Sep 03 2008
... also known as a "notes" column. Also known as Lazy Writer Syndrome (LWS), characterized by drowsiness, bouts of procrastination, shin splints and multiple trips to the snack bar. The only known cure is a tropical vacation.
... Here's the state's rationale for approving the Pittsburgh casino license switcharoo.
... Nothing to do on Friday? Here's something:
"Friday marks the one-year anniversary of Centaur Inc. getting one of two things it needs to create a new $425 million harness racetrack and slot machine casino west of New Castle in Lawrence County. On Sept. 5, 2007, the state Harness Racing Commission granted Indianapolis-based Centaur a harness racing license. ... To spur the gaming board to act on the slots license, county tourism officials and Carmen Shick, the head of Lawrence County-based Ambrosia Enterprises, will hold a rally Friday near the proposed racetrack/casino site, along Route 422 near the Ohio line."
Dispatches from the east
"Gambling regulators have cited Harrah's Chester Casino for allowing a child on the casino floor. The Pennsylvania Gaming Control Board last week fined the casino $20,000 for allowing a 14-year-old girl on the casino floor in March of this year. Board spokesman Richard McGarvey said the girl was able to get onto the floor, gamble, and cash in the winnings before being caught by a security guard. The casino was also fined $10,000 for several incidents involving security personnel not being present in security zones within the facility."
What, you seriously expect them to check the IDs of every single person who walks through the casino doors? Think of the manpower that would require! Like, two bouncers at least.
... It's simple math -- fewer gamblers means fewer people paying for parking in Atlantic City:
"Gambling floors aren't the only places where Atlantic City casinos are on a losing streak. Revenue at casino parking garages fell nearly 6 percent in fiscal 2008, which ended June 30, state Treasury Department figures show. The $35 million total was down from more than $37 million in fiscal 2007. Gambling winnings for the casinos were down by a similar percentage as more players seemed to choose slots parlors in Pennsylvania and New York."
Odds and ends
Should the state pay down old debts or buy new stuff with its casino revenues? ... A Maryland thoroughbred dealer wants slots to be legalized in his state ... Both Maine and Massachusetts consider new casinos ... The Gulf Coast casinos reopen after Hurricane Gustav (and hope another hurricane doesn't hit next week) ... Isle of Capri releases its quarterlies.
Aug 28 2008
Barden's former spokesman, Bob Oltmanns, makes the case:
From my front-row seat to the Pittsburgh casino saga, I can say without reservation that Don Barden is a good and decent man. He's the kind of guy Pittsburgh used to embrace, yet from Day One he was maligned, criticized and disparaged by rumor and innuendo and never got the benefit of the doubt that he deserved. He may have made some missteps, but his ultimate shortcoming was that he did not have the financial wherewithal to overcome an historic decline in the credit market ... I know he wanted to go on fighting. It's in his DNA. But in the end, he did what he knew he had to do to keep hard-working construction families from getting hurt, and he put Pittsburgh ahead of a dream to which he had devoted five years of his life.
And for that, Pittsburgh ran him out of town.
Literally from the very hour that Mr. Barden was awarded Pittsburgh's gaming license, he was castigated as the guy who would cost Pittsburgh its National Hockey League franchise because his proposal did not include full funding for a new Penguins arena. [Later], the competitors for the Pittsburgh gaming license, Isle of Capri and Station Square Gaming/Harrah's, appealed the gaming board's decision in favor of Mr. Barden to the state Supreme Court, delaying the project by six months and pushing it into the worst credit crisis since the Great Depression. This ultimately doomed Mr. Barden's attempt to secure permanent financing.
[Month after month], new obstacles were thrown in Mr. Barden's way and new demands placed on him. He was criticized for resisting the public process, when precisely the opposite was true. Mr. Barden depended on the public process to ensure that the license applications were reviewed fairly and honestly, and he followed the rules of law and procedure to the letter. In return, he became the defendant of a public process run amok. If any private development project in the history of this city has ever been subjected to such ever-changing standards and demands, I've not seen it.
[It] was hypocrisy that drove Don Barden from this community and, as a Pittsburgher, I'm ashamed at the treatment he received. The economy and credit crisis merely offered cover to those committed to seeing him fail. He's a good man who will be missed, and Pittsburgh is the lesser for his departure.
Many fair points from Mr. Oltmanns, but here's a question -- why would anyone have expected smooth sailing? Did Mr. Barden really think that the construction of a casino in an urban area -- the very first casino in Pittsburgh -- would not be met with political resistanace? With interference from community groups? Lawsuits from neighbors and business foes? Maybe it's that simple in Las Vegas, but from Buffalo to New Orleans, from Philadelphia to San Francisco, experience tell us that casinos are nearly always controversial projects, and construction timelines are often delayed by years. Mr. Barden may have been unfairly villified to some extent, but he was also uncommonly naive if he truly believed that he'd have his casino up and running by March 2008 (his original projection, just 15 months after winning the casino license)
Agree? Disagree? Comment below, or sign up here.
... See what I mean? It's rarely easy:
"The Seneca Nation of Indians has suspended construction activity for two of its high-profile construction projects, including the controversial Seneca Buffalo Creek Casino in downtown Buffalo. While the Seneca Nation pinpoints the decision on a weakened economy, others suggest the decision concerning the Seneca Buffalo Creek Casino may be related to on-going litigation from anti-casino forces. The suspension of the construction projects comes one day after U.S. Federal Judge William Skretny enforced an earlier ruling that gaming operations in Buffalo were being run from a previous 'arbitrary and capricious' decision by the National Indian Gaming Commission. Skretny ordered the NIGC to make its final determination about the fate of Seneca Buffalo Creek Casino soon."
Dispatches from the border
Big news from Atlantic City -- if you were hoping for slot machines at racetracks:
"Slot parlors in Pennsylvania, New York and Delaware have been chipping away at Atlantic City's business, but at least the casinos no longer have to worry about losing their customers to New Jersey racetracks. After more than a year of negotiations, the casinos have finally wrapped up an agreement with the horseracing industry to block slot machine-like video lottery terminals at the tracks, a casino representative said Wednesday. The agreement, signed Aug. 13 without fanfare and with no public announcement, requires the casinos to pay the tracks $90 million over the next three years in exchange for a moratorium on VLTs."
... Atlantic City's losing hand: "For years, casino executives have acknowledged that Atlantic City needed to become a destination resort. Its future prosperity depended on making the town more than just home to a slew of gambling halls. But to date that hasn't happened. And now that there's competition, Atlantic City executives don't have a reasonable answer to the guy who wonders why he should drive all the way to Atlantic City to play the slots when he can do that closer to home. Skimping on the comps only provides another disincentive."
Odds and ends
Maybe some of that casino revenue should go toward improving health care ... Harrah's will run a new casino in Kansas ... The Philly Inquirer editorializes on the recent Supreme Court decision ... Las Vegas Sands, which will operate the Bethlehem, Pa., casino, is looking to build in India ... Greektown casino in Detroit adds 600 slot machines ... Isle of Capri set to release its quarterly results ...
Gamblers aren't losing quite enough money in Kansas City:
"Lawmakers' failure to lift casino loss limits has prompted Kansas City's Ameristar Casino to put the question on the ballot in November. In return for the removal of the $500 loss limits, casinos are willing to up their tax rate a percentage point and prohibit the building of any more casinos in the state to pit fears of gambling expansion."
Aug 26 2008
Remember last week when we said that Neil Bluhm, head of the Majestic Star's new ownership group, might be forced to consider moving his Philadelphia casino away from the city's riverfront, if only to speed up the construction process (since neither of the two proposed Philly casinos, Bluhm's SugarHouse or Foxwoods, has broken ground yet)? No? Well, I did. You can look it up. Just scroll down a bit. Or click here.
Point is, last Friday the state Supreme Court rescued the SugarHouse project, or at least it seems that way on first blush:
A group of state Senate and House members who represent neighborhoods near the proposed SugarHouse casino pledged today to go to federal court to overturn a decision that lets the casino build on submerged riverfront land. [The] legislators sharply criticized a Pennsylvania Supreme Court decision issued Friday that gave riparian rights to the casino developer. They also argued that submerged land along the waterfront should be under state control.
The strategies are the latest effort by those opposed to casinos being built along the Delaware River waterfront. The casinos have received the approval to build there by the state Gaming Control Board, an approval that was affirmed by the state Supreme Court.
"We believe the court overstepped its boundaries," said Rep. Michael O'Brien, as he boarded a plane from Chicago to Denver for the Democratic National Convention today. O'Brien was joined in the statement by State Rep. William Keller and Sens. Vincent J. Fumo and Michael Stack, all Democrats from Philadelphia.
"Our legislative counsel is reviewing the decision," O'Brien said, "and we assume to take it up to the federal court and review our options there and also seek legislative remedies."
Meanwhile, SugarHouse's chief executive officer, Greg Carlin, said today that his company was moving forward on obtaining remaining permits and removing debris at the site for the $700 million casino planned for North Delaware Avenue at Shackamaxon Street.
Full speed ahead. Until this thing ends up in federal court.
... Read the full Supeme Court opinion here (and the dissenting opinions here and here).
... Editorial: "The Delaware riverfront is the wrong location for the proposed SugarHouse and Foxwoods casinos. That's the conclusion of PennPraxis design experts who prepared a site plan review for Mayor Nutter. It said the proposed big-box slots parlors and their mammoth parking garages wouldn't be compatible with the kind of waterfront most Philadelphians want - walkable, relatively green, connected to the rest of the city. Among the few people who don't seem to recognize this planning dilemma are the casino developers, the state gaming board and Gov. Rendell, who will convene a meeting today of interested parties."
Slots law overhaul
"A member of the state's casino oversight board fired back at senators who want to eliminate outside income of board members, saying lawmakers should play by the same rules. 'I'm an old believer in what's good for one is good for all,' said Jeffrey Coy, a former House member from Shippensburg earning $145,000 a year on the Gaming Control Board. 'Jeff knows better than that,' said Stephen MacNett, general counsel for Senate Republicans. 'He was a legislator and he knows that the role of a legislator is very different than that of a gaming board member.' Legislation sponsored by Sen. Vincent Fumo, a pro-gambling Democrat from Philadelphia, and Sen. Jane Orie, an anti-slots Republican from McCandless, would prevent future board members from receiving outside income."
Dispatches from Atlantic City
Comps are becoming harder to find in Atlantic City:
"With a slow economy and competition from neighboring states hurting their revenues, comps are growing scarce at Atlantic City's 11 casinos. And its mostly high-end players who are now getting the benefits that used to be common for many patrons, especially seniors and daytrippers who mostly played the slots. Overall, Atlantic City casinos spent $375 million on premium hotel rooms and other perks in the three months ending June 30."
A year ago, they spent about $422 million during the same period, according to the Associated Press.
... AC is at a crossroads:
"High gas prices, fierce competition and an ailing economy have taken a heavy toll on Atlantic City's casinos, and industry analysts predict even more pain ahead, including layoffs, bankruptcy filings and lower tax revenue for senior citizen programs. 'Atlantic City is truly at a crossroads,' said Harvey Perkins, senior vice president of the casino consulting firm Spectrum Gaming Group. 'Layoffs are a given.' [Other] analysts take a similarly dim view of the state of the A.C. market. 'We may be passing through the darkest point in the tunnel right now, but it would be foolish to believe the tough times are behind us,' Deutsche Bank analyst Andrew Zarnett wrote in a recent report."
... But the tree of gambling must be refreshed from time to time with the blood of casino magnates and their employees:
"'The best thing that happened to Atlantic City is competition,' Perkins said. 'This market has had lazy exclusivity for 28 years, because very few of the operators chose to reinvest vibrantly. Those that did invest are faring better than those that didn't.'"
Odds and ends
The Meadows' success means good things for Washington County's Tanger outlet stores, and vice versa ... From the Hindsight is 20/20 Dept: "The Democratic candidate for state attorney general said he would have sought a court injunction to block the awarding of a slots license to Dunmore businessman Louis A. DeNaples had he been in office at the time." ... The same company that is to operate The Meadows' new casino has a grand opening scheduled for Nevada ... Penn National's Hollywood casino near Harrisburg is performing admirably in light of high gas prices and less discretionary spending ... This guy is unimpressed with how casinos expanded into Pennsylvania ... MTR's credit rating may drop.
Bad news for the Buffalo, N.Y., casino:
"Opponents of casino gambling in Buffalo say they have won another legal round. The Seneca Nation of Indians, meanwhile, say they will appeal the lastest decision while gambling continues at their temporary casino near downtown. Federal Judge William Skretny has reaffirmed his decision earlier this summer, namely, that casino gambling on the Senecas' Buffalo Creek site near H-S-B-C Arena is illegal. But Tuesday's ruling leaves the question of how to enforce his July decision up to the National Indian Gaming Commission. In a written statement, Senecas say construction of a permanent casino on the Buffalo Creek site will continue."
Aug 22 2008
Neil Bluhm's second Pennsylvania casino (that would be the former Majestic Star on the North Shore) is doing better than the first one he conceived, SugarHouse Casino, on Philadelphia's waterfront. If you think the process has been a mess in Pittsburgh -- with lawsuits a plenty, disputes over garage height, and finally Don Barden's financial meltdown -- you'd probably be right, but it's been smooth sailing compared to Philadelphia: Nearly two years after the casino licenses were awarded, they have yet to even agree on where the casinos will be built.
At what point does Neil Bluhm & Co. give up and move the casino to a less controversial location? Maybe sooner than later:
"Officials plan to meet with the developers of a second Philadelphia casino to see if they will consider alternative sites in the city. City officials hope to meet with SugarHouse after Labor Day. The company is planning a casino in the city's Fishtown neighborhood. The project is opposed by some community members. Representatives of a casino project planned for the Delaware River waterfront in South Philadelphia said Thursday that they would at least consider other sites. Neighbors have also opposed that project, which is being developed by Foxwoods."
But SugarHouse probably wouldn't move unless Foxwoods agreed to do the same:
"Foxwoods Casino would consider building its slots parlor on sites away from the Delaware River waterfront, Gov. Rendell announced yesterday after meeting with Foxwoods principals. The development - which the governor called 'good news' - is the latest movement in a protracted struggle that pits Foxwoods and the other casino planned for the waterfront, SugarHouse, against intractable state and local opposition. Even so, Rendell cautioned: 'There is nothing that is sure or certain here.'"
And Philadelphia metro reports: "Foxwoods would not reveal the sites it is considering, but said all of them are off the waterfront. Investors have already spent $170 million on the current location on South Columbus Boulevard at Reed Street, including the cost of the gaming license, but have yet to break ground because of the political stalemate."
... In Pittsburgh, a nasty winter could mean construction delays on the Majestic Star casino.
... Pennsylvania's own Penn National Gaming, as well as Harrah's, have been selected to operated two Kansas casinos. But that might not be enough for Penn:
"Penn could walk away from the Cherokee County deal. The company in recent weeks has pitched its 'southern strategy' to state officials, making it clear Penn wanted to operate in both the southeast and south central Kansas gambling zones, or none. ... 'We've got to digest this decision and discuss it with our board,' Penn spokesman Eric Schippers said Friday. 'We're clearly disappointed.'"
Odds and ends
Despite Atlantic City's current slump, Pinnacle Gaming still wants to build a new casino there ... The Mohegan Sun in Connecticut is expanding ... More from the Trib on whether a high-ranking Pa. gaming board official should have taken a private sector gaming job so quickly, and whether doing so violates our gaming law ... Buffalo's casino, if allowed to continue operating, would threaten the city's hospitality industry, according to one professor from the area ... For sale: A riverboat casino in Indianapolis.
Aug 21 2008
Debtwire, the same financial news service that reported two weeks ago about Centaur's mounting financial troubles, now reports that Centaur -- which has been trying to build a casino and racetrack in Lawrence County -- may sell its property so it can pay back some of its investors:
Centaur Gaming first lien lenders accepted the company's offer of an immediate $100 million paydown as part of an amendment to cure a default triggered in July, said two sources close to the matter. Centaur also indicated it would seek to sell its Valley View Downs property outside Pittsburgh, they said. Much of the proceeds from those asset sales would also be used to pay back Centaur's $ 770 million credit facility, they added. The first liens agreed to the proposal late last week ...
The Valley View property should fetch at least $100 million, and possibly a lot more, if sold to another gamer since it is one of only seven eligible racino sites in the state, pointed out the first source familiar. It remains unclear whether Centaur will continue with its licensing process in the meantime. At a Pennsylvania Gaming Control Board hearing last week in Harrisburg, Centaur officials reiterated their desire for the board to consider their application and set a hearing for the early fall. The board said it would continue its investigation into the potential licensee.
Centaur, the story noted, has been in default on its loans since failing to obtain a gaming license by a July 15 deadline. Centaur says it is still negotiating with lenders; the gaming board says it hasn't heard one way or another from Centaur, and has yet to receive any notification that Centaur plans to amend or withdraw its casino application.
This is just the start, folks. Stay tuned.
... As long as we're regurgitating stuff that other people have written, here's a letter to the gaming board from several House Republicans (including our own Mike Turzai):
We are concerned about reports regarding Kevin Hayes, the recently departed former Director of Gaming Operations for the Pennsylvania Gaming Control Board. According to the information found on the Board's website, Mr. Hayes is now listed as a Licensed Entity Representative for both Downs Racing, LP and Greenwood Gaming. We have a number of questions for the Board involving this situation in light of various provisions of the Pennsylvania Race Horse Development and Gaming Act (Gaming Act), the Board's own Code of Ethics and the Pennsylvania Rules of Professional Conduct for Attorneys. Further, additional questions will concern last week's letter regarding the Neeb Separation and General Release.
Section 1201 of the Gaming Act, specifically subsection (h), paragraph (13), provides as follows:
"No employee of the board or individual employed by an independent contractor of the board whose duties substantially involve licensing, enforcement or the development or adoption of regulations or policy under this part shall:
(i) accept employment with an applicant or licensed entity, or an affiliate, intermediary, subsidiary or holding company thereof, for a period of one year after the termination of the employment relating to the conduct of gaming or contract with the board; or
(ii) appear before the board in any hearing or proceeding or participate in any other activity on behalf of any applicant, licensee, permittee or licensed entity, or an affiliate, intermediary, subsidiary or holding company thereof, for a period of two years after termination of the employment or contract with the board."
Question: How is this relationship (a former employee who, within a few months, becomes a licensed entity representative) permitted under § 1201(h)(13)? Please provide a detailed explanation.
The letter was in response to this story from The Times-Tribune of Scranton:
"A former top-ranking state gambling regulator who left his job three months ago is now a lawyer and registered lobbyist for Mohegan Sun at Poconos Downs in Plains Township and Philadelphia Park casino in Bensalem. Attorney Kevin C. Hayes of Scranton served as director of the Office of Gaming Operations for the state Gaming Control Board until May 29, when he resigned ... The state Ethics Act addresses this issue in part by requiring a one-year waiting period before a former public employee can represent an individual before the agency that had employed them. But attorneys don't fall under this one-year waiting period when it comes to appearing before an agency, Mr. Hayes argued. He provided research of state court cases concerning Ethics Commission regulation of former government attorneys."
Odds and ends
Harrah's gets sued by Indian tribe. Find out why ... On the subject of Indian casinos, tribal casinos are seeing better revenues than non-tribe casinos ... Jockeys' mount fees are set to increase at Pennsylvania racetracks ... Another letter to the gaming board from the GOP, about another former employee who has gone to work in the industry.
Aug 20 2008
The Neil Bluhm era officially begins in Pittsburgh:
"The North Shore casino is back from the brink. Rescuing the riverfront venue from a possible bankruptcy, an ownership group led by Chicago billionaire Neil Bluhm closed on $555 million in financing yesterday, clearing the way for construction to resume for the first time since June 30. Some workers were back on the job yesterday. Construction should be going full tilt by the end of the week, said Dan Fee, spokesman for Holdings Acquisition Co., which was formed by Mr. Bluhm to take over the troubled project. The company hopes to get the casino completed by next August, about three months later than the timetable set by Detroit businessman Don Barden before he relinquished control of the slots parlor to Mr. Bluhm's group."
... The Patriot-News of Harrisburg says that Pennsylvania is losing out on tax revenue thanks to the absence of casinos in Philadelphia and Pittsburgh, and that means homeowners are missing out on some preoperty tax relief:
"Pittsburgh's Majestic Star casino was to open by March, but was sidelined by financial problems. In Philadelphia, neighborhood activists have stalled the SugarHouse casino, which was to open in April. Gov. Ed Rendell's budget office estimates that the state is losing $10 million per casino in property tax cuts every month that the openings are delayed."
More casino trouble?
We've already had one indictment related to Pennsylvania's new gambling industry. Here's rooting for another:
"The Pennsylvania Attorney General's Office has opened a criminal investigation that is believed to include a review of financial transactions connected to the development of Presque Isle Downs & Casino in Summit Township. Agents with the office have seized a computer hard drive that contains extensive records of payments made and received by Tecnica Development Corp., the Erie-based company that had a multimillion-dollar consulting contract with MTR Gaming Group Inc., the parent company of Presque Isle Downs & Casino. The agents took the hard drive in April from a former vice president of Tecnica, Frank DeRosa, according to a document obtained by the Erie Times-News and statements made in Erie County Court on Monday. DeRosa, a real estate agent, left Tecnica in July 2007 after working for seven years for Tecnica and its owner, Greg Rubino, an Erie real estate agent and developer who is now leading the effort to build a tires-to-energy plant on Erie's east side."
It's a long story; you can read the whole thing here. Rubino, you may recall, was a key player in the case against former Erie mayor Rick Filippi, who was tried two years ago on corruption charges related to a failed casino and racetrack project.
Dispatches from the border
Another month, another round of bad news for Atlantic City:
"In a double whammy, both casino revenue and profits fell during what one gaming analyst bluntly called an 'ugly' second quarter. Competition from Pennsylvania slot parlors, the sluggish economy and high gas prices continue to push down earnings for an industry mired in a prolonged slump. Gross operating profits plunged 16.5 percent to $247.3 million and net revenue slipped 3.3 percent to $1.15 billion in the second quarter compared with the same period in 2007, according to figures released Tuesday by the New Jersey Casino Control Commission."
... In New York, though, Indian casinos are doing just fine -- or at least, they did just fine last year:
"Indian-run casinos generated more than $1 billion in revenues last year and may have taken a bite out of Atlantic City's action, a new report shows. Despite a slowing economy, New York's eight Indian gaming facilities saw a 7.7 percent increase in revenue from 2006 to 2007, topping $1.02 billion, Casino City's Indian Gaming Industry Report says."
Odds and ends
Gambling numbers dip slightly in Pennsylvania last week ... MTR shares drop on a bad financial review from Standard & Poor's ... The Bay State is still pushing for casinos, but one high-profile gambling opponent isn't backing down ... Our long search for Grandmother of the Year is over:
"Police have charged a grandmother who they say left her grandchildren in her car while she gambled at a Hallandale Beach casino Tuesday. Police said Jeanne Shahan was arrested after a patron at the casino saw two children, a 2-year-old girl and a 14-year-old boy, alone in a car at the Mardi Gras Racetrack and Gaming Center parking lot."
Aug 18 2008
Lots of e-mails from readers who are less than enamoured with the Bluhm-Barden casino switcharoo. A small sampling:
"So the politicians got what they wanted, and the board said, 'How high should I jump, and they did. Unfortunately the fish smell is worse than ever ... Obviously, this was planned to be a done deal from the beginning."
"I think this is so crooked from the start; [Barden] shouldn't have got it in the first place. Now he gets to choose who does get the license, and make money. I think a lot of people (crooks) need to go to jail -- every crook on the gaming board, go to jail. Barden -- jail. But because they are rich, they are allowed to be crooked. This needs investigated by federal prosecutor. Rich get away with anything what a country."
"The whole casino thing is nothing but a big conspiracy. Don Barden had no business getting the casino license in the first place, and then because he doesn't have the money, the big boys step in to save the day. They probably could not have gotten the casino license in the first place, but now with everything in doubt the gaming commission approves the new ownership in a flash. It took those morons almost a year to come up with Barden as the best option -- and almost instantly the new owners are approved. CONSPIRACY."
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... the Morning Call's Matt Birkbeck says Don Barden was a gamble - in more ways than one:
"In his bid for a Pittsburgh casino, Don Barden told state gaming investigators he'd racked up $11 million in gambling losses because he played with people who 'wagered excessively,' including former basketball star Michael Jordan, according to a report obtained by The Morning Call. Barden also told the investigators in August 2006 that he had stopped gambling with Jordan, with whom blackjack bets could run $10,000 per hand, and that he'd paid down nearly $2 million in gambling debts to various casinos, according to an internal Pennsylvania Gaming Control Board report. Report in hand, the gaming board in December 2006 awarded Barden a slots license. Last month, the Detroit businessman lost majority control of Pittsburgh's Majestic Star Casino amid money problems unrelated to him personally. Barden's short tenure as majority owner of Majestic has drawn additional scrutiny of gaming regulators already being questioned for their licensing approval of Scranton area businessman Louis DeNaples, owner of the Mount Airy casino."
He lost millions because he played with people who "wagered excessively"? Sounds like he was one of the people who wagered excessively. (Note: his gambling debts had been questioned by critics previously.)
... The P-G's editorial board likes the unholy marriage between Jane Orie and Vince Fumo, and the legislative offspring it has created:
"Pennsylvania's slots casino law is a work in progress. Ever since it was enacted in 2004, the statute has been poked, scorned, reviled and revised ... The latest [proposed revision] is a raft of improvements put forth by two unlikely allies: Republican Sen. Jane Orie of McCandless, who opposed the legalization of slots, and Democratic Sen. Vincent Fumo of Philadelphia, who wrote the casino law. Their revisions would toughen the state gaming board, broaden the public information on license applicants and reduce the role of politics. These are noble objectives, and the senators' bipartisan approach should win the bill considerable votes. If enacted, these reforms won't be the last changes made to the slots law, but they'll take care of assorted problems that have surfaced in Pennsylvania's short experience."
... Construction on the Majestic Star Unnamed North Shore Casino could begin as early as tomorrow.
Dispatches from the North
It could be a month or more before the state's gaming board votes on whether to give Centaur Inc. a gaming license:
"The state Gaming Control Board expects to hold a suitability hearing by mid- to late September on Centaur Inc.'s request for a racetrack slots license, the key element in plans to build a new $430 million track and casino west of New Castle in Lawrence County. Centaur officials are still working with their lenders to firm up financing for the project, which has been hampered by their inability, so far, to obtain a slots license from the state and by the ongoing turmoil in the credit markets. Gaming board investigators said they hope to complete, by early September, background checks of Indianapolis-based Centaur, which now owns a racetrack in Indiana and a casino in Colorado."
You don't suppose the criminal prosecution of Mike Veon / Gerald LaValle's wife is making anybody at the gaming board nervous, do you? Worried about what may leak out of thoe investigations, maybe?
Save the ponies!
Slots have been good for harness racing in Pennsylvania. But no great -- at least not lately:
"The Pennsylvania Harness Racing Commission, meeting recently at the Mohegan Sun racetrack and casino at Pocono Downs, acknowledged that the industry had a challenging July, reporting less betting at various tracks across the state, from 9 percent to 19 percent, compared to last July. The saving grace was out-of-state wagering, which provided the boost that many tracks needed to post gains in their overall handles. Mohegan Sun at Pocono Downs, for example, posted a 26 percent increase in its handle, compared to 2007, even though the number of on track bets was down more than 19 percent compared to last July."
Until next time ...
Aug 15 2008
Neil Bluhm, to the rescue:
"Work on the $780 million casino on Pittsburgh's North Shore could resume as soon as Monday. That was the prediction of Chicago billionaire Neil Bluhm and general contractor Dan Keating yesterday, after the Pennsylvania Gaming Control Board approved the transfer of Pittsburgh's slots license from Don Barden, who has had it since December 2006, to Mr. Bluhm and his partners at Walton Street Capital. The vote was unanimous, with board members fervently denying they had 'rushed to judgment' or succumbed to political pressure."
... Nope. No pressure at all. Just a friendly phone call from this guy:
"State Rep. Dwight Evans, chairman of the House Committee on Appropriations, said today the Gaming Control Board's unanimous decision to allow Chicago billionaire Neil Bluhm to take over the Pittsburgh casino project was critical for the future of the Southwest region and for the state. 'This was the right decision for Pittsburgh and for Pennsylvania,' said Evans, D-Phila., a staunch advocate of the casino project originally started by Don Barden, the only minority casino owner awarded a license thus far. 'The board's decision means Mr. Barden remains a key player in this new industry in Pennsylvania; it puts contractors back to work; and it insures the community will receive millions of dollars to invest for the neighborhoods. Most importantly, it means the state soon will drawing on those casino dollars so we can continue to provide property tax relief across the state.'"
... The Philadelphia Inquirer version, the AP version, and the KDKA version.
... Like the deal? Think it stinks like three-day-old fish? Let us know via e-mail, or use our commenting function. It's comment-riffic!
Dispatches from the north ...
Centaur Inc. says that it has no intention of squashing its Lawrence County casino:
"In an e-mail release Thursday afternoon, Centaur spokeswoman Susan Kilkenny said the company has 'absolutely no intentions of withdrawing our gaming application,' in spite of reports published on the Debtwire Web site. Debtwire reported last week that Centaur's creditors were pressuring the company to drop its plans to build the Valley View Downs gambling facility in Mahoning Township and use what development funds it has to repay its creditors."
... and from the south
Maryland, pushing to legalize slots, says its racetracks can't survive without more gambling, and offers this as proof:
"A lack of incoming revenue has prompted the Maryland Jockey Club to suspend the schedule of fall stakes races at Laurel Park. The MJC made the announcement Aug. 6, agreeing with the Maryland Thoroughbred Horsemen's Association to put the Laurel Futurity, the Selima Stakes, the Grade III Safety Kept Stakes and the Frank J. De Francis Dash on hiatus. The prestigious De Francis Dash has a purse of $300,000."
Odds and ends
The Patriot-News weighs in on the new Orie-Fumo partnership ... Ohio state officials have settled on the final wording for a Nov. 4 ballot question asking residents if they want to build a casino ... Majestic Star Casinos saw its operating revenues decline, big time: "For the three months ended June 30, 2008, adjusted EBITDA was $15.5 million compared to $20.3 million for 2007, a decrease of approximately $4.8 million, or 23.4%. The adjusted EBITDA margin for the three months ended June 30, 2008 was 18.2% compared to 21.8% for 2007." (EBITDA means Earnings Before Interest, Taxes, Depreciation and Amortization) ... Casinos everywhere are having a tough time buying debt.
Later, gators.
Aug 12 2008
No, on second thought, maybe you should quit your day job, say state Sens. Jane Orie and Vince Fumo in a press release today. They want members of the state's Gaming Control Board to drop whatever else they're doing before they are appointed to the gaming board, a position that pays six figures:
Two state Senators have developed bipartisan legislation that would make several important amendments to Pennsylvania's 2004 slot machine gambling law, including prohibiting outside income by Gaming Control Board members, expanding the prohibition on campaign contributions from casino interests, and increasing public disclosure of previously confidential information supplied by license applicants.
Vince Fumo (D-Philadelphia) and Jane C. Orie (R-Allegheny) plan to introduce the bill in time for it to be considered when the Senate returns to session in September. Fumo was an early supporter of legalizing slot machines and was one of the chief authors of the legislation to do so. Orie opposed the expansion of gambling in the state.
"We disagreed on the overall public policy merits of the legalizing slots, but we agree now that the experience of the past several years compels us to make changes," Orie said.
"The past two years have highlighted several unintentional deficiencies of the existing law. We created a new industry in this state and adopted the best practices that we could find from other states, but the law was not perfect and we can improve upon it," Fumo said.
The proposed legislation would make Gaming Control Board members full time, and ineligible for outside income. They are already paid a salary reflective of the full-time nature of the position - $150,000 per year for the chairman and $145,000 for the other six members.
Fumo and Orie said the intensity and complexity of the work argue for it being a full-time job, and the need to prevent actual or perceived conflicts of interest suggests a need for prohibiting outside employment.
Another key provision would clarify the limited nature of confidentiality of information about license applicants. Although the existing Gaming Act contains a narrow definition of confidential information, the Board has taken a very broad interpretation of this provision and has deemed all information provided by an applicant to be confidential. This bill would open up all information that is not specifically designated as confidential, such as trade secrets or personal medical and financial data about applicants.
Fumo and Orie also propose to eliminate the section of the law that gives jurisdiction over all slots license appeals and slots-related zoning appeals directly to the Supreme Court. Intended to expedite appeals that may have delayed the opening of the casinos, it has had the effect of eliminating the important appellate record that is typically created at the Commonwealth Court level.
Another measure within the bill expands the ban on campaign contributions from licensed casino operators to those who have registered with the Gaming Board as "licensed casino representatives." This would prevent casino operators from making contributions indirectly through paid lobbyists.
"All of these provisions would create greater public confidence in Pennsylvania's Gaming Act and Gaming Control Board," Orie said. "That confidence has been shaken recently, and we must restore the complete integrity of the process in the public eye."
The bill would also require the two casinos licensed for Philadelphia to obtain authorization from the General Assembly, and to compensate the taxpayers of Pennsylvania, for the use of public land before they are allowed to commence gambling operations. Currently, the two licensed casinos plan construction on land that is partially within the river bed of the Delaware River. To date, they have not sought a grant of these riparian rights from the Commonwealth.
Among the other amendments in the Fumo/Orie proposal, the bill would:
-require a two-third Senate confirmation of all future members of the Gaming Board.
-require oral hearings with the right of cross examination for all matters before the Board.
-prevent an applicant from borrowing the initial $50 million license fee and require a surety bond from the licensee when the licensee is also the developer of the project.
-require disclosure and posting on the Internet of information concerning the true identity of the controlling interest in a gaming facility.
-require the board to adopt regulations, in addition to those already in place, maintaining the separation of prosecutorial and adjudicatory functions.
-authorize and encourage the Board to seek the advice of the Ethics Commission and the Attorney General on ethics and related issues.
-prohibit Gaming Board officials from gaining employment in gaming related fields for two years.
"We have learned a lot in the four years since we passed the original law. We have casinos that are running smoothly and have been very successful in generating revenue that is reducing taxes for our citizens. But we have also encountered some problems, and it is critical that we correct them now while Pennsylvania's gaming industry is still young," Fumo said.
Senators and representatives, Republicans and Democrats, have proposed all sorts of changes to the gaming act since it becamse law four years ago. Only a few changes have made it past the governor's desk. Will these ones?
... The gaming board is set to meet to Thursday to discuss the Bluhm-Barden casino switcharoo.
... You know what? Let's just scrap the whole thing. No casinos for anybody:
"A statewide anti-casino group is urging state gambling regulators to hold off indefinitely on approvals of new slots licenses and license transfers from one casino owner to another. Casino-Free Pennsylvania leader Dianne Berlin said yesterday that ongoing problems with three slots parlors -- including Don Barden's casino in Pittsburgh and a proposed Centaur Inc. racetrack/casino in Lawrence County -- show the need for such a moratorium."
Dispatches from the east
Speaking of those two Philadelphia casino sites, Gov. Ed Rendell is planning to meet with legislators, the Philadelphia mayor and casino investors on Aug. 21 to discuss the progress, or lack thereof, at the two casino sites.
... Atlantic City's casino revenues took yet another battering in July:
"Altogether, the 11 casinos took in $438.7 million in revenue at the slot machines and gaming tables, representing a 6.6 percent decline compared with $469.6 million in July 2007, according to figures released Monday by the New Jersey Casino Control Commission ... Casinos have been hammered by the lagging economy, high gas prices, extra competition from slot parlors in Delaware, Pennsylvania and New York and the lingering effects of Atlantic City's partial smoking ban."
... An update on the Bethlehem, Pa. casino.
Odds and ends
The PG editorializes about Centaur Inc. and its plans for a Lawrence County casino, whicg says it is still negotiating with its lenders ... Casinos are on the ballot in Ohio, leaving one small town to ponder the ramifications of a slots parlor close by ... The Buffalo, N.Y., casino is still under construction, but the nearby temporary casino is bringing in some nice numbers ... Will Massachusetts put casinos on the ballot? Gov. Deval Patrick is keeping his cards close to the vest.
Aug 08 2008
Can you hear the death rattle? Or is that just my transmission?:
"An Indianapolis company's long-delayed plan to build a $430 million racetrack/casino in Lawrence County has gotten some dire financial news and could be on life support. A financial news service called Debtwire said yesterday that lenders for Centaur Inc. will 'push to abort [the] Pennsylvania racino project [and] get repaid early.' The news service said that according to its unnamed sources, "tightening credit markets" had "pushed [Centaur] into a corner'' and as a result, its proposed Valley View Downs racetrack/casino west of New Castle may become a victim of roiled financial markets."
A Valley View spokeswoman said the company still plans to build the casino. If the project doesn't collapse, it likely means that Centaur -- much like Don Barden's PITG Gaming -- may have to break ties with its original financiers and go in search of news ones.
So does this news crack open the door for a casino south of Gettysburg, near the Maryland border?:
"One person who might have seen the writing on the wall -- and is rooting for the collapse of the Centaur deal -- is Gettysburg motorcycle dealer David LeVan, who two years ago wanted to build a controversial stand-alone casino just outside Gettysburg, and now thinks the Centaur failure may provide him another opening. 'This doesn't come as a surprise to me. It's one of the reasons I went public a couple of weeks ago,' he said yesterday. He said he wanted to send a message to the Harness Racing Commission and the gaming board, letting both know there are other options."
... The Beaver County Times version, from a day ago: "Indiana-based Centaur Inc. might have to step aside as sole owner of a proposed horse track and slots casino in Lawrence County and look for financial help from a private investment group, a county official said Thursday. Lawrence County Commissioners Chairman Steve Craig, responding to reports that the $425 million Valley View Downs project is experiencing serious financial trouble, said he still thinks the facility will be built. It just might not be built exclusively by Centaur, he said."
Viva La Resistance!
"Casino-Free Philadelphia, a citizens group that strongly opposes the sites for both casinos to be built in Philadelphia, may be getting physical. The group plans to conduct a 'training session' on Saturday in Philadelphia that's designed 'to teach community members how to occupy the proposed casino sites in the event the casinos try to break ground.' In a news release today, the group added, 'We will practice blockade techniques, such as chaining ourselves to the fence' around each site."
Dispatches from the border
The Donald may have to shopping at one of those discount toupee places:
"Trump Entertainment Resorts, the casino company founded by Donald Trump, reported a wider second-quarter loss as its Atlantic City properties attracted fewer gamblers. The loss from continuing operations was $16.5 million, or 52 cents a share, compared with $16.2 million, or 52 cents, a year earlier. Revenue fell 4.8 percent, to $177.9 million, from $186.8 million, the company said in a statement."
But another company sees promise in slumping Atlantic City, and doesn't plan to shed its big beachfront property:
"Las Vegas-based Pinnacle Entertainment company plans to hold onto its land on and near the Atlantic City boardwalk until credit markets improve and it can build its mega-casino project, Chairman Dan Lee said Wednesday. The theme of the casino, a closely held secret for nearly two years, will be based on a beach house."
... To the Buckeye State!:
"The group MyOhioNow [has] turned over petitions in an effort to build a casino in Southwest Ohio's Clinton county. MyOhioNow officials say they've turned in about twice the number of petitions they'll need to get the question on the November ballot. They say the planned casino-resort off Interstate 71 would bring in about 5,000 new jobs, and they've also devised a plan that would help divide Casino revenues among all 88 counties in Ohio."
... To the Old Line State!:
"Once an elite horse racing state that dominated the mid-Atlantic, Maryland has been brought down by a competitive imbalance with tracks in neighboring states that grew powerful after slot machines were legalized and began fueling race purses. The Maryland industry hopes a slots referendum going before voters Nov. 4 will level the playing field, but for now it struggles. Small, however, sees more to it. The MTHA for years has set as its ideal year-round racing in the state, but Small believes there is a glut of racing in the mid-Atlantic and trainers should not expect stall space to be subsidized when the tracks are out of season."
Odds and ends
West Virginia continues to rake in big revenues from newly legalized table games ... The (Jason) Bay state says it could reap $600 million anually for the state's coffers if it legalized casinos ...MTR Gaming may shed some properties to cut debt ... The lastest on the Louis DeNaples case out east ... Harrah's releases its second-quarter results.
Chicago finally gets some shows to go with all of those slots:
"Metropolitan Chicago is the third largest gambling - or, as the casinos prefer to call it, gaming - market in North America. But unlike in Las Vegas, where singularly spectacular shows and concerts have been a desert draw for decades, Chicago-area casinos have never expended much energy on entertainment ... Next weekend, that's all going to change. And it's likely to seriously roil Chicago's hyper-competitive market for live shows. The catalyst is the opening of The Venue at the Horseshoe Casino, a huge, 2,500-seat theater that's a key part of the newly expanded Horseshoe, a Hammond, Ind., entity now owned by the Harrahs Corp., a behemoth of the gaming industry that also owns the Caesar's Palace, Bally's and Flamingo brands, as well as its chain of namesake casinos."
Can't wait for that first Celine Dion concert.
Aug 04 2008
Turns out last week's "deadline" for some kind of decision on the proposed casino ownership restructuring was more of a soft target:
"The primary contractor for the North Shore casino will stay on the job for now, confident that a group led by Chicago billionaire Neil Bluhm will be able to complete a deal to take over the troubled project. Dan Keating III, chairman of Philadelphia-based Keating Building Corp., said he had the right, as of Wednesday, to terminate his contract with Don Barden's company, PITG Gaming LLC, but won't do so. He said he believes that Mr. Bluhm and his group, Pittsburgh Gaming Holdings, are 'very close' to closing on their financing and getting approval from the Pennsylvania Gaming Control Board to assume control of the financially troubled casino project. Mr. Keating said subcontractors on the project, who as of yesterday had the right to change the terms of their contracts, including possible price adjustments, agree with his position.
"For now, the status quo will remain, he said. 'Nobody is walking. We're all of the opinion and belief that this deal can be done and that ... [Mr. Bluhm's] a very good owner who is capable of financing it. If we didn't believe that, we would have pulled the plug already,' he said."
... Maybe Dan Keating is convinced, but two state senators don't seem to be:
"Claiming a 'shroud of secrecy' surrounds the quest by Chicago billionaire Neil Bluhm and his group to take over the troubled North Shore casino, two state senators pressed yesterday for the release of detailed information involving ownership stakes, financing and other aspects of the bid. ... In a letter to Pennsylvania Gaming Control Board Chairwoman Mary DiGiacomo Colins, Sens. Jim Ferlo, D-Highland Park, and Jane Orie, R-McCandless, said they have tried without success since July 14 to obtain information relating to the new ownership's corporate structure, debt financing, organization charts and other matters."
... Don Barden might find this hard to believe, but now might actually be a good time to buy a casino:
"The stock prices for many casino operators have lost half of their value in the past few months, but is this the end to gambling as we know it or is now the best time to buy a casino? We are inclined to believe the latter and think that the casino gambling decline is close to an end."
Buy low, sell high, as they say.
... the Inquirer's take on the Barden / Bluhm brokering:
"In classic Harrisburg fashion, key lawmakers and casino operators huddled in private to cobble together a rescue plan. One lawmaker even placed calls to state gaming board officials, raising eyebrows. Gov. Rendell met with State Rep. Dwight Evans and Barden. Also on his speed dial was Neil Bluhm, a billionaire real estate developer from Chicago who is an investor in the proposed SugarHouse slots parlor in Philadelphia. Evans, in turn, called state Gaming Control Board Chairwoman Mary DiGiacomo Colins and board member Jeff Coy. Next thing you know, Bluhm's been dealt a blackjack. His private-equity fund emerged as the majority owner of the Pittsburgh slots parlor after agreeing to kick in $120 million to complete the project. To paraphrase Woody Allen: 80 percent of success is showing up - especially with a cashier's check."
... PennLive editorializes on the same subject.
From the mailbag
You might have missed this:
The Gaming Board has shown itself to be incompetent at best, corrupt at worst. First, in Philadelphia, they license a guy who may be connected to organized crime. Then, in Pittsburgh, they license a guy who had no money of his own to invest in his casino. How does this happen? The entire board should be scrapped, investigated and made to pay for taxpayer losses from their own pockets. And the pockets of their children and so on until we have the free arena we could have had. My entry in Neil Bluhm's casino naming contest is "The Casino to Nowhere" since it is near the former Bridge to Nowhere. Plus it leaves the taxpayers nowhere as far as property tax relief goes!
TOM KERIN
Bethel Park
Keep the e-mails coming. We've been getting a bunch of them the last few weeks, since the whole Barden-Bluhm partnership began to unfold. Or, if you want to talk amongst yourselves, register here to use the P-G's commenting features.
DO NOT DISCARD ...
... monthly statement enclosed.
Anti-casino forces would have preferred no casinos in the first place, obviously, but now that casinos are here, they'd like the casinos to send statements to their frequent, card-carrying players, to tell them how much they've won or lost in a given month (the thinking being that problem gamblers are more likely to recognize the problem if they see how much they lose each month):
"A bill before the General Assembly would require Pennsylvania's casinos to send monthly statements to gamblers on their winnings and losses. Such a step would be a protective measure, said state Rep. Paul Clymer, R-Bucks County, the bill's sponsor. The measure was debated at a hearing featuring lawmakers, casino executives and gambling counselors. Tom Bonner, vice president and general counsel of the company that operates the Philadelphia Park Racetrack and Casino, said regular statements wouldn't protect compulsive gamblers. He also said they would cost too much."
The Casino Journal is shocked -- shocked! -- to learn that the casinos are against this.
Dispatches from the border
Dayton Business Journal: "Casino backers from MyOhioNow.com will submit enough signatures on Tuesday to put plans for a $600 million resort on the November ballot, those pushing the initiative said. Rick Lertzman, who heads MyOhioNow with Brad Pressman, said the group will submit the signatures to Ohio Secretary of State Jennifer Brunner. The group will also discuss its fall campaign and disclose the final total of signatures at a media conference in Columbus, he said. Beachwood-based MyOhioNow is pushing an initiative to develop Ohio's first gambling casino. The group said in June it had collected more than 400,000 signatures to bring the issue to a statewide vote."
... From the AP: "MTR Gaming's second-quarter loss widened despite an 11 percent revenue boost from adding table games at its West Virginia thoroughbred track. Chester-based MTR said today it lost $2.3 million, or 8 cents per share, in the quarter, compared with a loss of $502,000, or 3 cents per share, in the same period last year."
... Ocean City, Maryland, is still worried that legalizing slots will draw tourists away from the state's most popular waterfront destination:
"In November, Maryland voters will be asked whether to authorize up to 15,000 slot machines at five venues across the state, resolving a bitter fight that has paralyzed Annapolis politicians for years. Ocean Downs, which opened in 1949, is among two existing racetracks that could be eligible for a share of the machines -- up to 2,500 -- if voters statewide give their blessing ... Hotel and restaurant owners in the neighboring tourist town of Ocean City have emerged as the most vocal opponents of the plan, claiming that slots at Ocean Downs could undermine their businesses and quality of life."
Odds and ends
Las Vegas is going green ... West Virginia hopes to win back some of the customers lost to Pennsylvania casinos ... Anti-casinos forces in Philadelphia sue a judge ... The parent of the Bethlehem Sands has sky-high revenues, but a quarterly loss ... More on the Battle of Gettysburg, Part III: Return of the Casino ... Update on De Scandal in De Poconos.
Ill-gotten fruit has a bitter taste:
"Last week, officials in the Warrior Run (Pa.) School District said they received a check from a local Amish farmer who refused to accept his share of the state's gambling profits. The move is in keeping with an admirable Anabaptist tradition of conscientious objection. Faced with governmental policies that conflict with their religious beliefs, members of the Amish and Mennonite community have long sought ways to satisfy their community responsibilities without sacrificing their moral grounding."
Jul 28 2008
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."
Jul 18 2008
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