With accusations that a back-room deal is in the making, Pennsylvania lawmakers went home for the weekend after the House passed its version of a gambling expansion bill that faces a dubious future in the Senate.
Knowing that there was strong opposition to any kind of bill that granted racetrack slot machines to more than the eight listed in the previously approved Senate proposal, the House members voted favorably on two bills.
The first approved slot machines at 11 locations, including two that would be located in Philadelphia and in Pittsburgh, and the second outlined how the gaming revenue would be distributed among the 501 school districts.
Some support for the Senate bill was soft to begin with and the possibility of increasing the number of gaming outlets from the currently legislated eight racetrack licenses placed the entire program in jeopardy, insisted some Senate leaders.
However, anti-gaming forces felt the entire process was pre-ordained so that racino supporters, including Gov. Ed Rendell, could meet privately to work on a compromise.
Rendell originally proposed the racetrack slots as a means of raising budgetary funds that would reduce the need for increases in state income and sales taxes. Also, additional monies would be raised to assist school funding, thus eliminating the need for increases in real estate taxes.
The two publicly-traded gaming companies that would benefit from slots being added to their live racing operations ”” Penn National Gaming Inc. (PENN) and Magna Entertainment Corp. (MECA) ”” saw their share prices rise on Monday, even though favorable legislation was still far off. Penn National closed up $1.52 to $21.63, an increase of 7.55%, while Magna Entertainment gained $0.13 to $4.32, a boost of 3.10%.
The Senate is not expected to reconvene until July 28 and there was no date set for it to reconsider gambling legislation.
Under the House-passed version of the slots bill, the state would receive 34% of the gaming revenue with the tracks retaining 46%. Another 18% would be earmarked for an increase in racing purses while 2% would be turned over to the local communities.
As for the two locations that would be outside the racetracks, the slot licenses would be available to any group willing to pay $50 million for a license. Responsibility for granting the licenses would fall to a five-member state gambling board that would be created by the governor, who would have one appointee with the other four named by legislative leaders.