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PNGI Invests in Planned PA Racetrack Casino

The proposed harness track would join a crowded racing and gaming market.

Penn National Gaming Inc., in partnership with another company, has submitted a plan to build a racetrack casino in Lawrence County, Pa., not far from its proposed Hollywood Mahoning Valley Race Course near Youngstown in neighboring Ohio.

PNGI and Endeka Entertainment have submitted a proposal to the Pennsylvania Gaming Control Board for the $225 million project, which calls for 1,250 slot machines, 40 table games, 10 poker tables, and a harness racetrack. The tab includes $66.5 million in license fees.

Endeka Entertainment last year obtained regulatory approval to obtain the stock of American Harness Tracks, a company that previously intended to build the facility. The Lawrence County project has stalled for years.

The facility would be called Lawrence Downs Casino and Racing Resort.

PNGI in a release said it will provide the $50 million license fee bond, $15 million of which will be funded through a loan. PNGI said it will acquire a warrant to purchase a one-third ownership interest in the facility; it can't have a larger share because it already owns Hollywood Casino at Penn National Race Course in Pennsylvania.

"With 11 wholly owned or joint-venture pari-mutuel racing facilities, Penn National owns the most racing facilities of any operator in North America," PNGI president and chief operating officer Tim Wilmott said. "The company has a long-standing commitment to the growth of horse racing in Pennsylvania, and the proposed Lawrence Downs Casino and Racing Resort is a clear indication of our belief in the industry's future."

Pennsylvania has three harness tracks, including The Meadows Racetrack & Casino just south of Pittsburgh. The Lawrence County facility would be built about 60 miles north of Pittsburgh.

The Meadows races year-round and operates an off-track wagering facility in New Castle in Lawrence County. Lawrence Downs Casino and Racing Resort would offer year-round simulcasts as well as live racing.

PNGI broke ground May 29 on Hollywood Mahoning Valley, which will offer Thoroughbred racing and video lottery terminals. It will be located only 20 miles from the proposed Lawrence County track.

It all adds up to a crowded marketplace. Mountaineer Casino, Racetrack & Resort and Presque Isle Downs & Casino, both owned by MTR Gaming Group, are located in proximity as well. The Youngstown area is a major market for Mountaineer.

PNGI said it will develop and manage construction of Lawrence Downs. Thereafter, "the parties anticipate that Gaming and Leisure Properties Inc., the real estate investment trust that, subject to regulatory approval, will be publicly traded and hold substantially all of PNGI's real property assets following the proposed separation of the company's operating assets from its real property assets, will purchase the facility and lease it back to the owner."