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Progress on slots licensing slow but steady
Friday, December 16, 2005

HARRISBURG -- The Pennsylvania Gaming Control Board is making progress on the issue of licensing slot machine distributor and supplier companies, but it looks like gambling licenses for the first racetrack/casinos won't be issued before August.

The seven-member board said at a meeting here yesterday that it will begin accepting license applications from would-be slots suppliers and distributors on Tuesday and continue the process until Feb. 28.

The suppliers will be middlemen who will buy slot machines from manufacturers and sell them to casinos, servicing them and updating them as necessary. There could be as many as 61,000 slot machines at 14 casinos to be set up in Pennsylvania.

Such supplier/distributor firms don't now exist in Pennsylvania, and board Chairman Tad Decker estimated it could take from 60 to 120 days to check out their financial backgrounds once each firm applies for a license. The board also will work with state police to check into any criminal backgrounds of supplier company officials.

However, the board can't issue licenses for the slots suppliers until it makes an important decision -- whether to make the state one or two regions in which the suppliers will operate.

Board member Jeffrey Coy, of Shippensburg, a former state legislator, wants there to be an eastern region and a western region, where different slots suppliers would operate. He thinks that would create more companies and more jobs.

But board member Ken McCabe, a former FBI agent from Pittsburgh, thinks the slots suppliers should be able to sell machines to any casino anywhere in the state.

Decker said he hopes to resolve the dispute over regions by the Feb. 28 deadline for accepting supplier applications.

Because of the need to do detailed background and financial investigations, Decker didn't think that slots suppliers would have licenses issued before May.

According to the July 2004 slots law, after the supplier licenses are issued, 90 more days must elapse, in order to give the suppliers and the slots manufacturers enough time to get established in Pennsylvania.

Once those three months pass, the first conditional licenses for racetrack/casinos can be issued by the board. Decker said he doesn't see that happening until August at the earliest and maybe even later.

So far, only one racetrack has applied to the board for a slots license, Pocono Downs in northeastern Pennsylvania.

By Dec. 28, applicants for six other racetrack/casinos, plus five stand-alone casinos and two resort hotel casinos must submit their license applications. Their names will be released, probably in early January, said board spokesman Nick Hays.

The license applications are complex and detailed. The racetrack application submitted by Pocono Downs weighs more than 400 pounds, said board Executive Director Anne Neeb.

So far, the board has received license applications from 10 slots manufacturers, including the nation's biggest firm, International Game Technology of Nevada.

No applications for slots suppliers have been received yet. One person who has said he's interested in a slots supplier license is former Allegheny County Executive Jim Roddey, who may form a partnership with several others to distribute slot machines and use 40 percent of the profits for community projects.

First published on December 16, 2005 at 12:00 am
Harrisburg Bureau chief Tom Barnes can be reached at tbarnes@post-gazette.com or 717-787-4254.