Pa. slots odds called even

Vicki Smith

Wednesday, Nov. 12, 2003 | 9:26 a.m.

CHESTER, W.Va. -- Slot machine legislation has a 50-50 chance of passing in Pennsylvania this year, and any successful bill will have to allow slots at non-racetrack settings, an aide to that state's lawmakers said Tuesday.

"It is very easy for a small number of legislators to group together to block a bill. Only a bill that is written to appeal to a broad consensus will stand any chance of passing," warned Christopher Craig, legal counsel to Pennsylvania state Sen. Vincent J. Fumo, D-Philadelphia.

Fumo helped craft a bill that passed the Pennsylvania Senate in June and now lies stalled in the House.

"Quite simply, either everyone benefits from the bill or no one will benefit," Craig told hundreds of participants at Racino 2003, a two-day conference at Mountaineer Race Track & Gaming Resort in Chester for executives in the racetrack casino industry, also called "racino," public officials and others.

Allowing slots only at tracks would leave major Pennsylvania markets untouched in districts where lawmakers support slots but there are no tracks to host them, Craig said.

Leaders in the racetrack casino industry, however, bristled at the idea that any state would allow slots in non-track settings.

"Racinos sell better to the public and provide economic development and jobs that a slot parlor just can't do," said Ted Arneault, CEO of Mountaineer's parent, MTR Gaming Group.

MTR also owns the Speedway Casino in North Las Vegas and the Scioto Downs harness racing track in Columbus, Ohio. The company is licensed to build the Presque Isle Downs thoroughbred track near Erie, Pa., and it has been lobbying for slot machine legislation in both Ohio and Pennsylvania.

"This isn't just slots. It's entertainment. It's the agrarian business we help develop," Arneault said. "We are much more important to economic development than a slots parlor could ever be."

Denis McGlynn, chairman of Dover Downs Entertainment in Delaware, said such legislation opens the door for full-blown casinos -- a move that could devastate the slots-only racetrack casinos.

Paul Dorsey, policy director for the Maryland lottery, said his state envisions a similar setup, with licenses for a total of six properties. As many as four would be racetracks; the rest would be non-track venues either privately owned and operated or run by the state.

Slot machine legislation died in Maryland last year, and Dorsey said he could not predict how it will fare next year. But public hearings the Maryland House Ways and Means Committee has held make clear that slot-based casinos will never become widespread, he said.

Kentucky legislators also may revive failed slot machine legislation next year, but Turfway Park President and CEO Robert Elliston was cautious about predicting passage.

However, a recent newspaper poll found 56 percent of those surveyed supported slots at the tracks. That number dropped when the respondents were asked if they would support them in non-track settings, Elliston said.

Advocates will push for a statewide referendum, which Elliston said he believes Kentucky's newly elected Republican governor would support.

Craig, meanwhile, said Pennsylvania lawmakers have hammered out key issues, agreeing to a tax structure that lets the tracks keep a 46 percent cut.

The legislators are not driven by the need to fill a budget hole, he said. That will be done with tax increases.

Rather, Pennsylvania lawmakers want to generate $1 billion a year to reduce property taxes. But placing the machines solely at tracks would not guarantee sustainable revenue, Craig said.

Only four racetracks currently operate in Pennsylvania. Two others have obtained licenses but have not yet been built. Another two licenses are available, Craig said.

"If both were approved, Pennsylvania could have the highest person-per-horse track ratio in the nation and still not provide $1 billion needed for property tax relief," he said.

"Slots limited to tracks is neither economically nor politically feasible."