HARRISBURG -- Four Pittsburgh-area state senators want to use an upcoming bill on table games to force the Rivers Casino to start making its $7.5 million annual payments on bonds used to build the new hockey arena.
Sen. Jane Orie, R-McCandless, and Democratic Sens. Jim Ferlo of Highland Park, Wayne Fontana of Brookline and Sean Logan of Monroeville vowed yesterday to amend Senate Bill 1033, a bill adding table games to casinos, to force the casino to start making the payments, which the senators say are due to the city-Allegheny County Sports & Exhibition Authority.
Sen. Robert Tomlinson, R-Bucks, has sponsored the bill to legalize table games like roulette, blackjack and poker at state slots casinos, nine of which are now open. Key aspects of the bill still must be decided, such as the amount of an upfront licensing fee a casino must pay for table games and the annual tax rate on table games revenue.
The one-time license fee to be paid by each casino will likely be either $10 million or $15 million, and the tax rate will likely be 12 percent or 18 percent on the gross revenue from table games (the amount that's left after winners are paid).
The senators from the Pittsburgh area criticized the state Gaming Control Board for not being tougher on Chicago businessman Neil Bluhm, who heads the group that took over the project, to force him to make the first $7.5 million payment, which senators said is due today.
"Rivers Casino had better make that payment as soon as possible," said an angry Mr. Ferlo.
"We are going to put the hammer on (Mr. Bluhm)," added Mr. Logan.
"Mr. Bluhm shouldn't be able to get table games until he pays the $7.5 million," said Ms. Orie. Mr. Bluhm is set to break ground next week on another casino he's involved in, SugarHouse in Philadelphia.
The casino and the SEA are locked in a dispute over the timing of the arena payment. The SEA contends the first payment is due Oct. 1, as outlined in a payment schedule on the arena bonds. But Rivers officials maintain that they were told they had at least until 2010 to make the first payment during negotiations last year to rescue the project from near bankruptcy.
Both sides currently are in negotiations to try to resolve the issue. The casino has said it will honor its commitment to make the payment, timing being the only issue.
"We are working to resolve this difference and we don't expect this legislation to have any impact on us," said casino spokesman Dan Fee. He declined further comment.
Although bond documents call for the first payment to begin on Oct. 1, the SEA actually has until Nov. 1 to make it, Executive Director Mary Conturo said.
A table games license is considered a lucrative addition to a casino, so the senators are hoping that by threatening to delay a license for Rivers Casino, it will force Mr. Bluhm into making the payment.
If the casino doesn't make the $7.5 million payment, taxpayers may get stuck with it, Ms. Orie complained.
"This is another example of how taxpayers may be getting the short end of the stick from a millionaire casino owner," she said.
Ms. Orie also wrote a letter yesterday to the Senate's Committee on Community, Economic and Recreational Development, which is overseeing the table games bill.
Ms. Orie said that Rivers Casino is currently "ranked seventh out of the nine casinos (in Pennsylvania) in revenues in September. ... It does not make any sense to simply award table game licenses to such imperiled businesses like the Rivers Casino."
Ms. Orie also asked the committee to hold a hearing on the situation regarding the Rivers Casino and the $7.5 million payment.
Looking for more from the Post-Gazette? Join PG+, our members-only web site. You'll get exclusive sports content, opinion, financial information, discounts from retailers and restaurants, and more. Our introduction to PG+ gives you all the details.
