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Pennsylvania regulators keep moving the finish line

Sep 23, 2008 7:01 PM

Burnt Offerings by Stan Bergstein | Bureaucrats, wherever their caves are located, delight in crawling out and demonstrating their Flintstone mentalities whenever an opportunity arises.

This is not a geographic phenomenon. It is worldwide, and last week some in Pennsylvania did their Fred and Wilma imitation.

Centaur Gaming of Indiana obtained a racing license from the Pennsylvania Harness Racing Commission a year ago – the last one that can be issued in the state by law – after a legal battle. The company began ambitious plans for a $400 million entertainment complex with a mile racetrack and racino in Lawrence County in western Pennsylvania near the Ohio line. In due course it unveiled drawings of an ultra modern, state-of-the-art gaming Taj Mahal.

It also began negotiations for financing the expensive project.

Lawrence county officials and residents welcomed the idea of the track and racino, to be called Valley View Downs. Centaur’s rival for the last license, graciously acknowledging defeat, pitched in by announcing his intention of building another mammoth entertainment venture, a water park with shops, restaurants, the whole shooting match, at Centaur’s site on land he owned there.

Happiness reigned.

Except for one thing: The Pennsylvania Gaming Control Board had to issue a gaming license for the racino. Without it, the project had no chance to fly, lacking outside financing.

The Gaming board stalled, postponing one decision after another, first claiming it had to investigate the backgrounds of Centaur officials, who were already licensed by Indiana and Colorado, where they operate a going racetrack and racino at Hoosier Park, in Anderson, Indiana, and casinos in Colorado.

Centaur had a July 15 deadline to meet in New York to finalize its financing. This was no secret, and the Gaming Control Board knew the date full well.

On July 10, five days before the deadline, the board denied a conditional license, saying it was not denying a license in the future, knowing "the future" hinged on its approval. The board’s release at the time said "the background investigation of those persons who control the slot machine license must be completed prior to licensing the casino facility." This a year after the state harness racing commission had approved Valley View Downs.

As financial conditions worsened, Centaur found itself in a bureaucratic bind.

Last week it announced it was returning monies to banks, unable to break thru the bureaucracy, but it intended "to vigorously pursue" the project and was "fully committed to do everything in its power to help ensure that the track and racino would be built at its current site."

A spokesman for the Gaming Control Board, a functionary named Doug Harbach who carries the title of Director of Communications, last week insulted everyone’s intelligence by telling the Pittsburgh Tribune-Review that, "We do not have all the information we need to move forward with Centaur’s license. We were still awaiting additional information on their financing."

Suddenly it was not a background check on individuals. It was "information on their financing," which the Gaming Control Board held as a stranglehold on advancing the project.

Gov. Ed Rendell appointed the six-person crew that runs his gaming control board. Rendell was the prime mover who gave Pennsylvania slots, and he should not tolerate this kind of monkey business of bureaucratic hide-and-seek depriving Lawrence County of needed economic aid and Pennsylvania residents of property tax relief, his rationale for slots in the first place.

Rendell should not allow a state agency to talk about a group’s financial ability when it knowingly and deliberately cuts off that ability by its actions.

It would appear that powerful forces in Pennsylvania do not want Centaur licensed. It holds the last racing license, however, and the harness racing commission that issued that license is not about to revoke it, and recently gave Centaur until 2010 to get operational. No one else can get the license, and the responsibility for the loss of state revenue falls directly at the door of the gaming control board.

I am not a neutral observer of this scene. Centaur is a respected member of Harness Tracks of America, an association I run. I know its principals and its problems, and Centaur – and the state of Pennsylvania – deserve better than they are getting from the Pennsylvania Gaming Control Board.

The lessons of this kind of administrative duck and dodge are germane to Nevada, for no other reason than that Nevadans should be thankful for the controls in place in their state. The Nevada Gaming Commission and State Gaming Control Board have maintained confidence in the huge Nevada gaming industry, no easy task with the behemoths involved. They have been proactive on change and progressive innovation, and their transparency is in sharp contrast to the conduct of their Pennsylvania counterpart.

Count your blessings.