Casinos could be delayed by a year
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HARRISBURG -- The head of the Pennsylvania Gaming Control Board yesterday said he's not sure any racetrack/casino licenses will be issued by fall and they could be delayed so long that the first casinos won't open until late next year or later.
For months, board Chairman Tad Decker has wanted to approve licenses for the first racetrack/casinos this fall, so the slots parlors could open by year's end.
But yesterday he offered a much more pessimistic outlook, saying he's not sure the racetrack gaming licenses will be issued by fall, and could even be delayed until the fall of 2007.
Such a lag in opening the first casinos would delay, until 2009 or later, the onset of a projected $1 billion coming into state coffers for property tax relief.
"I have some doubts about when [approving the licenses] is going to get done. It keeps sliding and sliding,'' he said after a meeting where the gaming board, once again, failed to approve licenses for slot machine supplier/distributors.
Those are middlemen who will buy slot machines from manufacturers and resell them to casinos. Under the state's July 2004 slots law, the board must license suppliers at least 90 days before casino licenses can be issued.
The board is now facing a key deadline -- its next meeting on June 28 -- for approving licenses for up to 22 slot machine suppliers. If it does -- and Mr. Decker said it could happen -- then the board could still approve racetrack/casino licenses by Sept. 30 or early October.
But Mr. Decker said a serious new hurdle has cropped up. A separate state regulatory agency is about to enter the picture and could take months to put its seal of approval on gaming regulations.
If that happens, he feared the board wouldn't be able to approve slots supplier licenses anytime soon.
The seven-member gaming board remains locked in a months-long dispute over whether to let suppliers operate in either one or two regions in the state.
Commissioner Jeffrey Coy insists on two regions, saying that will allow the largest number of suppliers to operate and create the most jobs. Commissioner Ken McCabe favors just one region. Other commissioners could go either way.
Starting July 1, approval of any new regulations governing slots will be overseen by a separate state agency called the Independent Regulatory Review Commission.
The July 2004 slots law gave the gaming board a two-year reprieve from falling under the commission's jurisdiction, but that ends July 1.
The commission could hold hearings for months, taking testimony from slots foes and proponents and further delaying approval of supplier license regulations, Mr. Decker said.
He said the commission review process could take "at least a year and maybe longer."
"I think [delay of] a year would be an optimistic timetable [for issuing supplier licenses]. There will be opponents of gaming who will have a shot to delay this'' once the commission gets involved.
Commission Director Kim Kaufman said he has already talked to gaming board officials about the regulation process.
The Independent Regulatory Review Commission, founded in 1982, looks at whether a state agency's proposed regulation is clearly written, is consistent with the law creating the agency, whether the board has authority to issue the rule, plus any impact on state finances or public safety.
"Our meetings are public and anyone who has interest in proposed regulations can speak either in favor or in opposition to them,'' said Mr. Kaufman, adding it often takes "six or seven months'' for proposed rules to go through the process.
A bill is before the state Senate that could make numerous changes in the 2004 slots law, including giving the gaming board one more year of reprieve from commission jurisdiction, but it's questionable if the Senate will act anytime soon.
Mr. Decker conceded he's becoming discouraged by the unexpectedly long time it has taken the board to approve the supplier and racetrack/casino licenses.
"If you wait another year before you issue supplier licenses, and then wait another three months before you issue racetrack casino licenses, you will really be dampening the impact of gaming in Pennsylvania and the benefits it's supposed to bring.''
Mr. Decker, a Philadelphia lawyer and ally of Gov. Ed Rendell, added, "I wonder whether [casino] applicants will really stay the course, waiting another year, tying up their money, spending more money for options on land. This is a serious issue.''
He said he still believes gaming eventually "will get off the ground [in Pennsylvania], but it could be substantially delayed if we can't get these regulations in place by two weeks from now.''
First Published June 16, 2006 12:00 am