Hearings Scheduled for Proposed Pennsylvania Racinos

Hearings for the companies seeking licenses to operate slot machines at racetracks have been set by the Pennsylvania Gaming Control Board, which could vote on conditional licenses in late September.

The board has set Sept. 11-12 for hearings on conditional licenses sought by six racetracks, two of which have not yet offered live racing. On the Thoroughbred side, hearings will be held Sept. 12 for Mountainview Thoroughbred Racing Association (Penn National Race Course) and Greenwood Gaming and Entertainment (Philadelphia Park). The hearing for Presque Isle Downs, a track under construction near Erie, is set for Sept. 11.

Three hearings for Standardbred applicants are set for Sept. 11: Washington Trotting Association (The Meadows), Downs Racing (Mohegan Sun at Pocono Downs), and Chester Downs and Marina, which is under construction in Chester but scheduled to open for live harness racing in September.

Licensing hearings for non-track slots casino applicants are scheduled for October and November. Only the tracks are eligible for conditional licenses because they already are gambling enterprises licensed by the two state racing commissions.

The racetracks will have a second round of hearings Dec. 4-5 for permanent slots licenses, but it is possible slots could be operating before then.

"The whole purpose of conditional licenses is to get (the tracks) started faster," said Nick Hays, director of communications for the gaming control board. "Hypothetically--but I don't think it will happen--once a license is issued, they could open their doors. Each one has its own business plan, and once they receive a license, it's pretty much up to them."

The Pittsburgh Post-Gazette reported that gaming control board chairman Tad Decker said the board could vote on licenses at its Sept. 27 meeting.

Greenwood already has begun demolition work on the first and second floors of the grandstand at Philly Park to get the facility ready for slots. (The racing operation is now concentrated on the third floor.) The Bensalem Township track could be the first Thoroughbred facility in the state to turn on the machines should it be licensed in a timely fashion.

"The expectation here is that, if the license is issued in late September or early October, we will strive to be open in December," Greenwood chief executive officer Hal Handel said.

In its second-quarter earnings report, Penn National Gaming Inc., which owns Penn National near Harrisburg, said construction on the integrated racing and slots facility called the "Hollywood Casino at Penn National" would begin in August. PNGI chairman Peter Carlino said, because it has been two years since the plan was conceived, the construction budget has jumped 18% to $310 million.

When construction does commence, the Penn National project is expected to take 12-14 months. Racing continues year-round at the track, and because the old grandstand is to be demolished, a temporary betting facility similar to one of the company's off-track wagering parlors is now in use near the top of the stretch.

Officials at MTR Gaming Group, which is building Presque Isle Downs, have said live racing would commence in late 2007. Thoroughbred racing in the area hasn't been held since Erie Downs (previously Commodore Downs) went out of business in the 1980s.

The Pennsylvania Race Horse Development and Gaming Act of 2004 provides that 12% of gross slots revenue go toward purses and breed devleopment. The racing industry also has an interest in non-track slots casinos because revenue from them could push racing's share to 18% in some instances.

The slots licensing hearings, to be held in the state capital of Harrisburg, will provide the gaming control board with an opportunity to question applicants about their character, operational and financial suitability, community impact, diversity plans, plans for the prevention of compulsive gaming, and other issues. The hearings are open to the public.