Mar 25 2009
It's been 27 months since the state approved the construction of two casinos in Philadelphia, and barely a shovel has been turned. What the heck is taking so long?
"A Pennsylvania lawmaker plans to introduce legislation as early as Monday to
strip Philadelphia of up to $64 million annually in economic development funds
for failing to have its two casinos up and running. Twenty-seven months of delays on the city's proposed SugarHouse and Foxwoods
casinos have left some lawmakers across the state upset that Philadelphia is
benefiting unfairly from slots revenue without contributing to the pot ... Mayor Nutter said he was hopeful the bill wouldn't be necessary. At a March 13 City Hall news conference, Nutter said there were 'no barriers'
to the construction of two casinos at their desired locations."
Right. No barriers at all, unless you count the noisome community opposition and the crippling worldwide recession.
... More from Philly, via the state Supreme Court:
"Responding to calls for help from the developers of the SugarHouse casino, the
Pennsylvania Supreme Court yesterday appointed a special master to mediate
disputes with Philadelphia officials. In a petition in January, the investment group had accused Mayor Nutter and
his administration of holding up construction of the waterfront slots parlor. The Supreme Court named John W. Herron, a Philadelphia Common Pleas Court
judge since 1988, as special master. It also ordered the city to immediately
issue a foundation permit 'without condition.'"
Dispatches from the Capitol
From our old pal (and Pitt fan) Rich Fellinger:
"Just across the river from Harrisburg, with a view of the state's capital
city, sits Tavern on the Hill. It's a seafood and steakhouse restaurant that claims one of the most
prestigious wine lists in the entire state. The chargrilled lamb chops, seasoned
with herbes de provence, goes for $29.95, while the filet mignon, served with a
mushroom bordelaise sauce, goes for $31.95. On Dec. 17, members of the state Gaming Control Board had a big dinner there,
and they dropped $821, records show. It was the second time last year that
gaming board members dined at Tavern on the Hill -- two board members had a
business dinner there in February and spent $189 ...The restaurant bills are among more than $135,000 in travel and meal expenses
that the seven gaming board members rang up in 2008, according to state records."
You know, compared to The Capital Grille on Fifth Avenue, $32 for a steak is downright reasonable.
Dispatches from the border
The slots scene from Delaware:
"Gov. Jack Markell says Delaware's three racinos would profit - not lose money - if his plan to add more
casinos, allow sports betting and hike the state's share of gambling revenues
goes through. That's not how racino operators read the numbers. In a news conference Tuesday at Dover Downs, state gambling
industry executives said the Markell plan would dilute a market already crowded
by competition ... Markell last week proposed allowing three new casinos;
allowing sports betting at existing casinos, the new ones and 10 other sites
such as bars and restaurants; and increasing the state's share of casino and
racetrack revenue."
... What did Dela Wear? A New Jersey:
"Owner-breeder Michael J. Gulotta told a panel of state senators that
slots in New Jersey's racetracks will be a winner for the state's budget as well
as horsemen ... More than two dozen horsemen came
out to support the testimony of Mike Gulotta. 'The
introduction of racinos will add thousands of jobs in the state -- a win for the
people of New Jersey. The introduction of racinos run by the operators of
Atlantic City casinos will provide those entities with the opportunity to
diversify their sources of revenue.' Gulotta told the senators
that he thought that racinos in New Jersey would yield more than $1 billion in
annual tax revenues."
There's that magical billion-dollar number again.
... Might as well tackle Ohio while we're at it:
"The Ohio State
Racing Commission has unanimously voted in favor of a proposal to allow video
slot machines at seven racetracks. Thursday's
vote sends a recommendation to lawmakers asking them to approve the plan, which
the commission says would create 150 new state employee jobs and bring in $1.3
billion for the state by 2013. About
$625 million of that would go into a fund for primary and secondary schools. Track
owners have said they want the Legislature to legalize slot machines, saying
they need other sources of revenue to raise purse levels to those offered in
neighboring states that have slots," reports the Associated Press.
... The video slots are a separate issue from the actual casinos that have been proposed for Ohio:
"When Pennsylvania lawmakers opened the door to gambling in their state in 2004,
they drove a hard bargain: Casinos would have to hand over 55 percent of their
profits to the government. Four years later, when the governor of Maryland got behind a proposal for
slot machines in his state, he turned the screw even tighter: a 67 percent tax
on gambling profits. Now, however, the promoters of a proposed ballot measure for gambling in Ohio
are suggesting a tax rate that seems downright modest in comparison. If voters
approve casinos in Columbus' Arena District, Cleveland, Cincinnati and Toledo,
each would be taxed at a rate of 33 percent."
Here's a helpful graphic from the Columbus Dispatch.
... Heck, we'll toss in an update from Indiana, free of charge:
"When Penn National Gaming this summer
opens its $326 million expansion at Lawrenceburg, it will be celebrated for the
125 contractors it employed during construction. And the glitzy trappings of the Vegas-scale gaming parlor, with its 300
plasma screens and 60-foot video board. But few will recognize the new Lawrenceburg casino for what it really is: an
act of self-defense. ... The
270,000-square-foot expansion and its Hollywood rebranding will be part of a
larger attempt by Wyomissing, Pa.-based Penn National to lay down roots in
Cincinnati. [The casino] wants to reclaim customers lost to two new horse-track casinos
in Indianapolis and prevent encroachment by developers who have staked claims to
potential casino sites from Louisville to Wilmington."
Odds and ends
The new and improved Meadows casino in Washington County will open April 15 ... Big fire at the Empress Casino in Illinois ... Tropicana hopes to regain control of its Atlantic City casino ... More bad news for Detroit: The Greektown Casino is in default ...
Should casino executives be allowed to run for office in Atlantic City? The answer used to be no -- that way, casino bosses and political bosses couldn't be one and the same. But now?
If you can't beat 'em, join 'em:
"Gov. Jon Corzine has signed a new law that will
allow for casino workers to run for City Council in Atlantic City. The law ends
a decades-long ban on casino workers holding public office. The
original law was put in effect to ensure that the casino industry did not have a
controlling hand in government. The plan has backfired, however, in recent years
with corruption running rampant in city government ... The power that
casinos already possess has been shown in a recent smoking ban for Atlantic
City. Once the ban was in place, casino owners raised concerns about how the ban
would effect business, and the city quickly eliminated the ban for casinos."
Mar 13 2009
On one hand:
"Just when it appeared things could not possibly get any worse for the recession-ravaged casino industry, along came February. Revenue plummeted a breathtaking 19.2 percent -- the biggest monthly drop ever in Atlantic City's 31-year history of legalized gambling -- to offer more evidence that customers have cut back on discretionary spending for casino trips during the economic meltdown. Fierce competition from Pennsylvania's slot parlors added to the misery."
And on the other hand:
"The economic woes dragging down most industries across America have one noisy, colorful, animated exception -- Pennsylvania's slot machines. At a time when other sectors are contracting, the six casinos that have been operating for more than a year showed 14.3 percent growth in February 2009 revenue compared to February 2008, the Pennsylvania Gaming Control Board reported yesterday. The growth occurred despite this year's February having one less day than in the 2008 leap year."
Why is Pennsylvania hammering Atlantic City? Here's one reason -- tax free comps:
"For Pennsylvania's seven slots parlors, giving away tax-free credits -- $21.1 million worth in January alone -- is more than just a marketing tool. Gaming operators here say it has become one of their most powerful weapons for siphoning business away from Atlantic City's casinos. The New Jersey Legislature decided in 2004 to phase out the tax on complimentaries, and it expires June 30, said state Casino Control Commission spokesman Dan Heneghan. The change cannot come soon enough for Atlantic City, as all of Pennsylvania's gambling halls, from Mohegan Sun in Wilkes-Barre to Mount Airy Casino Resort in the Poconos, are ramping up free slot play heavily this year. Look for the Pennsylvania comps to come even more fast and furious after June."
... "An employee of the Meadows Racetrack and Casino was arrested today and charged with stealing $246,301.61 from the facility using fake invoices. Thomas M. Reddy, 47, of Bridgeville, was arraigned today on one count of theft by deception and released on his own recognizance. Mr. Reddy, most recently the director of purchasing and facilities for the Meadows Casino, is accused of issuing fraudulent invoices for two companies, Innovative Cleaning Concepts and Total Mechanical Restoration. An investigation by the Allegheny County District Attorney's office, along with the Meadows and the Pennsylvania Gaming Control Board, showed that the addresses for the companies were fake, and Mr. Reddy had deposited 147 checks into his personal bank account."
... and speaking of The Meadows:
"Billionaire James Packer today scrapped a $1.75 billion takeover of Cannery Casino Resorts LLC and sold his Australian cattle ranches to Guy Hands' U.K. buyout company, Terra Firma Capital Partners Ltd. Packer's Crown Ltd.. Australia's biggest casino owner, rose by a record 13.5 percent in Sydney trading after calling off the deal to buy U.S.-based Cannery, which would have given it three Nevada casinos and the Meadows racetrack near Pittsburgh."
Dispatches from the border
After years of getting denied by voters, casino-backers in Ohio think they've found a solution -- stop asking the voters for approval, and skip around the state constitution while you're at it:
"Even as out-of-state developers pitch a plan for casinos in Ohio's four largest cities, the state's ailing horse tracks are going to the legislature with a proposal for thousands of slot machines at their facilities. The seven tracks, including Scioto Downs south of Columbus and Beulah Park in Grove City, could get slot machines without going to the public for approval, according to an analysis by a member of the Ohio State Racing Commission ... The General Assembly could authorize a state agency, such as the Ohio Lottery Commission or the racing commission, to administer gambling at the racetracks. There would be no need to go to the voters despite the state constitution's restrictions."
Ohio's governor is reportedly against this plan.
... Forest City Enterprises, after years of trying to land a casino in Pittsburgh, in Ohio and elsewhere, apparently plans to sit this one out:
If 2009 becomes the breakthrough year for casino-style gambling in Ohio, [one] of Northeast Ohio's most stalwart supporters and advocates of gambling won't be at the table. Missing in the recent conversation about bringing slot machines and other games of chance to Ohio is any mention of Forest City Enterprises Inc., the Cleveland-based developer that in the past has been a serious player in efforts to get voters to approve casino gambling.
[For] Forest City, backing away from gambling this time around is a corporate decision. "We spent money on three of these (ballot initiatives in Ohio) and we just lost in Pennsylvania," said David LaRue, president and chief operating officer of Forest City's commercial group. "As a corporation, we've just decided gaming is not anything we want to own and invest in."
Forest City had hoped to put a $500 million slots casino in its Station Square development in Pittsburgh after Pennsylvania approved gambling in 2004. But the state gaming board selected another applicant after a protracted bidding and appeals process. Although it's sitting on the sidelines for the latest push in Ohio by would-be casino operators, Forest City might be willing to be a casino landlord.
Odds and ends
Gov. Rendell tells the Philadelphia casino licensees to start building, or else he may have to do something drastic: "If the legislature came to me with legislation saying, ‘Philadelphia's not cooperating, they're not participating, they're dragging their feet, and we've all done our bit -- the counties and municipalities are all up and running -- why should Philadelphia get any of the tax relief?' I would have to weigh that heavily." ... A $200 million casino is opening in Indiana: "Singer Justin Timberlake and actress Jessica Biel taking part in the ribbon-cutting ceremony." Weren't they just on Saturday Night Live together? ... Kansas is fighting over casinos ... Texas is wrangling over the same ... It's almost spring, meaning it's almost horse-racing season, meaning it's almost time for another round of "Can Horse Racing Survive in [Insert State] Without Slots?" stories. This week, it's New Jersey's turn:
"Gov. Jon S. Corzine has ordered the creation of a commission on the horse racing industry to assess the long-term viability of and recommend possible funding solutions for the financially-troubled sport. The move comes in the wake of a New Jersey Sports and Exposition Authority (NJSEA) budget report that projects shortfalls caused largely by a decline in horse racing revenue at the Meadowlands Racetrack."
Mar 03 2009
Should the casinos near Pennsylvania's western border -- The Meadows, Presque Isle and The Rivers -- be nervous about yet another push for casinos in Ohio? Not if history is any guide:
"Yet another coalition is being formed in an attempt to persuade Ohioans to accept what they have rejected four times, including twice in the past three years. Even though a casino issue has never come close to winning voter approval, a new group of business leaders -- including Cavaliers owner Dan Gilbert -- and gaming companies plans to fund a November ballot issue that would allow for four casinos in Ohio."
... more on the would-be Cincinnati casino.
... This latest plan is a compromise among rivals, says Cleveland.com:
"The proposal, which could be announced next month and would have to be approved by voters in November, would feature four full-fledged casinos including one in Cleveland each with attached hotels, entertainment venues and restaurants, sources have told the paper. [The] plan is being led by rival gambling interests My Ohio Now and Penn National Gaming, which owns the Argosy Casino in Indiana who have decided the best way to pierce Ohios anti-gambling barrier is by showing their hands and working together, the sources said. [Just] three months ago, Penn was finishing up a successful $35 million campaign to torpedo the last such proposal, which would have allowed My Ohio exclusive rights to open a casino in southwest Ohio."
On the homefront
How will Pennsylvania's young casino industry react to Gov. Ed Rendell's plan to put video poker machines in thousands of bars and private clubs? Not well:
"Timothy Wilmott, the president and chief operating officer of Penn National Gaming Inc., which operates the Hollywood Casino at Penn National Race Course in East Hanover Twp., was cool to the idea of video poker. He said the gambling industry nationwide is coming off one of its worst years in history. He and other casino managers questioned the idea of allowing thousands of facilities to add video poker. 'It's a bit of a stretch for a state that still hasn't found a way to privatize its liquor stores,' Wilmott said. Polls show that video poker has some public support. A Franklin & Marshall College poll found that 58 percent of those surveyed strongly support or somewhat support legalizing video poker to pay for college. (Via pennlive.com.)
... The Chambersburg (Pa.) Public Opinion is rubbing its eyes in disbelief:
"It's sometimes hard to believe it's been five years since Pennsylvania legalized slots gambling, primarily on a promise to use part of the take to reduce property taxes for residents. It's hard to believe partly because most of the 14 casino licenses authorized by Act 71 of 2004 remain unproductive, including four of the five stand-alone slots parlor licenses. Those stand-alone parlors have been mired in a licensing process beset by approval irregularities and claims of applicant malfeasance noted this week by House Republicans, who want to mark the five-year anniversary by reforming the slots legislation that has provided significant tax relief."
... One of those casinos, Foxwoods in Philadelphia, may build in a new location -- and this after having already abandoned its original riverfront site in the face of protests from casino foes, and selecting a new site in Center City:
"The partners behind the Foxwoods slots parlor could shift their plan for a downtown Philadelphia casino from one end of the Gallery at Market East to the other. The investors' group is eyeing empty floors at the former Strawbridge & Clothier store at Eighth and Market Streets, Foxwoods spokeswoman Maureen Garrity confirmed last night. he partners' current plan is to convert two floors of the Burlington Coat Factory store at 11th and Market Streets into a 3,000-machine slots parlor. It is unclear why they now are looking at alternative space. One observer said it might be easier for Foxwoods to move into the Strawbridge building, the lower three floors of which are empty."
Though putting the casino there would not require relocating Burlington, a major tenant, the Inquirer said.
Odds and ends
More chatter about bringing casinos to Texas, but one handicapper says the votes aren't there yet ... Atlantic City is again mulling a total smoking ban in its casinos ... The Charlestown casino in West Virginia may again seek the voter approval that is needed in order to permit table games ... Casino freebies -- comps -- are down in Atlantic City ... Will Boston, Mass., get slots parlors instead of full-fledged resort casinos? ... Ameristar Casinos actually gained value in what has been a truly awful week on Wall Street ... Are retired Boomers, who have lost some of the retirement savings in the Wall Street meltdown, at risk for gambling addiction?
Chipotle, eat your heart out:
"Las Vegas casino cafe is rewarding patrons who can put away a 2-foot, 6-pound burrito with a most logical prize -- free unlimited rides on a roller coaster that runs in both forward and reverse. The offer comes with a caveat, though: Those who accept the challenge but can't finish 'The Bomb' burrito have to take a picture with an extra small, pink T-shirt that says 'Weenie.' The NASCAR Cafe at the Sahara Hotel & Casino began selling the cheese-and-guacamole slathered burrito on Thursday for $19.95."