Racinos, so far, skate by Pennsylvania’s budget squabble

Jul 10, 2007 8:17 AM

Pennsylvania state residents found themselves without a number of services on Monday as politicians butted heads over a state budget.

But, at least for the time being, the state’s racinos were not forced to shut down, thanks to a judge’s order to temporarily keep the slot machines functioning.

That was a step better than what was experienced last year when New Jersey Gov. Jon Corzine held a similar confrontation with legislators over the state budget. The casinos were forced to shut down for nearly a week while the budgetary matters were resolved.

The furlough of thousands of state workers in Pennsylvania was ordered by Gov. Ed Rendell late Sunday when last minute negotiations failed to settle the budget dispute. At the time, Rendell apologized to state workers and residents and added that he hoped the shutdown was only a one-day situation..

Rendell said he was optimistic by weekend meetings that the shutdown, involving some 25,000 state workers would be short-lived.

If the shutdown lasts beyond a few days, it could impact the five racetracks currently operating slot machines. They are Philadelphia Park Racetrack and Casino in Bensalem; Harrah’s Racetrack and Casino in Chester, owned by Harrah’s Entertainment Inc. (HET), Erie Racetrack and Casino, operated by MTR Gaming Group Inc. (MNTG); Mohegan Sun Pocono Downs Racetrack and Casino, and the Meadows Racetrack and Casino, recently opened by the Las Vegas gaming entrepreneurs Bill Paulos and Bill Wortman.

The employees of the Pennsylvania Gaming Board are considered "non-critical" to state functions and therefore would have become furloughed under the state order had the judge not intervened.

The gaming officials noted that if the slots were turned off patrons could not return to them immediately after a budget agreement was reached. The reason, they said, was because the 9,000 slot machines are tied to a central control computer system that calculates taxes in real time and cannot simply be put on "pause." When the machines are turned on again, an official said, each machine is checked to make sure it is online.

Each day the machines operate, the spokesman said, the state rakes in $1.7 million in tax revenue.

Decision reversed

Officials of American Wagering Inc. (BETM) have announced that the Ninth Circuit Court of Appeals had reversed a previous lower court ruling in the case involving money due to Michael Racusin of M. Racusin & Company.

The breach of contract ruling, issued by the U.S. District Court in Nevada, had found that a previous judgment against American Wagering Inc. was subject to subordination under the previous plan of reorganization.

In its action, the Ninth Circuit not only reversed the ruling but also ruled that no further petitions for rehearing may be filed.

As a consequence, American Wagering has established a payment plan that begins in the August, 2007 to January, 2008 period and ends in the February 2012 to July 2012 period.

Changing suits

Boyd Gaming Corp. (BYD) has announced the appointment of two new members of its management staff for the Borgata Hotel Casino & Spa in Atlantic City.

Named vice president of hospitality was Jay B. Rosenthal, a longtime executive in the hospitality field. Nicolas Kurban, formerly the director of Fine Dining for Wynn Las Vegas, was appointed vice president of food and beverages.

The two new members of the team will join recently appointed Dave Coskey, vice president of marketing and Drew Schlesinger, vice president/general manager for The Water Club.

Jennifer Dunne, who joined Wynn Resorts Ltd. (WYNN) a year ago to head the company’s entertainment and marketing sales division, has been named vice president of public relation and advertising. She replaces Denise Randazzo who left the company to form her own firm.

Dunne has held positions in Las Vegas and in Singapore with Cirque du Soleil and oversaw marketing activities for Celine Dion’s A New Day at Caesars Palace.

Dealing with its Macau operation, Wynn Resorts recently announced that Grant Bowie has left his post as president of Wynn Macau and will be succeeded by Ian Coughlan.

And at Nevada Gold & Casinos Inc. (UWN), Harold T. Winn has resigned his position as chairman of the board of directors but will remain a member of the board.

Critical report

Groups that have applied to take over the racing franchise in New York were criticized in an intensive report made by the New York Office of Inspector General.

The report, requested by Gov. Eliot Spitzer, found "general areas of concern" with four of the applicants.

Of particular concern were the companies’ ties to rebate shops as well as individual lawsuits involving key players. Also noted were what was described as "sizable contributions" to some of the New York political leaders.

It was not expected that Spitzer would make a decision as to the bidders in the near future.

New Margaritaville

Members of the Biloxi Architectural Review Commission have approved the plans for the new Margaritaville being built by Harrah’s Entertainment Inc. (HET) in an arrangement with Jimmy Buffet.

The Biloxi casino’s cost has been set at $700 million. It will be located on 47 acres of land that are owned by Harrah’s.

Buffet, the chief "parrothead" is a native of nearby Pascagoula, Miss.

The project, expected to open in 2010, is being guided by Marnell Corrao Associates of Las Vegas.

THE INSIDER: Cash Systems Inc. (CKNN) said Monday it had negotiated a multi-year contract renewal with Chippewa Check Services, a wholly-owned entity of the St. Croix Chippewa Indians of Wisconsin.

Isle of Capri Casinos Inc. (ISLE) has opened its latest casino, "the isle casino at Coventry," bringing the company’s newest brand to the United Kingdom.

Churchill Downs Inc. (CHDN) reported that the recently concluded race meeting in Louisville saw increased attendance on-track but a decline in off-track betting. The latter was caused by the company’s termination of an agreement that permitted TVG and UBET to carry the track’s racing product.