Governor tries to slow gaming ‘gold rush’

George Strawley

Thursday, Jan. 30, 2003 | 9:38 a.m.

HARRISBURG, Pa. -- Gov. Ed Rendell met behind closed doors Wednesday with state regulators who oversee harness and horse racing to discuss a crowded field of applicants for new racetracks in Pennsylvania being fed by prospects of slot machines.

Rendell is seeking to curtail what he called a "gold rush" to snatch up the last remaining licenses in anticipation of the Legislature's allowing slot machines at Pennsylvania racetracks. The governor already asked the independent bodies to delay any decisions on the last remaining track licenses in the state pending the meeting.

"Stepping into the world of gambling should be a measured response," Rendell told The Philadelphia Inquirer for Wednesday's editions. "This almost looks like Sutter's gold the people are chasing in California during the gold rush ... I want these to be quality applications."

The state has three racing licenses it can grant, one for a thoroughbred track and two for harness racing. The decisions on the licenses are up to the state Horse Racing and Harness Racing commissions.

The closed-door luncheon meeting will allow Rendell "to integrate horse racing into his statewide development plans," said spokesman Tom Hickey, who described the session as an informational meeting in which the governor and commission members could share their views.

"The state is facing a huge deficit," Hickey said. "It means that horse racing and the possibility of slots at race tracks is an important part of the state's economy."

Rendell wouldn't comment on the meeting, Hickey said Wednesday.

Winners in the battle over the remaining licenses stand to cash in on hundreds of millions of dollars the tracks are expected to bring in. Rendell's economic plan depends on slot machines to bring in about $500 million a year in state revenue to fund schools.

Rendell's concern is that granting licenses to weak companies could hurt his plans. He has criticized the licensing process, saying it operates on a first-come, first-served basis rather than weighing proposals on their merits.

Rendell has no legal power over the commission, which consists entirely of appointees of former Govs. Tom Ridge and Mark Schweiker. He does, however, hold the power to reappoint commissioners.

Rendell a week ago asked the Harness Racing Commission to delay consideration of a harness racing license for a group of investors who want to build a $20 million track in Chester, Delaware County. That followed a delay of an original Jan. 9 meeting at the request of former Gov. Schweiker.

Wary of outside interference with a commission that is not supposed to take orders from the government, Delaware County officials on Thursday plan to hire a special counsel to look into the delay.

"We're doing this because we feel after closely examining all Pennsylvania law that there's been undue influence on the part of two gubernatorial administrations," said J. Patrick Killian, commerce director for Delaware County.

The $20 million Chester Downs plan calls for a five-eighths-mile track, a marina, two restaurants, an amphitheater and a simulcast betting center on a 61-acre former industrial site in one of the state's most impoverished cities.

Chester Downs is not the sole track looking to open.

Greenwood Racing Inc., which operates Philadelphia Park, has applied for a license to open a thoroughbred track called Seaport Park in Chester.

Philadelphia Trotters and Pacers, a company owned by longtime Rendell friend Manuel N. Stamatakis and two others, wants to build a track on a 90-acre site on a portion of the Philadelphia Naval Shipyard.

Racetrack operator Penn National Gaming is seeking a license under its subsidiary W-B Downs, which is represented by Rendell's old law firm, Ballard, Spahr, Andrews & Ingersoll.

Indiana-based Centaur Inc. applied on Dec. 27 for a harness license for a track to be called Valley View Downs in southern Beaver County.

Magna Entertainment Corp. of Ontario said its MEC subsidiary, which owns The Meadows harness track in Washington County, has applied to the state to open a mile-long thoroughbred track near Pittsburgh International Airport. The track would be called Allegheny Downs and would be built on 172 acres of former farmland.

Last year the Horse Racing Commission awarded a separate thoroughbred license to Presque Isle Downs for a track in Erie.