Gambling board examines $280 million track sale

Monday, Feb. 21, 2005 | 9:15 a.m.

HARRISBURG, Pa. -- The Pennsylvania Gaming Control Board has rented office space across the street from the State Capitol, hired a skeleton staff and plowed through a few initial meetings.

Its growing list of challenges now includes figuring out what, if anything, it should do about the recent sale of an aging Wilkes-Barre harness-racing facility for the eye-popping price of $280 million.

Penn National Gaming Inc. pocketed a 500 percent return on a decade-old investment when it unloaded Pocono Downs to the Connecticut-based Mohegan Tribal Gaming Authority.

Divesting itself of the 400-acre property helped Penn National steer clear of a prohibition against casino companies owning more than a one-third interest in a second Pennsylvania slots facility and generated cash to pay off debt and fund other investments.

But questions have arisen about the nine-digit sale price, particularly because a provision in the law was designed to avoid gold-rush profiteering off the sale of racetracks, which were practically guaranteed a slots license by the law.