state Sen. Jay Costa, D-Forest Hills. Costa noted that state contributions to the Pirates and Steelers stadiums were crafted as "loans" that the teams must pay back if tax payments from development around the venues don't eventually cover the state investment.

"I don't want to shut the door" on such an arrangement for the Penguins, Costa said.