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Slots licenses may be delayed by board dispute over suppliers
Slots applicants are anxious for decisions
Tuesday, October 04, 2005

HARRISBURG -- The Pennsylvania Gaming Control Board will face a problem Thursday that threatens to delay its issuing of slot machine licenses for racetracks around the state.

The board wants to approve temporary, or conditional, slots licenses by late March for The Meadows in Washington County, along with three other existing tracks and up to three that haven't been built yet.

The gaming board decided yesterday to give the racetracks 60 more days -- from Oct. 31 to Dec. 28 -- to submit their slots license application forms. The forms are long and complex and some applicants needed additional time to complete them properly, said board spokesman Nick Hays.

The 60-day delay isn't expected to push back the board's stated timetable for issuing racetrack slots licenses by late March.

But another problem could: an ongoing dispute on the seven-member gaming board over how to license newly formed companies that will supply the slot machines.

Supplier firms have never existed in Pennsylvania because there haven't been any slots casinos. As middlemen between casino operators and slot machine manufacturers, they will buy gambling machines from the manufacturers and sell them to the casinos, and then service any of the electronic devices that malfunction.

Under the state's July 2004 slots law, at least 90 days must elapse between approving the supplier licenses and issuing licenses for racetracks/casinos, so the longer it takes to adopt the supplier rules, the longer it will take to issue slots licenses to the tracks.

"If much more time goes by without adopting supplier regulations, it could delay the issuance of [racetrack/casino] licenses beyond late March," board Chairman Tad Decker said.

The regulations governing slots suppliers "are, at this point, something to be discussed by the board Thursday," Mr. Hays said.

But when will the supplier regs be adopted?

"We don't know," he added.

Meadows Vice President Mike Jeannot said yesterday he definitely will seek a slots license by Dec. 28. He'd like the conditional licenses to be issued by late March because he needs one before he can begin the months-long process of building the slots parlor.

Eric Schippers, spokesman for Penn National Race Course near Harrisburg, also said he'll be ready to apply by Dec. 28. If he gets the license by March, he expects to take 12 to 14 months to open a casino at the track.

Everyone involved in Pennsylvania's brave new world of gambling -- the casinos themselves, slots manufacturers, slots suppliers and even non-gaming food and laundry vendors -- must submit applications for a license.

Application forms for slots manufacturers were completed this past summer and 10 companies applied for licenses by the Aug. 15 deadline. They still are awaiting action by the board.

But supplier procedures haven't been finalized because of a dispute over whether to divide the state into regions.

Some gaming board members want to have five regions, with at least five supplier firms per region. That would fulfill one of the goals of the slots legislation by creating many new jobs, advocates say.

But other members think five regions is too many, and fear there won't be enough business for some suppliers. They favor cutting Pennsylvania into two regions, a western and an eastern, or keeping the state as a whole where any interested and capable slots supplier could operate.

There are now four racetracks in existence, plus two more approved by the state but not yet built. Ultimately, there will be a seventh racetrack. Centaur Inc. wants to build it in Beaver County, while New Castle businessman Carmen Shick wants to put it in Lawrence County.

Pushing the deadline for slots license applications back to Dec. 28 likely will benefit the winner of that contest. Within two months, the state Harness Racing Commission will decide which competitor gets the state's final harness racing license.

Once the racing panel decides where the new harness racing facility will be, that track will have 30 days in which to seek a slots license from the gaming board, which should put it on the same schedule as the other tracks.

First published on October 4, 2005 at 12:00 am
Harrisburg Bureau Chief Tom Barnes can be reached at tbarnes@post-gazette.com or 1-717-787-4254.
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