Penn. lawmakers amend slots law

Oct 31, 2006 3:07 AM

It took the state of Pennsylvania two years to produce a law that will permit up to 62,000 slot machines to be installed in racetracks, stand-alone casinos, and resort areas but the mechanism is finally in place.

An amendment to the previously passed bill, approved by unanimous vote in the Senate, sits on the desk of Gov. Ed Rendell. The bill, strongly fought by the House and Senate, provides remedies to some of the original bill that drew criticism.

The new bill requires the Attorney General’s office to set up a gambling-crimes unit; wipes out a requirement that slot-machine manufacturers sell their merchandise through designated in-state distributors, and deletes language that allows public officials to directly own up to one percent of a gambling interest.

Missing from the bill was the sought-after provision that would have banned political contributions from gaming applicants.

So far, the state Gaming Control Board has licensed six racetrack operators: Pocono Downs, now owned by Mohegan Sun; privately-owned Philadelphia Park in Bensalem; Harrah’s Chester Casino and Racetrack; Penn National Race Course; The Meadows harness track that was recently purchased by two Las Vegas gaming entrepreneurs — Bill Paulos and Bill Wortman, operators of The Cannery Hotel/Casino in North Las Vegas — and MTR Gaming Group for its proposed Presque Isle Downs in Erie.

Whether the operations can overcome a 50% state tax on gaming revenue is still being questioned by industry experts.

Deal problem?

Aztar Corporation (AZR) wants to sell the company to Columbia Sussex Corporation.

Columbia Sussex has had problems with the gaming regulators in Missouri so it told Aztar to sell its riverboat in Caruthersville, Missouri, before it will go forward with the AZR acquisition.

Aztar agreed and made a deal with Fortunes Entertainment LLC for the Caruthersville riverboat but last week the Missouri Gaming Commission announced the sale would not be completed by Nov. 19, the deadline established by Columbia Sussex.

In order to insure that the riverboat does not close because of the regulatory problem, the commission said it wanted Aztar to appoint a supervisor who will take over administration of the casino on Nov. 18 in order to avoid a shutdown.

Aztar officials have indicated they do not expect the Missouri problem to affect its arrangement with Columbia Sussex.

Casino for sale

Looking to concentrate its efforts on its core business that focuses more on slot technology and systems, Bally Technologies Inc. (BYI) has indicated it may sell a casino it owns and operates in Vicksburg, Miss.

The company has hired Credit Suisse Securities LLC to evaluate the potential sale of Rainbow Casino. In recent times, the company has disposed of two slots routes and a casino in Sparks, Nev. It also sold its interest in a machine manufacturer in Germany.

Richard Haddrill, company CEO, said the company feels it should "fully allocate our capital and management attention to the continued growth of these (core) businesses."

Because of the problems created by the hurricane along the Gulf Coast last year, casinos in Vicksburg prospered in the wake of the storm.

"We value our Rainbow team and believe the property has developed a solid reputation as a highly effective competitor in the Vicksburg market," Haddrill said, indicating that there were no assurances the casino would be sold.

Earnings

The following companies have indicated they will be releasing their quarterly financial reports during the next few days. They are:

Magna Entertainment Corp. (MECA) on Thursday at 7 a.m. PST.

WPT Enterprises Inc. (WPTE) on Thursday after the market closes.

Scientific Games Corporation (SGMS) on Thursday after the market closes.

Lakes Entertainment Inc. (LACO) on Friday at 11 a.m. PST.