Pennsylvania gaming tops $1B mark

Dec 31, 2007 4:23 AM

Vincent Fumo, a Democratic state senator from Philadelphia, was one of the most ardent supporters of the gaming bill that was passed in Pennsylvania in 2004. Although it took a couple of years of haggling before the gambling actually became a reality, Fumo and his associates can now take their bows.

In mid-December, the state’s six slot machine facilities saw their gross revenue surpass the $1 billion mark. More than half of that revenue is being used to help local governments, increase the number of volunteer firefighters, beef up civic developments and help the horse industry by offering greater purses.

And, say supporters, there will be more good news down the road as Hollywood Casino is opened at Penn National Racetrack in Grantville and later at three full-fledged casinos scheduled to be opened in Philadelphia, Pittsburgh and Bethlehem.

"When we passed it (the gaming legislation)," Fumo was quoted as saying, "we said it was going to be the most far-reaching and important legislation we passed in the last 30 years. And it is."

Despite critics who contend that the gaming law has created more gambling addiction, personal tragedy and ruined lives, state revenue from gambling emporiums has injected more than $100 million into rent and property tax subsidies for low-income seniors. That number is expected to increase to several hundred millions of dollars when all the casinos are operating.

It all seems to benefit the politicians who favored gaming expansion. When they come up for re-election they have a beneficial story to tell.

Fumo, for instance, is being opposed by a gambling opponent, Anne Dicker, who points to local businesses who she says are hurting because of the lost business they have encountered because of the casinos.

The Pennsylvania gaming success story has also spread to neighboring states, such as Maryland, whose legislature has been unable to agree with Gov O’Malley who has proposed permitting limited slots activity around the state. Joining him in the appeal have been representatives of the Maryland Jockey Club, owned by Magna Entertainment Corp. (MECA) who warn that there will no future for the tracks since they can’t compete without slots revenue.

Also strongly aware of the newly-developed competition are the racetracks in Delaware and West Virginia where slots revenues have declined because of the Pennsylvania competition.

And, in Atlantic City, casino revenue has fallen consistently throughout the calendar year because of racino competition in both Pennsylvania and New York.

Not all of the news out of Pennsylvania has been on the bright side. True to any new enterprise of this magnitude, there have been disputes. In Pittsburgh, Detroit entrepreneur Don Barden fought several lawsuits brought by rejected license bidders and by major league sports teams who feared an invasion of their parking facilities.

A denied harness racing license applicant had the denial overturned by the courts as did the owner of the Mount Airy Casino Resort in the Poconos who allegedly had ties to organized crime.

Still to be adjudicated is a suit charging that Philadelphia officials usurped the state’s authority by issuing a license to build part of a slot-machine casino over the submerged banks of the Delaware River.

That suit involves the Sugarhouse Casino, a property being built by the Mashantucket Pequot Indian Tribe, owners of Foxwoods Resort Casino in Connecticut and its partners.

Lawyers for Sugarhouse contend that a 1907 state law gives the city the right to determine how to develop its own waterfront.