PN track profitsfrom sale blasted

Feb 1, 2005 4:21 AM

The Mohegan Tribal Gaming Authority closed last week on its $280 million purchase of The Downs at Pocono, the harness track near the wooded resorts of northeast Pennsylvania that also has five OTB parlors scattered around the state.

The Mohegans bought the track from Penn National Gaming, which made $8.5 million off of the track and its OTBs last year. Penn National had to sell it because Pennsylvania’s new gaming law prohibits ownership of more than one racetrack.

Some interesting numbers came to light in the aftermath of the sale.

The Philadelphia Inquirer like most newspapers always interested in making gambling look bad, noted that the Pennsylvania law allows for the gaming commission to question the selling price of racetracks.

The Inquirer’s writer, John Sullivan, did in fairness use a quote that some other writers, bent on making their point, might have omitted. He noted that the University of Nevada’s well known gaming expert, professor William Thompson, who teaches public administration, said of the provision, "There is no sense to that. It’s rent control. We have a marketplace that tells us what the value of something is."

Sullivan pointed out in his story that Penn National had paid $47 million for The Downs at Pocono when it bought it nine years ago.

So what?

Slots at tracks in Pennsylvania were but a distant dream nine years ago, and a lot of blood and tears have gone into getting them in the interim. No one knew, in 1996, whether slots would ever be legalized, and for Penn National to gamble $47 million on the if-come was a gutsy bet.

Magna Entertainment did the same thing, rolling $53 million for The Meadows, near Pittsburgh, in 2001, again long before the legislature finally heeded, not without a bitter fight, the call of governor Ed Rendell for slots.

It is interesting, in view of this deep legislative concern over fair pricing, as to how well the legislature looked after the people — some of them former legislators — who will run gambling in the state. And it tells a lot how Pennsylvania, a major racing state, looks at horse racing.

Racing commissioners there are paid $150 a day and expenses on days they actually work on racing problems.

Six of Pennsylvania’s gaming commissioners are going to be paid $145,000 a year. The seventh member, the chairman, will be paid $150,000.

Then, last week, the commissioner announced each member would receive, on top of those hefty salaries, $650 a month in "car allowances." The story on this in the Patriot-News, the paper in the capital city of Harrisburg, began, "The first winners from the slot-machine gambling in Pennsylvania may be the people who are responsible for regulating it."

The car deal sent me to my local rag, and its interminable auto ads. I can, I learned, get a new Honda Accord LX for $219 a month. Or a Ford Taurus for $239 a month, or a new 2005 Pontiac Grand Prix for the same price.

I can get a new 2005 Ford Five Hundred for $299 a month. I can get a new 2005 Infiniti G35 sedan for $399 a month, or a sleek G35 coupe for $425.

And, if I want to live like a Pennsylvania gaming commissioner, I can get a 2005 BMW for $499 a month and have spending money left over, or pick up a new Z4 2.5 BMW Roadster for $569, and still have money to spend on the girls who would flip over it.

It may be that Pennsylvania gaming commissioners want Mercedes, which come a little higher, but as long as the public is picking up the tab, why not?

Eating at the public trough is a delight at any time. One of the new commissioners, after attending the gaming board’s first two formative meetings, said he didn’t realize it was going to involve so much work.

It’s a dirty minefield out there, commissioner. There will be days when, after just a few hours, you will want to rush out and jump in that $650 state car and head for the country club, just to get away from it all. But somebody has to do it.

Just grit your teeth and make the sacrifice.