A crucial deadline

Then again, I guess it wouldn't be called a deadline if it weren't crucial, right?

"After a series of starts and stops, the future of the proposed North Shore casino faces its most critical deadline this week. The state Gaming Control Board must decide whether to approve transferring the Pittsburgh license from Don Barden, who was unable to complete financing, to a group headed by Chicago billionaire Neil Bluhm. Mr. Bluhm said last week that Credit Suisse, which had given Mr. Barden a $200 million bridge loan to get the project started, could force the project into bankruptcy as early as Wednesday. Mr. Bluhm said he's willing to take over the project and keep all of Mr. Barden's commitments but won't act on the bridge loan payment until he is sure his group has the license."

... Here's a tidbit you may not have known -- "deadline," in its original usage, is a reference to the sprawling Civil War military prisons, which often weren't really prisons at all, in that many of the prisoners weren't confined by walls or iron bars. Instead, prisoners-of-war were informed of the rough perimeter of the camp. If you crossed that "dead-line," you were literally shot dead. It's not known whether the current, newspaper-ish meaning of the word arose from the Civil War usage, or evolved separately.

... While we're at it: casino, 1744, "public room for music or dancing," from Italian casino, dim. of casa "house," from Latin casa "hut, shed," of uncertain origin. The card game is attested by that name from 1792.

... And: gamble, 1726 (implied in gambling), from a dialectal survival of M.E. gammlen, variant of gamenen "to play, jest, be merry," from Old English gamenian "to play," from gamen (see game). Or possibly gamble is from a derivative of gamel "to play games" (1594), itself likely a frequentative from game. 

Enough with the book learning.  

... The latest: "Mayor Luke Ravenstahl and Allegheny County Chief Executive Dan Onorato will meet with top Pennsylvania Gaming Control Board officials [Tuesday] to discuss the status of the stalled North Shore casino project. Mr. Onorato wants to know when the board will decide whether to transfer the Pittsburgh slots license, awarded to Don Barden in December 2006, to a new group headed by Chicago billionaire Neil Bluhm, spokesman Kevin Evanto said. 'I think he wants some basic answers. He wants to know the timeline they're operating on, some idea when they might have a full board meeting to approve or reject or whatever they're going to do with Mr. Bluhm,' Mr. Evanto said. 'Obviously it would be in everybody's interest to have a decision sooner rather than later.'"

Or at least it would be in Neil Bluhm's and Don Barden's interest.

... Oh, wait -- maybe it would be in everybody's best interest:

"What if the deal falls through? And what about the money promised for the Pittsburgh Penguins' new arena? WTAE Channel 4 Action News reporter Bob Mayo has confirmed that Pennsylvania taxpayers are the bill payers of last resort if the casino doesn't help pay for the arena ... 'All the revenue streams that support the arena financing are back-stopped by a commonwealth lease of the new facility. That would guarantee that the debt payments will be made,' Rendell spokesman Chuck Ardo said Friday."

... While we were out last week, the P-G's Tom Barnes checked in with Neil Bluhm and followed up on Rep. Dwight Evans and his conversations with two gaming board members, conversations that were possibly forbidden under state law:

"State Gaming Control Board Chairwoman Mary D. Colins said she didn't feel 'intimidated or threatened' by a 60-second phone call from state Rep. Dwight Evans, who stressed the importance of continued black ownership in a planned Pittsburgh casino." 

Recession-proof

Still don't believe that Don Barden's troubles are shared by casinos across the country?

"The realization -- after years of steady, healthy gains -- that the gaming industry isn't immune to the distress of a troubled economy couldn't have come at a worse time for Massachusetts. 'It's ugly,' Andrew Zarnett, gambling analyst with Deutsche Bank AG of New York, said of the revenue losses and declining stock prices that have thrown the industry for a loop. 'There's an overall uncertainty in the economy and gaming is feeling the impact. It's really bad.' From southeastern Connecticut to Atlantic City to Las Vegas, gaming operators are pulling in less revenue, leading to dramatic declines in stock prices for many of the companies that would be interested in developing the types of resort casinos envisioned by Gov. Deval Patrick."

Or the types of casinos envisioned by Gov. Ed Rendell. We're not saying the national troubles mean the state gaming board should cave to Barden & Bluhm -- but we understand why the duo is holding a gun to the gaming board's head in the first place.

Odds and ends

Casino revenue means reduced property taxes in Lancaster ... Who wants to operate a casino in Kansas? Anybody? Anybody? ... Courts will ultimately settle whether Indians can run a casino in Buffalo, N.Y. ... More on the new push to build a casino near Gettysburg, Pa. ... Illinois has been fighting the gambling slump by allowing for "tighter" slot machines.

Good to know that Pennsylvania isn't the only state dealing with a casino operator with alleged mob ties:

"Macau's oldest gambling company acknowledges its policies to prevent money laundering may not be working. It admits the possibility its patrons, in collusion with employees, may be cheating or committing fraud ... These are not your typical corporate disclosures. Then again, SJM Holdings isn't your typical casino company. It's controlled by Stanley Ho, a colorful and controversial Asian gambling magnate who for years has fought allegations he has ties to the Chinese mob. Now, the filing has become the latest in a long list of items New Jersey investigators are scrutinizing as they determine whether to sign off on MGM Mirage's partnership with Ho's daughter, Pansy, for a $1.25 billion Macau casino."

Party Line

Ed King: Welcome to Party Line, caller.

Ed Rendell: Is this Don Barden?

Ed King: No, this is Ed King. You're on Party Line.

Ed Rendell: Oh, sorry. I must have the wrong conference call.

Don Barden: Ed? Is that you?

Ed King: Speaking. Welcome to Party Line.

Don Barden: I meant the other Ed.

Ed Rendell: Don?

Dwight Evans: This is Dwight.

Wendy King: Dwight, welcome to Party Line. What's on your mind? 

Neil Bluhm: Um, I was calling ... is this the thing about the casino?

Ed King: The casino, the Pirates, any and all salmagundi, caller.

Don Barden: Neil? Thank God it's you. I'm in Detroit and -- funny story, really -- I lost my wallet. All the credit cards and everything. Could you wire me like $120 million?

Ed King: OK, we have Baron Figtree on the line. Go ahead, Baron.

Baron: Yeah, about the Pirates. I was reading that they might trade Xavier Nady for David Price and Jake McGee. I mean, if I'm the GM, I'm pulling the trigger on that trade yesterday. Yesterday. Dontcha think? I'll hang up now and listen to your answer.

Wendy King: Well said, caller. And now it's time for our Party Pretzel: What is the name of the Scranton businessman and casino operator who was indicted on perjury charges in January of this year? Call us at EXpress1-1038 for your prize.

Ed Rendell: Wait, give me a sec. I totally know this one.   

... With that nonsense out of the way, on to today's news:

"Republicans and Democrats alike are criticizing a flurry of last-minute phone calls among casino investors, state gaming board members and Democratic politicians, all in advance of a deal moving Pittsburgh's casino project out of Don Barden's hands. State Rep. Dwight Evans, chairman of the House Appropriations Committee, said yesterday that he, Gov. Ed Rendell, Rendell Chief of Staff Greg Fajt, Don Barden, and Mr. Barden's new business partner, Chicago billionaire Neil Bluhm, discussed the impending deal twice by conference call on Monday. The deal, which gives Mr. Bluhm's outfit 75 percent control of the Pittsburgh casino in exchange for $120 million in cash, was signed Wednesday. Mr. Evans, D-Philadelphia, also said he discussed the deal by phone with Pennsylvania Gaming Control Board member Jeff Coy and board Chairwoman Mary DiGiacomo Colins, and fielded calls from Mr. Barden himself on Sunday."

What's the hubbub? The gaming law's prohibition of "ex parte," off-the-record conversations regarding matters that may come before the gaming board:

"The 2004 gaming law's code of conduct (section 1202.1) [says]: 'A member of the board shall not engage in any ex parte communication with any person [and shall] avoid impropriety and the appearance of impropriety at all times and observe standards and conduct that promote public confidence in the oversight of gaming.'"

... The Trib reports: "Negotiations between Barden and Bluhm over control of the casino had hit 'some sticking points,' said Rendell spokesman Chuck Ardo. Participants declined to specify what was bogging down the talks, which they had hoped to complete the previous Friday ... Rendell's long-time relationship with Bluhm was 'critical' to getting the deal done, Ardo said. 'His role was simply as an intermediary,' Ardo said. 'He attempted to smooth out whatever rough spots remained toward the end of their negotiations, and clearly he was successful.'"

... You've read about the 75-25 split of the North Shore casino, with Bluhm & Co. taking 75 percent and Barden & Co. retaining 25 percent, but this is your first look at exactly how those two ownership blocs will be divided among the many stakeholders within the newly formed Pittsburgh Gaming Holdings, LLP. The Pittsburgh casino reorganization is detailed starting on page 8.

Of interest:

- Barden's 25 percent share is really a 20 percent share -- 2.5 percent of his chunk is an investment from the Police and Fire Retirement System of City of Detroit, and another 2.5 percent comes from the General Retirement System of City of Detroit. 

- The Bluhm & Co. share, Pittsburgh Gaming Investors, is split like this -- 68.625 percent to Walton Majestic Star Holdings VI, 22.242 percent to High Pitt Gaming, 8.3 percent to Cira Pittsburgh Gaming Investor, L.P., 0.5 to Pittsburgh Gaming Investors GP, and 0.333 to an outfit named HPP, LP. Greg A. Carlin, Ira Lubert, and numerous of trusts and real estate funds are named on the ownership list.  

From the mailbag

You send the e-mails, we print the parts without the swear words. Keep them coming at btoland@post-gazette.com (or, if you want to get really kooky, sign up to use our commenting features via this link):

"I have never felt very comfortable with Mr. Barden, he reminds me of a carpetbagger. I find it amazing that the parking garage that was under question has made it up to 10 floors, while the casino itself is a steel shell." 

"Hooray for the bi-partisan efforts of Ferlo and Orie to push for re-opening the bidding process ... If control of Pittsburgh's casino venue is awarded to the same group that now controls casino operations in Philadelphia, the whole idea of gambling as a revenue source becomes less transparent and is in the hands of too few."

"I think our two senators have done what many have thought about [in proposing to strip Don Barden of his casino license].  Now it is time for the commission to act accordingly."

"The new  deal should FIZZLE. This whole scenario is beginning to smell like three-day-old dead fish. This board will rubber-stamp this new deal without any investigation. That seems to be standard operating procedure for them. Barden should not own one crumb of this, let alone 25 percent. The board should refund his $50 million. If Bluhm wants the Pgh location, let him shell out $50 million more."

"So, Mr. Barden did not really have the wherewithal to execute on his plan, and now he is not even the winner that the state / city thought they picked, because he has lost control. I have been following this since the beginning and his finances have always seemed suspect (but we are all happy to have a new arena and keep the Penguins)." 

"Unbelievable. So, now elected officials will unabashedly get involved to preserve a single investor's stake in a casino? The majority Chairman of the House Appropriations Committee, who controls the annual budget of the gaming board, engaging in a conversation with a Board member on behalf of Don Barden, a troubled casino investor and working to obtain 'assurances' on behalf of new investors? I wonder what Evans did to prevent Barden from being totally removed from the deal?"

"To have some high roller with capital step in and 'buy' the rights precludes anyone else who could offer the taxpayer a better deal. It is incumbent on the gaming board to get the best deal possible for the taxpayer and this is not it."

Elsewhere in Pennsylvania

Lost amid the Don Barden mess is the slightly smaller Centaur mess in Lawrence County. The would-be racetrack operator said a week ago that it needed a temporary casino license by this week, or else it would be at risk of losing its financing. Well, here we are at the end of this week, and the Indiana-based company is trying save money where it can:

"Centaur Inc. is cutting back on expenses while waiting for word on a slots parlor license. The Indiana-based company, which plans to build a harness racing track and casino in Mahoning Township, parted ways with its Harrisburg public relations firm last week and discontinued or reduced its use of other consulting services, according to Centaur officials. Centaur had been using the services of Rick Kelly of Triad Strategies to providing media relations, Web site setup, fact sheets and other work for the Valley View Downs project. Kelly said Monday that as of late last week, the company no longer works for Centaur."

That's from the New Castle News. But IBJ says there may be a ray of hope.

... Bethlehem, Pa., is rubbing our noses in it:

"Bethlehem already is reaping the benefits of the Sands Bethworks Casino, even though it won't be completed until next year. The last beam of its steel structure was set in place near the end of June, which means the construction is ahead of schedule. The city already is gaining revenue ... While this casino project is doing well on just about all accounts, the same cannot be said for other casino projects that are struggling through birth pangs elsewhere in Pennsylvania ...the board's decision on Sands as the Bethlehem licensee it looking better all the time." 

Battle of Gettysburg, Redux

Remember the big to-do over the Gettysburg casino? And how all the battlefield preservation types were worried that the casino would be bad for toursim and that drunken revelers might wander into Devil's Den and start knocking over monuments just for the hell of it? And how the casino people said, Aww, pish, that's not gonna happen, and besides, we're gonna dress it up real nice and have a spa and everything?

No?

Well, that guy is back -- but he's learned from his mistakes:

"David LeVan wants to try again. The man whose plan to build a casino near Gettysburg drew national attention and significant local opposition in 2005 and 2006 said Wednesday he has the financial backing he needs to take a second shot at securing a slots license for Adams County. LeVan said he intends to do exactly that if a license becomes available - something that seems increasingly likely. Investors in Valley View Downs, a proposed Lawrence County casino and horse-racing facility, are struggling to refinance the $455 million project before the state Gaming Control Board finishes its investigation and decides whether to grant them a license. If investors in Valley View Downs are forced to withdraw their application, 'then I will get very aggressive,' LeVan said. 'I wanted to send a message that if they don't, I can,' he said. 'There is an alternative out here.' This time around, LeVan's proposal will include plans for a horse-racing facility and be located somewhere in the southern part of the county -- away from the Gettysburg battlefield and near the Maryland line."

That's from The Evening Sun of Hanover.

... Day Two of their coverage:

"His vow to keep future casino proposals away from the Gettysburg battlefield might appease some of David LeVan's former opponents, but the businessman's most vocal critic remains far from satisfied. 'There's no place in Adams County that's far enough away to not contaminate the atmosphere of this community,' said Susan Star Paddock, who headed the local citizens group No Casino Gettysburg, which played a key role in defeating LeVan's 2006 bid to build a slots parlor near Gettysburg."

Maybe she should change the name of her group then -- No Casino Gettysburg Or Anywhere Within a 40-Mile Radius Of Gettysburg.

Odds and ends

Newspaper reporters won't have to testify in the DeNaples grand jury probe ... Will Penn National now focus on buying Ameristar Casinos? ... The New And Improved Mohegan Sun at Pocono Downs is open for business ...  "Officials at Charles Town Races and Slots in West Virginia are again allowing horses to come and go after test results indicated that a sick horse on the property does not have equine herpesvirus-1." .. Jobs to be had at the Greektown Casino in Detroit ... This Inky editorial says Pennsylvania has been rushing its casino industry, to lackluster results. Hard to argue with that, at this point.  

In a pickle

Mayor Luke Ravenstahl has a way with words, specifically the word "pickle." From his press conference today:

"We need to balance the need for obviously opening the casino as soon as we possibly can, with the reality of, we have to get it right this time, because we're in the pickle that we're in now because we didn't get it right the first time."

Get there fast. But take it slow. I could totally go for a strawberry daiquiri right now.

And: The decision gaming board's selection of Don Barden "was obviously a bad decision."

And: "As the mayor of the city, representing the taxpayers and all of the interests of the city of Pittsburgh, I think it's at least reasonable to ask them to sit down and talk with me, talk with the county executive, before they make any decision on the future of the slots license."

And: "There has to be more transparency. The taxpayers and the residents of the city have to know what decisions are being made, why they're being made, who these people are, what their backgrounds are. This was a thorough process that resulted into where we are today."

And: "Should they use the new team, or should they go out for a new operator? It's hard for me to make that decision, not knowing what they have to consider, the Gaming Control Board."

The full story from Rich Lord:

"Whatever happens to the troubled Pittsburgh casino project, the facility should remain on its under-construction North Shore site and all promises to the city, Penguins and neighborhood groups must be kept, Mayor Luke Ravenstahl said in a wide-ranging press conference this morning marking his return from vacation. He said that in spite of an ownership shakeup, he believes a casino could open here next year, bringing promised city revenue. But to make that happen, he wants a series of meetings involving himself, Allegheny County Executive Dan Onorato, the state Gaming Control Board, and the prospective new majority owners of the Majestic Star Casino."

... Along those lines:

"Two Pittsburgh-area legislators are urging state gaming regulators to revoke Don Barden's slots license and award a new Pittsburgh casino license based on "a competitive process that will include new applicants," who would complete what's already been started on the North Shore. State Sens. Jane Orie, R-McCandless, and Jim Ferlo, D-Highland Park, wrote yesterday to Gaming Control Board Chairwoman Mary D. Colins, urging the agency not to rush into approving a refinancing and reorganization plan being sought by Mr. Barden."

... Remember when Don Barden said he would sell his Vegas casino in order to raise cash for the Pittsburgh operation? The Bluhm buyout renders that pledge null and void:

"Don Barden won't need to sell Fitzgeralds to maintain a stake in a slots-only casino in Pittsburgh, but the downtown Las Vegas casino remains an asset he could use to generate cash for his struggling gambling portfolio."

Not that his Vegas assets were guaranteed to fetch anything:

"If Barden did want to sell his Las Vegas property, now is a tough time to put it on the market. In recent months a number of downtown properties have changed hands, including the sale of Binion's to Terry Caudill of Las Vegas for $32 million. But the economic slowdown has investors running away from gambling deals, with even big-name casino stocks such as Las Vegas Sands and MGM Mirage trading at a fraction of what they did late last year."

In case you missed it

Two items from the weekend -- first, a short profile of Chicago billionaire Neil Bluhm (and what's with all these billionaires wanting a piece of the North Shore, all of the sudden?); second, Ruth Ann Dailey's column about the city practicing its poker face:

"There's no need for the wisdom of Solomon when someone as rich as Solomon antes up. Mr. Bluhm's timely arrival should remind our rubber-stamp-happy officials that, even in an economy that supposedly doomed Mr. Barden's undertaking, there's plenty of money to be made here. That's good reason to hold our own at the table. If one developer doesn't like our terms, another will show up soon enough. Over and over again, though, Pittsburgh politicos fail to appreciate what a great hand they've been dealt. I know table games haven't yet hit the banks of the Three Rivers, but really, if they want this to be a world-class city, they're going to have to learn to play world-class poker."

Odds and ends

Penn National, despite its dropping stock prices, is suddenly flush with cash ... The Indianapolis Business Journal gives its take on Centaur Inc. and whether it will be able to preserve the financing deal that would allow it to build a racetrack and casino in Lawrence County ... Maryland continues to pursue slot machines ... The Mohegan Sun at Pocono Downs has won over its neighbors ... The Buffalo, N.Y., casino controversy is bleeding up the lake, to Niagara Falls:

"Niagara Falls Mayor Paul A. Dyster and the City Council bolstered the city’s budget Monday by $500,000 to hire private attorneys after a federal judge ruled last week that a casino in Buffalo can’t legally operate on land owned there by the Seneca Nation of Indians ... The Seneca Niagara Casino & Hotel has operated in Niagara Falls for more than five years without a significant challenge to its legality, but Falls leaders said Monday they want to be prepared [following a court decision] last week that found that a nine-acre parcel owned by the Seneca Nation in Buffalo is sovereign territory, but is not eligible for an exception to federal Indian gaming law that would allow the Senecas to operate an off-reservation casino on the site."

Hey, there's a spot on the North Shore that's just come open. And we're pretty sure the Indians we're living there at one point.

The Majestic Star ...

... b. Dec. 20, 2006, d. July 10, 2008.

What are they going to call this thing, now that Don Barden and his Majestic Star name brand have given up majority control of the casino on the North Shore? We're open to suggestions -- drop a line at btoland@post-gazette.com

... The good news, via the Busman's Holiday, is that the new casino ownership team will be bound to the arena funding agreement that Mr. Barden made, or at least it seems that way: "As part of the proposed transaction, Holdings will honor the conditions of the licensure imposed on PITG, [including] obligations to citizens of Pittsburgh."

Here's the story from the P-G's Mark Belko:

"Nearly 19 months after winning Pittsburgh's sole slots license on his birthday, Don Barden is giving up control of his North Shore casino as part of a deal to secure a critical piece of financing. Mr. Barden is surrendering control to Walton Street Capital Fund 6, an investment firm co-founded by Chicago billionaire Neil Bluhm, and affiliated investors under an arrangement detailed before the Pennsylvania Gaming Control Board yesterday. As part of the deal, Walton Street [will] hold a 75 percent interest in the casino. Mr. Barden will be left with 25 percent, although he will have a chance to increase his share in the future ... The latest deal is bittersweet for Mr. Barden, who shocked many in Pittsburgh and the gambling world by winning the license for the city's casino in December 2006 over two better known and well-financed opponents."

"Well-financed" being the key term in that sentence, I believe. The Station Square location may not have been ideal, but it's hard to imagine that Forrest City and Harrah's would have had such a difficult time lining up the money for the casino.

... says Three Rivers Poker:

"I tell ya, Ravenstahl's got to be [taking a big dookie] in his Underoos about now. Pittsburgh needs the Majestic Star to be a glittering North Shore jewel, complete with packed restaurants, varied shopping options and that fancy river amphitheatre, not some ugly multi-story hunk of concrete that sits lifeless on the river while inside those jonesing for just one more pull on the slot machine fork over their paychecks. Who would you trust in making sure it's the former and not the latter -- the gung-ho businessman who you can look in the eye and remind of the promises he made or the faceless real-estate-fund operators who really just want to recoup their $120 million investment?"

Dispatches from the north

More bad news for another would-be casino operator in Pennsylvania:

"The state Gaming Control Board yesterday denied Centaur Inc.'s request for a temporary slots license so it could start building Valley View Downs, a $425 million racetrack/casino in Lawrence County. Centaur Chief Executive Officer Rod Ratcliff, joined by lawyers Adrian King and William Lamb, told the board that time is critical because Centaur could lose the financing for the project unless it has a conditional, or temporary, license by Tuesday. Mr. King, of Ballard Spahr in Philadelphia, is a former top aide to Gov. Ed Rendell, and Mr. Lamb is a former state Supreme Court justice. 'We are clearly disappointed with today's decision,' said Valley View spokeswoman Susan Kilkenny. 'We will continue to work with our lenders to find a solution that will position us to bring this opportunity to Western Pennsylvania.'"

... That's not what Pennsylvania Real Estate Investement Trust wanted to hear, because it stands to make a mint on the deal:

"PREIT, which owns the Beaver Valley Mall, was initially to develop the Centaur casino at its preferred Beaver County site, and now is in line to be the main developer of the Lawrence County track. [But a 2007 compromise between Centaur and the Carmen Shick family meant] 'PREIT has waived and terminated its rights to purchase the property contemplated for the racetrack and casino or to purchase an alternative location, and its right to ground-lease such site to Valley View,' the SEC documents say. But there's a consolation prize: 'In consideration of PREIT's waiver and termination, Valley View [will pay] PREIT $57 million over nine years, payable $250,000 per month from March 1, 2010 to February 1, 2019, plus a final payment of $30 million payable on March 1, 2019,' according to the SEC documents."

Not a bad payday.

... The Trib-Review says the whole deal may go up in smoke as a result.

... Before we vilify Barden and Centaur (whoops, too late), we'll once again remind you that this is an industry-wide phenomenon, and while it's more likely to affect the intermediate operators, some big players are feeling the effects, too:

"In Atlantic City, N.J., developers of the $2 billion Revel casino and hotel are seeking financial help from the city, which will consider floating bonds, and Pinnacle Entertainment Inc. is questioning whether the wisdom of borrowing money for its $1 billion-plus casino project on the site of the razed Sands Hotel Casino. Casino companies have lost billions in market value. The falling share price of Penn National Gaming Inc. helped tank the nearly $6 billion purchase of one of the nation's largest casino companies by a private equity firm last week. Indian casinos are not immune, either: The huge Foxwoods Resort Casino in Connecticut recently laid off workers because of rising gas and food prices."

... And it's not just that the borrowing window has closed. Investors and players have soured, too:

"Casino stocks were battered again Thursday, with shares of the big players scraping to multiyear lows on the back of news of a precipitous drop in Nevada's gambling revenue ... On the Las Vegas Strip, [total] gambling revenue fell 16.4% -- the largest decline yet in 2008, and one that is at an increasing rate as quarter-to-date revenues for the Strip are off 9%."

Dispatches from the east

Atlantic City had one decent month, but a bad June is foreboding:

"A nasty June swoon at the resort's 11 casinos could be evidence that Atlantic City is heading for a second straight down year in terms of revenue. The gambling halls took in $373.6 million in June, an 11 percent decrease over the same month a year ago. Only one of the 11 casinos saw revenues increase last month, and of the losers, eight posted double-digit declines. [Experts] say the size of the decline may be too steep to be offset by July and August crowds -- traditionally the busiest months of the year in Atlantic City. [Challenges] facing Atlantic City include the expansion of gambling halls in Connecticut, continued competition from Pennsylvania slots parlors, high gas prices, and a partial smoking ban that will become a total ban in September."

... Guest commentary from the Inky, Part 1:

"Any public support that still exists for the Foxwoods and SugarHouse casinos at their proposed [riverfront] locations in South Philadelphia and Fishtown, respectively, is running out faster than a slots player goes through a fistful of quarters. Now the question is whether the governor is willing to use his considerable clout to help pry the Foxwoods and SugarHouse casinos off the city's traffic-clogged waterfront, which is targeted for a make-over as a walkable city neighborhood. Acknowledging that 'the political landscape has changed,' Rendell is planning a meeting with slots-parlor license holders. That's a good start, even if the governor was a little too quick to downplay the prospects for new sites. 'Nobody should get too excited,' Rendell said Friday. 'The only way these casinos can be legally re-sited is if the casinos voluntarily agree.' Well, the effort certainly deserves more cheerleading than that. It warrants a sales pitch that appeals to the casino owners' better nature with something more forceful than just asking 'pretty please.'"

... Guest commentary from the Inky, Part 2:

"Remember the Khian Sea? The cargo ship, dubbed the Flying Dutchman of Debris, spent 14 months in the 1980s sailing the globe with 14,000 tons of Philadelphia's toxic incinerator dust in search of a landfill. Know what's like the Khian Sea? Philadelphia's proposed casinos. The big boxes of slots keep moving in search of a final resting place. Turns out citizens don't want them in their neighborhood. Which is a problem because Philadelphia, you may have noticed, is a city of neighborhoods. Local and state representatives, who like to get reelected, are fighting the current locations. Call it NIMDE - Not In My District, Ed."

Odds and ends

West Virginia's lottery proceeds are down for the first time in 20 years -- and Pennsylvania casinos likely have something to do with it ... It's getting testy in Downtown Buffalo, where opponents of the Seneca casino want to have the temporary slots parlor shut down ... St. Louis sees its casino revenues drop in June ... The story is the same in Kansas City ... Pennsylvania's Penn National Gaming is meeting with Kansas gaming officials ... More on keno coming to Ohio:

The other shoe drops

"International lender Credit Suisse has notified North Shore casino developer Don Barden he is in default of a $200 million bridge loan for the project according to a petition filed with the state Gaming Control Board. The board today is considering a request by Mr. Barden to approve a new financing plan for the casino that includes a change in the company holding the license for the project. Mr. Barden would no longer be the majority owner of the casino, according to his spokesman. Under the revised plan, Mr. Barden would retain about 25 percent interest in the casino. Walton Street Capital Fund 6, which is investing $120 million to complete financing for the project, will be the majority owner."

Radio Internet personality John McIntire said it best: This guy just doesn't have the juice.

You can say a lot of things about Don Barden (awesome mustache, for instance), but you can't say that he didn't give us ample warning that this sort of thing might happen. Though the most visible signs have come in the mast month -- stalled construction, revised plans -- the fact it is, he never was able to arrange a complete financing pacakge, even though he's had nearly two years to do it. It's become apparent that banks simply don't want to lend Mr. Barden their money.

You can't blame him totally for that. The credit crunch that is affecting would-be homebuyers is affecting would-be casino owners, too. Markets change. But you have to think he's regretting parting with Jefferies & Co.: "Jefferies & Co. already has provided a $450 million financing commitment for the Pittsburgh casino, enough to cover the entire construction," the Barden team said last year. But Barden didn't like the borrowing terms, and went looking for other financiers.

He still hasn't found them.

And you have to think that the Pennsylvania Gaming Control Board is regretting giving Mr. Barden the casino license -- this isn't as bad as giving a license to a guy who goes on to be indicted, but it's not good.

... So what is the line of succession? Can he just give the license to anyone he wants?

Yes -- but only if the state gaming board permits it:

"A license or permit issued by the board is a grant of the privilege to conduct a business in this Commonwealth. Except as permitted by section 1328(relating to change in ownership or control of slot machine licensee), a license or permit granted or renewed pursuant to this part shall not be sold, transferred or assigned to any other person; nor shall a licensee or permittee pledge or otherwise grant a security interest in or lien on the license or permit. Nothing contained in this part is intended or shall be construed to create in any person an entitlement to a license. The board has the sole discretion to issue, renew, condition or deny the issuance of a slot machine license based upon the purposes and requirements of this part." 

... On that issue, says the ubiquitous PittGirl:

"I don’t think Don Barden should be allowed to transfer the license. He was awarded it, he defaulted, the runner-up should get it. When Miss America is caught in a porn scandal, she doesn’t get to choose who gets the crown after she’s been stripped of it does she? 'Um. Respectfully, I’d like to give the title of Miss America and the crown to my equally hot sister, Trina. I promise she’s worthy and she totally cares about peace in the Middle East … and the Iraq.'"

At minimum, Isle of Capri and Forest City have told-ya-so rights for the next several weeks.  

... Says Teacher Wordsmith Madman:

"Anyone in Pittsburgh -- or, hell, in the whole tri-state area -- who was not yet convinced that the Pennsylvania Gaming Control Board made one of the biggest, most boneheaded blunders in the history of the commonwealth when it awarded this city's casino license to Don Barden and his Majestic Star House of Financial Cards, you should read the (let's face it, inevitable) piece that the Pittsburgh Post-Gazette's Mark Belko posted about a half hour ago. Everyone on that board should be fired. Or at least severely beaten. And then made to march from the Hill to Station Square, back through downtown and over to that padlocked North Shore construction site, where we could all chant No due diligence, no peace! over and over and over again. Or at least until we'd permanently branded each and every one of their forheads with the scarlet letters DA."  

... And what of Barden's promise to pay $7.5 million a year for the new Pens arena? Does that just vanish, too, if he's not the majority owner? Will the new majority owners be bound by an agreement Don Barden made?

"Taxpayers shouldn't be left holding the bag for the $7.5 million annually that North Shore casino owner Don Barden promised to contribute toward a Penguins arena, a state senator said Wednesday. Republican Sen. Jane Orie of McCandless asked Gov. Ed Rendell in a letter to make a public commitment that taxpayers and the Penguins won't be stuck with the bill if Barden's financing for the casino falls through. 'We are confident he will meet his obligations,' Chuck Ardo, Rendell's spokesman, said Wednesday about Barden."

... Protestors also showed up in Harrisburg today to argue against Indiana's Centaur Inc., which is in line to receive a racetrack casino license. We'll have more on that soon.

Don Barden = Don Quixote?

Have you guys seen the latest renderings for Don Barden's casino on the North Shore?

The big box on the right is the garage. The little box is the casino. Instead of a boat slip and decorative brick, the casino will be surrounded by native cement.

... It's been a week since Don Barden proposed the changes to the casino. But you know what? Pittsburgh still isn't cool with it:

 "So now the fancy brick promenade outside the new Majestic Star Casino won't be so majestic, or so star-like. In fact, there won't be any bricks at all -- just some cheap concrete. And the upscale outdoor crosswalks in the original plan also are gone, set to be replaced by some cheap 'native grasses' -- or maybe some native weeds if things keep coming apart. In any case, unless Dan Onorato slips Majestic Star Casino owner Don Barden some landscaping cash out of the overflowing funds from the drink tax, it looks like the Majestic's grand entrance will be concrete and grass, like at Pizza Hut."

Fine, but let's not drag Pizza Hut into this mess. The all-you-can-eat lunch buffet is about as grand and majestic as you can get for $4.99. (Drink not included.)

... " 'The community attributes are disappearing. That's a shame. Whether you like gambling or not, this is a monopoly license and I feel there should be some giveback to the community in terms of amenities, and that's what's disappearing,' said Anne Swager, co-chair of the gaming task force that reviewed all three bids for the city's lone slots license. The issue came to a head last week when representatives for Mr. Barden presented plans to the city planning commission to delay construction of the 1,000-seat outdoor amphitheater, boat docks and access paths for three years and to scale back other elements, including the amount of trees and shrubs on the riverfront and the amount of brick on the promenade."

... "Unless the picture improves soon, we might have to change its name from the Majestic Star to the Mirage."

Oh, SNAP.

... The people have spoken, via letters to the P-G:

"The impact of the success of the casino is more far-reaching than just Mr. Barden and the casino itself. How can he realistically follow through with financial commitments to the Hill District, the Penguins and others regionally if he can't live up to his original commitments just to build the casino?"

At what point is Don Barden just "revising" his initial plans, and at what point do we conclude that maybe he's been tilting at windmills from the very outset?

Dispatches from the east 

"A $5.82 billion takeover of Penn National Gaming Inc. has been called off due a declining purchase price, the casino operator said Thursday. The buyers, Fortress Investment Group LLC and private equity firm Centerbridge Partners LP, had valued the deal at $67-per-share, but since the buyout was first announced last June, Penn shares have sagged 44 per cent, recently bottoming at $28.20. [Wyomissing, Pa.-based] Penn National said it was clear the takeover wouldn't be completed without ‘significant and lengthy litigation,' and also said a re-negotiated, reduced purchase price ‘was not a viable option.'"

... Your weekly DeNaples update:

"Some news reporters subpoenaed over alleged leaks from a grand jury investigation of Mount Airy Casino Resort owner Louis DeNaples said Thursday that they were contacted by people who wanted to confirm their cell phone numbers or names. At least some of those calls were made by an aide to state Sen. Robert Mellow, D-Lackawanna, the Senate minority leader. At least two others came from someone who pretended to work for a Pittsburgh newspaper."

... At least Don Barden's casino is under construction. Out in Philadelphia, it looks like the two waterfront casinos will be open by 2011 -- at the earliest.  

Odds and ends

Slots still aren't legal in Ohio, but keno machines soon will be ... Are slots finally coming to Maryland? ... Penn National hopes so, as it's scouting for land in Maryland ... Delaware's long flirtation with legal sports bookkeeping is over ... Indiana is changing its rules to encourage more traffic from organized gambling tours ... Casinos aren't the great investment they used to be ... Casino workers should be insulted by their wages, says the Press of Atlantic City.

The Trib says Pennsylvania is off-base in targeting the bars and social clubs that have illegal poker machines:

"The desperate criminals running the Bloomfield Music & Bocci Club in Pittsburgh and the Luzerne Volunteer Fire Department's social club in Fayette County have felt the lash of law enforcement. What vile crimes brought the raiding parties of the state's Bureau of Liquor Control Enforcement (LCE) down upon them? Officially, i.e., legally, they were caught operating illegal video poker machines or making excessive payments on the legal machines they are allowed to operate. In fact, the two clubs were guilty of a much greater crime against the state -- competing with slots casinos for gambling revenue."

Double Trouble on the North Shore

(One housekeeping item - the Casino Journal's Web address has changed. Bookmark us. Pretty please?)

A double-whammy of casino news - first, construction has stopped because Don Barden still doesn't have the money in hand to pay his contracting crews for the work they did in June and May. Now we learn that he wants to scale back the casino itself. Nothing major. Teensy, really. You won't even notice. Just some brick work. The boat docks. Amphitheater. Riverfront promenade. But that's it. (Garage will stay the same, though):

"At a briefing yesterday, architect Michael Stern told city planning commission members that Mr. Barden wanted to delay construction of the amphitheater, a dock and access paths for three years. The casino also will alter the look of the proposed riverfront promenade, one that will double as a link in the North Shore trail, by restricting the brick paving to an area in front of a 90-foot drum atrium, the building centerpiece. As originally proposed, most of the promenade was to be brick. Now most of it will be exposed aggregate concrete."

... Says the Pittsburgh Comet:

"Where can this possibly be going? Our guess is that we are about to embark on the great Who Can Appear Perfectly Tough But Fair On The Casino Contest of 2008 & 2009 -- yet in the end we can only influence the development on the margins, because things are as they are. (Note to all hand-wringers: Hindsight is 20/20, there's no sense crying over spilt milk, stiff upper lip and all that. Had the commission based its decision solely on depth of pockets, we would have accused it of one-dimensional insensitivity to complex local intangibles et cetera, yet still we would be confronting economic climate change, not to mention bait-and-switchery. Lord, we've already been subjected to monumental bait-and-switchery, yet nary a peep. But boat docks! Our precious North Shore! Oh the humanity!)" 

... Says the MacYapper:

"I used to root for Don Barden, the Detroit businessman and casino operator, who lobbied the state gaming commission to receive a license to operate a casino on Pittsburgh's North Shore. You know that crappy area up river that they're trying to yuppify and make pleasant for thousands of maroons who want to piss their money away while loud clanging bells ruin their hearing and second hand smoke clouds their lungs. I was afraid if we gave the license to the folks who wanted to operate the casino at Station Square, it would be one big-ass traffic headache extraordinaire. But it turns out that would have been preferable to the headache extraordinaire that is Mr. Barden his own self. First Mr. Bigshot can't come up with the $10 million to keep the damn construction going. THEN he wants to temporarily (he claims) change the design to lower costs. Now sometimes these Riverfront people who guard against ugly Riverfront *** are annoying pains in the ass. But I believe they have something here. I've said it before. Here it comes again: We picked the wrong freaking horse. This dude doesn't have the juice."

... Says PGH is a city:

"We've made our bed now we have to lie in it. That's unfortunately the situation with Barden. If we don't continue lying in bed with this greedy leech, we'll have an eyesore and no new casino on the books ... To the Riverlife Task Force, we all agree with you. We want a casino that has a unique riverfront access, that encourages outdoor use, and that will not maim our riverfront view. However, more importantly at this juncture of work-stoppage and finance-grasping, we want a casino instead of a hulking steel frame in limbo."

... Says Pitt Girl:

"1. I'd like to know if it's too late to give the license to Franco or Mario or you know, anyone with actual money or at least the ability to get their hands on actual money. 2. I'd like to know why they picked Don Barden in the first place. I mean, really why. Not the fake reasons. The REAL reasons. Like specifically, I would like to know who he has dirty pictures of." 

Supposing he does have dirty pictures of Gov. Ed Rendell, let me be the first to go on record as saying I do not want to see them.

... Says Mark Rauterkus:

"Send the builders over to the white elephant Convention Center. Have them roll in the slots machines there. Open the slots parlor next week. And, have the money that Don Barden does have go to pay down the debt of the failing Convention Center. And, Barden's folks can also run the Visit Pittsburgh outfit too. If Barden wants to build in the future -- he can do it in due time after the conditions change."

... Says the Angry Drunk Bureaucrat:

"Now, I don't know much about construction (I doubt that I could tell an I-beam from reinforced concrete or a rivet from a flange), but I do know two things. First, never piss off anyone with power tools. Second, never ever piss off anyone that has access to a backhoe or a bulldozer."

Those are both excellent rules. I'd add a third - never piss off anyone with access to concrete mix and 55-gallon drums.

... Just for the record, here's what Don Barden's opponents were saying about him in May 2007, to the state Supreme Court:

"Forest City/Station Square Gaming and Isle of Capri [attacked] Mr. Barden's profitability at six other casinos he owns, saying he had lost money in several recent years and, due to a large amount of debt, "has a negative net worth of $140 million.'' They questioned whether he has the ability to profitably operate the Pittsburgh casino in a way to produce considerable revenue for the state to use in lowering property taxes. Mr. Barden said he had borrowed money to acquire casinos in Las Vegas and Tunica, Miss., in 2001 and then to acquire a money-losing casino owned by Donald Trump in Gary, Ind., in 2005 ... He said there is nothing unusual about a businessman borrowing money to finance a new operation and said he is fully capable of running his proposed $450 million Majestic Star casino on Pittsburgh's North Shore. He said he already has the money he needs for the casino project committed from lenders, adding that savvy financiers wouldn't make such loans if he weren't a good businessman."

He's right. They wouldn't. Savvy indeed.

Dispatches from the east

Here's the Philadelphia Inquirer's take on Don Barden's latest line of credit:

"Neil G. Bluhm, the Chicago billionaire who is bankrolling the development of a $700 million slots parlor on the Philadelphia waterfront, is pursuing a deal to help Don Barden financially in building his casino in Pittsburgh, according to a partner of Bluhm's. Stymied by legal controversy and neighborhood opposition in Philadelphia, Bluhm now is looking to expand his casino holdings in another part of the state. Bluhm and his real estate private-equity fund, Walton Street Capital L.L.C., have entered into a deal with Barden to help him finance the $780 million Pittsburgh Majestic Star Casino, which has been beset with financial problems. ‘We just think potentially it's a great opportunity, and we are working on it,' Eric Mogentale, managing principal of Walton Street Capital, said last night. ‘It's not a done deal.'"

Just once, we'd like to hear a Barden financier say that it is a done deal.

... "A county judge in Pennsylvania has rebuffed reports to pry reporters' notes and phone records from six news groups in a grand jury leak probe. But the court has yet to decide whether to compel the 15 subpoenaed journalists to testify. Attorneys for casino owner Louis A. DeNaples, under indictment for perjury, in early June sent a flurry of subpoenas to reporters at The Philadelphia Inquirer, The Philadelphia Daily News and The Associated Press, among other news groups. Details of the nominally secret grand jury investigation into DeNaples' dealings with state gaming officials were leaked to the press."

Odds and ends

Compulsive gamblers could start getting state-paid counseling starting this month ... Mt. Airy's payout rate flattens ... Goodbye, Tom Jones. Hello, "lifestyle celebrity" ... If people aren't coming to Atlantic City to gamble anymore, why not build some luxury hotels with no casinos whatsoever? ... "'Girls Gone Wild' founder Joe Francis is being sued by a Las Vegas Strip casino for $2 million in gambling debts from February of last year. Francis spokesman Ronn Torossian said Tuesday that the man who built the soft porn empire already had satisfied his debt to the Wynn Las Vegas casino through "prior agreements. [Francis] said he was waiting for his day in court with Wynn Resorts Ltd. Chief Executive Steve Wynn and planned on ‘exposing how exactly Mr. Wynn deceives his high end customers.'"

I love it when good things happen to good people.