The politics of greed could delay the opening of slots parlors in Pennsylvania until late 2007, state gaming regulators have warned.
The dispute surfaced last week when a year-old disagreement between two members of the Pennsylvania Gaming Control Board regarding the method in which gaming machine distributor licenses are to be granted became a major topic. One member insists the distributors should be able to work the entire state while the other wants to restrict the sales to certain districts.
Timing is important because a two-year exemption from the normal state review process expires on July 5.
If no agreement is reached before then, the licensing process could be delayed by a year or more.
The hangup appears to be strictly political, said one observer. Although the legislature approved licenses for 14 slots parlors, it also required, because of the insistence of Democrats who agreed to support the bill, that the manufacturers sell their machines through in-state middlemen, thus paving the way for some plum jobs.
Now, a Democrat member of the gaming board wants to insure that even more jobs will be available by restricting the machine sales to specified regions. Republicans oppose the effort, pointing out that one of the state’s best-known lobbyists is a major investor in one of the more than 20 groups seeking distributors’ licenses.
Meanwhile, slots parlor hopefuls, including some of the country’s leading gaming companies, sit and wait. Among these are Bill Paulos and Bill Wortman’s Millenium Gaming and their partners who are in the process of buying The Meadows harness track from Magna Entertainment Corp. (MECA), and the Mohegan Indian Tribe of Connecticut, recent purchasers of Pocono Downs harness track from Penn National Gaming Inc. (PENN).
Additional amenities and increases in the prices of building materials have caused the board of directors of Pinnacle Entertainment Inc. (PNK) to boost the budget of a casino resort under construction in St. Louis, Mo.
The announcement on Monday indicated that the budget was raised from the previous $350 to $430 million. Among the improvements being factored in are a nightclub, parking and site improvements and retail stores.
A final agreement with the project’s general contractor is expected within the next 30 to 60 days.
Dan Lee, company chairman and CEO, noted that "Since our original efforts in the area began, the St. Louis gaming market has shown solid growth and the revitalization of the downtown area has continued, including the recent opening of the new Busch Stadium, approximately 10 blocks from our site."
Hold your horses
Illinois Gov. Rod Blagojevich thought he could help his horse racing friends by having the casinos contribute to a fund that could be used to boost track purses. He got the state’s lawmakers to pass a bill that permitted him to play gambling’s Robin Hood.
The legislature passed the Horse Racing Equity Trust Fund calling for four casinos to ante up 3% of their adjusted gross revenue for two years. The moneys would then be divided by the Illinois Thoroughbred and harness tracks based on their total purse money distributed during the previous year.
Obviously that didn’t sit well with the casinos in Joliet, Aurora and Elgin owned by Harrah’s Entertainment Inc. (HET), Penn National Gaming Inc. (PENN) and Hyatt Corp. They ran to the courts seeking an injunction that was granted immediately.
The riverboat operators argued the special tax on just those four companies would violate gaming laws.
THE INSIDER: Good news for the Atlantic City casinos developed Monday when the New Jersey Transit Authority agreed to set up train service from Midtown New York City to the New Jersey gaming playground. If all goes according to plan, train service could begin by late 2007.
Penn National Gaming Inc. (PENN) has advised the Securities and Exchange Commission (SEC) that it has terminated its outside auditor, BDO Seidman LLP and replaced it with Ernst & Young. The decision was made, the company said, because of Ernst & Young’s experience with gaming companies.
Joe Greff, chief gaming analyst for Bear Stearns, has upgraded the shares of Ameristar Casinos Inc. (ASCA) from under perform to peer perform. He said the shares were traded at a more comfortable level since it reporting its first quarter results.
Ameristar Casinos said it will report its second quarter earnings on Wednesday, July 27 at l p.m. PDT.
Lakes Entertainment Inc. (LACO) says it has entered into a $105 million credit agreement through a wholly-owned subsidiary of Banc of America Securities.
Analysts at Deutsche Securities have downgraded the shares of Harrah’s Entertainment Inc. (HET) from a buy to a hold.
Also, Deutsche Securities analysts have upgraded the shares of International Game Technology (IGT) from hold to buy.
Meanwhile, IGT has declared its quarterly dividend of $0.125 per share to be paid on July 11 to shareholders of record on June 27. The company added that it is trying to acquire the gambling technology firm Venture Catalyst in a deal valued at $21 million.
Progressive Gaming International Corp. (PGIC) says its CasinoLink Jackpot System has been granted initial approval by New Jersey gaming
A Louisiana House committee has approved a Senate approved bill that would permit Churchill Downs Inc. (CHDN) to install 700 slot machines at The Fair Grounds racetrack in New Orleans. The bill now goes to the House floor for consideration.
The Harrah’s Employee Recovery Fund has distributed $2.1 million in assistance to nearly 2,800 current and former employees of Harrah’s Entertainment Inc.
Boomtown Biloxi casino, substantially damaged by Hurricane Katrina, will reopen on Thursday, June 29, according to owner Penn National Gaming Inc. (PENN).
Rebuilding work on the Hard Rock Hotel & Casino in Biloxi is expected to begin next week. The property was completely destroyed by the hurricane.