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Casino bill for resorts set for House
Tuesday, December 08, 2009

HARRISBURG -- After weeks of negotiations behind the scenes, the state House today will debate a gambling-expansion bill that would add two more resort hotel casino licenses and greatly increase the odds that Fayette County's Nemacolin Woodlands would get one of them.

It would also allow The Rivers Casino in Pittsburgh and The Meadows racetrack/casino in Washington County to add up to 250 table games, such as blackjack, roulette, dice and poker.

The latest version of the gaming-expansion measure, Senate Bill 711, was released last evening by House Democrats, who control the chamber. After today's debate, which is expected to be lengthy and heated, the House could vote on the bill as early as tomorrow.

The bill calls for the number of Category 3 -- or resort hotel casinos -- licenses to increase to four statewide, up from the current two. Each resort hotel casino could have up to 50 table games -- as well as up to 600 slot machines, 100 more than permitted by the 2004 slots law.

Currently, only one resort casino has been licensed by the state Gaming Control Board -- the Valley Forge Convention Center west of Philadelphia and close to the Valley Forge National Park.

Two other would-be Category 3 casinos filed their license applications by a deadline of July -- a convention center near Reading and a resort called Fernwood in the Poconos.

Nemacolin and a convention center south of Gettysburg have also said they will apply for a license if the application period is reopened. The bill instructs the gaming board to reopen it for 90 days. Nemacolin had been hoping to have at least 25 table games, so the bill would give it twice what it asked for.

The new bill does contain a distance restriction on resort hotel casinos, however, which could knock the Poconos applicant out of the running.

The Valley Forge Category 3 casino would be given an exception to the distance requirement because it was licensed before any distance restriction would go into effect.

But if three additional Category 3 licenses were permitted, that would be enough for Nemacolin, Gettysburg and Reading to all get licenses.

While Nemacolin is eager for a resort casino, the opinion in Gettysburg is much more divided. Casino proponents, such as Gettysburg motorcycle dealer David LeVan, thinks an existing convention center five miles south of town is the right place for a resort casino and would lower the jobless rate in Adams County. Mr. LeVan tried to get a license for a stand-alone casino in 2006, but supporters of the Gettysburg historic battlefield successfully stopped that.

Those opponents, led by Susan Starr Paddock of Gettysburg, were at the Capitol yesterday, already trying to persuade legislators to oppose the latest LeVan casino idea.

"A Gettysburg casino, or the battle over one, creates negative impacts on community solidarity and a negative image of Pennsylvania on the national and worldwide stage," she claimed.

This latest version of Senate Bill 711 settles another key question about table games -- the tax rate to be applied to the revenue generate. Until June 1, 2011, the tax would be 14 percent of the daily gross table game revenue, but after that the tax rate would drop to 12 percent. The latter figure was the one favored by casino officials. Gov. Ed Rendell had said he favored 16 percent.

The bill also specifies the size of a one-time, upfront fee that casinos would have to pay for table games. If paid by June 1, 2010, the fee is $16.5 million for racetrack/casinos and stand-alone casinos. If paid after that date, it would be just under $25 million.

The one-time fee for Category 3 casinos would be $7.5 million until June 1, 2010. After that, it jumps to just over $11 million.

In 2005 Nemacolin had sought a resort hotel casino license but later dropped the effort because of conditions the state attached. Now it wants the state to reopen the license application process, as long as the new law allows it to have table games.

"With regard to the number of table games, we will abide by what the General Assembly decides," Nemacolin President Margaret Magerko said in a recent letter to state Sen. Richard Kasunic, D-Dunbar. She said 25 tables was "reasonable," but added, "Obviously one would always want more to ensure economic viability."

Other provisions include:

• The state Gaming Board must approve or deny a table games application within 60 days of receipt.

• A casino must agree not to reduce the number of slot machines it had as of Oct. 1, 2009, in order to make room for table games.

Even if the House approves the table games bill tomorrow, it seems unlikely the Senate will act during its two-day session next week. That means action won't be final until late January at the soonest.

The Legislature adopted the state's $27.8 billion budget for 2009-10 in early October but still has not enacted a table games bill, which is needed to generate $200 million and balance this year's budget. The delay on the table games bill is, in turn, holding up the distribution of $728 million in state funds for 28 educational and museum groups, including the University of Pittsburgh and Penn State University.

Bureau Chief Tom Barnes can be reached at tbarnes@post-gazette.com or 717-787-4254.
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First published on December 8, 2009 at 12:00 am