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Recession Prompts Nemacolin Woodlands Resort to Reconsider Bid
for Casino License from Pennsylvania Gaming Control Board

By Mike Wereschagin, Tribune-Review, Greensburg, Pa.McClatchy-Tribune Regional News

April 22, 2009--Nemacolin Woodlands Resort is considering whether to apply again for a slots casino license, now that state regulators have relaxed some requirements and re-opened the application process.

"We're aware of the situation. It's been kicked around," said Nemacolin spokesman Jeff Nobers. "I wouldn't say anything is imminent."

The state Gaming Control Board on April 8 awarded one of two resort casino licenses, giving approval to Valley Forge Convention Center to open a 500-slots machine casino in King of Prussia.

The only other applicant, Fernwood Hotel & Resort in the Poconos, still is trying to cobble together funding for its proposal; therefore, the gaming board reopened the application process for 90 days.

Nemacolin passed the board's background investigation in 2006, but withdrew its application in November that year. Officials at the 335-room Farmington resort couldn't persuade regulators to relax rules on who would be allowed to play at the casino.

Among the hang-ups was the board's requirement that patrons spend at least $25 at the resort before being allowed into the casino. The goal was to make the slot machines an amenity at the resorts -- rather than the main draw. Resort-casino licenses cost $5 million -- one-tenth the price of licenses at larger casinos, which can have as many as 5,000 machines.

About a year after Nemacolin withdrew, the gaming board reduced the $25 fee to $10 and allowed resort-goers to visit the casino within 72 hours of spending the money, rather than 24 hours.

"Is the $10 a lot more palatable than the $25? Yeah, it is," Nobers said. "They've shown a willingness to be a lot more flexible about how they do things."

Of more concern now, however, is the recession, Nobers said.

"The hospitality industry is not unlike a lot of other industries right now," he said.

Cowed by shrinking profits and public outrage over corporate largesse, executives have curbed the corporate getaways on which resorts, such as Nemacolin, depend.

"From a financial standpoint, the landscape is certainly different than it was three years ago," Nobers said.

Wary lenders have imperiled three casino projects -- temporarily stopping construction on the one now nearing completion on Pittsburgh's North Shore; indefinitely postponing Valley View Downs in Lawrence County; and undermining Fernwood's bid for the last resort-casino license.

"The financing that we had put together two years ago, some of those players are no longer available," said Fernwood spokeswoman Gina Bertucci, adding that Fernwood is aiming to have financing in place within the gaming board's 90-day window.

Despite economic woes, Pennsylvania casinos continue to bring in millions of dollars a week -- even as the gambling industry elsewhere in the country stumbles. The numbers are enticing, Nobers said.

"An opportunity (to get involved in) that comes along, and you have to give it due consideration," Nobers said. "But there's a long road to go between giving it serious thought and actually going back to the Gaming Control Board and saying: 'We're back in this thing.'"

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To see more of the Tribune-Review or to subscribe to the newspaper, go to http://www.pittsburghlive.com/x/tribunereview/.

Copyright (c) 2009, Tribune-Review, Greensburg, Pa.

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