|By Tracie Mauriello, Pittsburgh
Post-GazetteMcClatchy-Tribune Business News
Dec. 21, 2006 - HARRISBURG -- Gaming regulators gave the boot to The Donald in Philadelphia and rejected a controversial plan for a slots parlor in Gettysburg when it handed out licenses for five stand-alone casinos in Pennsylvania yesterday.
While Philadelphia is about to become the largest U.S. city with casino gambling, Donald Trump won't be part of the action.
The state Gaming Control Board yesterday chose Connecticut's Mashantucket Pequot Indian tribe and the lesser known SugarHouse Gaming over the billionaire casino-owner and real-estate magnate.
SugarHouse operates two casinos in Niagara Falls, while the Mashantuckets operate Foxwoods Casino in Ledyard, Conn., the largest casino in the world.
The board also approved stand-alone licenses for casinos in Pittsburgh's North Shore, Bethlehem and the Pocono Mountains, plus permanent licenses for six racetracks previously granted conditional ones.
The board said yesterday it would reopen the application process for two resort casino licenses. Initially there had been two applicants for resort-casino licenses, but both withdrew.
The state law that legalized gaming prevents yesterday's eight rejected applicants from seeking resort licenses. However they can appeal the board's decision to award the stand-alone licenses to others..
To win, they will have to prove that the board's decision was arbitrary and capricious, in order words, that there was no rational basis for it, board spokesman Doug Harbaugh said.
Losing applicants reached yesterday said they had not yet decided whether to appeal.
"It's too early. We don't even know [the board's] rationale yet," said Brian Ratner, president of East Coast development for Forest City, which wanted to build a casino and entertainment complex at Station Square.
Board members would not discuss their votes yesterday, but are expected to explain their decisions in written opinions in the next few weeks.
Losing applicants have 30 days from then to file their appeals, which will go directly to the state Supreme Court.
Going straight to the state's top court will expedite the appeal process, said Gary Tuma, spokesman for state Sen. Vince Fumo, D-Philadelphia, chief proponent of the slots law. "We're cognizant that people are relying on casino revenues for property-tax relief."
By 2009 Pennsylvania is expected to have 14 casinos in all, the same number as in Atlantic City. Together, they are expected to generate at least $1 billion that will be used to reduce property taxes.
Gaming opponents, though, say the revenue isn't worth the traffic, noise, crime and gambling addictions casinos will generate.
Philadelphia Mayor John F. Street, who attended the gaming board meeting in Harrisburg, played down those concerns and said casinos are good for his city and for the state.
"There are people right now [who] are addicted to gambling. They just have to drive an hour and 15 minutes to go to Atlantic City," he said. "People already go to Atlantic City to fritter away their resources but we don't get any of the tax benefit from that."
Municipalities that host casinos will receive 2 percent of casino revenue, counties will receive another 2 percent and the state will get 34 percent to reduce property taxes.
For example, Don Barden's PITG Gaming, approved for a casino on Pittsburgh's North Shore, is expected to generate at least $7 million a year for the city, $7 million for Allegheny County and $119 million for statewide reductions in property taxes.
In Philadelphia, both stand-alone casinos will be along the Delaware River, about two miles apart. They are likely to greatly increase traffic along Interstate 95 and Columbus Boulevard, a busy local road that parallels the river.
The Mashantuckets' casino will open south of Center City in the Nicetown neighborhood and SugarHouse's proposed casino will be built to the north at the site of an old sugar plant in the Fishtown neighborhood.
Meanwhile, a third Philadelphia casino opened with a conditional license Tuesday at Philadelphia Park racetrack. After yesterday's board vote, a permanent license is on the way.
Gross terminal revenue in its first day of operation was about $500,000, a figure that fell short of expectations.
"The numbers are OK," said gaming board Chairman Tad Decker, who suspected Christmas preparations may be keeping people away from casinos this week.
Also receiving approval yesterday were Sands BethWorks Gaming, which expects to open in Bethlehem in six months, and Louis DeNaples, who plans to open a casino and resort at the former Mt. Airy Lodge in Monroe County.
The winning applicants -- who had nervously wrung their hands, shuffled their feet and tugged at their silk ties as they waited to hear their fate -- were jubilant once votes were cast, unanimously in every case.
"I've won things and I have done things in my life, but I can't remember anything this exciting. This is just so cool," said Barry Gosin, of Sands BethWorks, which plans to build a $600 million complex in an old steel mill. The plan calls for 5,000 slot machines, a 300-room hotel, a convention center, retail space, a museum of industrial history and offices for the Lehigh Valley Public Broadcasting station.
Meanwhile, SugarHouse developer Neil Bluhm, of Chicago, was "thrilled and delighted" to be approved.
"A lot of people are going to New Jersey to gamble. Our goal and expectation is to give them something special and make sure they stay right here in Pennsylvania," he said.
Eight others applicants were rejected. They had proposed projects ranging from a 23-story hotel and casino complex in the Poconos to one that included a promise to build a $290 million hockey arena for the Penguins in Pittsburgh.
While winning applicants congratulated each other, posed for photos and faced mobs of news reporters in Harrisburg's Forum theater, losers slunk out quietly, some armed with press kits ready to distribute if they had won.
"Denial will not be in any way because any of the unsuccessful applicants were unsuitable but because this board had the task of choosing between so many very, very suitable candidates," Mr. Decker said.
The board reached a consensus on the applications during a four-hour closed-door session Tuesday night. They had not previously discussed as a group the merits of the applications, which arrived last winter by the truckload in hundreds of bankers' boxes.
"People had some ideas before they came into the room [Tuesday night]. They'd done a lot of work on this," Mr. Decker said.
Some groups, including Casino-Free Philadelphia, say the board should have spent more time receiving input and deliberating.
Mr. Decker, though, said there was plenty of time for both during 18 public hearings last spring.
"We know about the traffic problems; we know the positives and negatives. People think we don't," Mr. Decker said. "What was the point of delaying it to receive more information on the same subjects?"
Gov. Ed Rendell rejuvenated a 25-year drive to legalize casino gaming in Pennsylvania by promising that it would help revive the state's declining horse-racing industry and by saying that slots revenue would be used to offset property taxes.
The Legislature legalized gaming in 2004 with an act authorizing up to 61,000 slot machines at 14 sites.
Tom Barnes contributed to this report.
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