Thursday, January 7, 2010

PENNSYLVANIA GOVERNOR TO SIGN TABLE GAMES INTO LAW

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The following installment of The Tribe In The Media is a Philadelphia Inquirer update stating that Pennsylvania Governor Ed Rendell is expected to sign a bill today that will permit table games at the slot parlors in that state.

The tax rate on table games will be 16 percent compared to about 60 percent on slot machine revenue. The lower table game state tax rate versus the tax on slot revenue is due to the fact that table games have much higher wage costs associated with them, requiring seven to eight employees per table according to some estimates.

Slot parlors will be required to pay a fee to operate table games in addition to the 16 percent tax rate. The Mohegan slot parlor-racetrack will need to pay a $16.5 million fee for the table games license which would allow for up to 250 table games in the facility even though it is believed that the Mohegan facility would not deploy anywhere near that number of tables.

In a separate article published today on the Scranton Times Tribune website, Mohegan Sun at Pocono Downs President and CEO Robert Soper said, ¨plans are moving forward to add about 60 table games and a poker room, a plan that will result in 400 new jobs.¨ That same article focused on the revenue figures for Pennsylvania´s slot parlors and said that revenues at Mohegan´s Pocono Downs increased 19 percent last year when compared to the prior year. The article fails to mention that the 19 percent revenue increase is in part, if not largely, a result of a 100 percent increase in the number of slot machines installed at the Poconos facility in the expansion of July 2008.

Rendell to sign table-games bill
By Amy Worden and Suzette Parmley
The Philadelphia Inquirer
January 7, 2010

HARRISBURG - It's a done deal at last. Table games are coming to Pennsylvania by the end of the year.

By a vote of 103-89, legislation to legalize poker, blackjack, roulette, and other table games received long-awaited final approval last night in the state House. Gov. Rendell plans to sign the bill today.

The gambling expansion, coming as the commonwealth struggles to pull itself out of the recession, is projected to create thousands of jobs and pump $250 million into the state's revenue-starved coffers.

By patching that budget hole, the bill averts the threatened layoff of 1,000 state workers and concludes the excruciating 2009-10 budget process - just weeks before Rendell is due to unveil next year's state spending plan.

A spokesman for the state Gaming Control Board said it would take from six to nine months to get table games up and running in the nine operating casinos - some of which have already marked off whole expanses of floor space to make way for the new games.

Supporters praised the bill - which amends the five-year-old law legalizing slots casinos - as an economic-recovery engine and a good-government measure, tightening restrictions for gaming board members, casino owners, and their employees.

"This is a commonsense, bipartisan piece of legislation that makes our gaming facilities more competitive, improves the public's confidence in gaming, raises money we desperately need . . . and most importantly helps put thousands of people to work in a brand-new industry," said Rep. Dante Santoni (D., Berks), chairman of the Gaming Oversight Committee. "Allowing table games is the right thing to do - not just for today, but for the future."

Critics made a last-ditch attempt yesterday afternoon to derail the bill for its provision allowing on-site credit to gamblers - and for what they called "pork-laden" language directing a slice of casino revenue to a handful of hospitals, schools, and other entities in certain lawmakers' districts.

As one foe pointed out, the 230-page bill makes the pork permanent: Those entities will get that slice every year.

"We are seeing Washington, D.C.-style earmarks under the guise of local impact," said Rep. Curt Schroder (R., Chester). "Just because a certain interest has a sugar mama or sugar daddy in the district, they will get funding in perpetuity."

Philadelphia-area beneficiaries of the earmarks include Lower Bucks Hospital in Bristol Township and Delaware County Community College, which stand to receive millions because of their proximity to racetrack casinos. The college's share will take the form of scholarships for Chester Upland School District pupils.

Under the legislation, racetrack casinos would pay a license fee of $16.5 million and get 250 gaming tables, while smaller resort casinos would pay a $7.5 million license fee and get 50 gaming tables.

Casinos would also be permitted to host large table-game tournaments.

Initially, table games would be taxed at a rate of 16 percent - 14 percent directly to the state, with 1 percent each to the casino's county and its municipality.

The state's share would go to the general fund to fill budget shortfalls until the state's Rainy Day Fund reaches $750 million. After that, all table-game revenue will go toward property-tax relief.

The measure sets aside $3 million a year for gambling and other addiction-treatment programs.

Rep. W. Curtis Thomas (D., Phila.) noted that while the bill would likely create hundreds of jobs in Philadelphia, he and other legislators came up short in their effort to send the local share from the two planned Philadelphia casinos to nonprofit groups serving communities closest to casino sites. Instead, the local share will go to the city to divvy up.

Thomas said he had received assurances from Mayor Nutter that the money would, indeed, go to such community programs. He exhorted Nutter and City Council to make sure "that these good communities are not destroyed as a result of this opportunity."

The bill's passage comes at a time when the national gaming-proceeds pot is shrinking - even as more casinos open. Experts warn that revenue from games may not keep pace with states' rising costs.

Nonetheless, casino officials - at least those in Pennsylvania - cheered the news from Harrisburg. Operators at venues such as PhiladelphiaPark Casino & Racetrack in Bensalem began making phone calls last night to set in motion plans to install games and boost staffing.

"Table games will help the Pennsylvania gaming industry better compete against Atlantic City and other neighboring gaming jurisdictions," said Eric Schippers, spokesman for Penn National Gaming Inc., owner of the Hollywood Casino near Harrisburg. He said the casino would expand and offer "hundreds of new full-time jobs."

Meanwhile, Atlantic City casino operators were ramping up for an interstate marketing battle for patrons. Table games account for about 30 percent of Atlantic City casinos' gambling proceeds.

Those casinos realize that figure will likely shrink, said Mark Juliano, chief executive officer of Trump Entertainment Resorts Inc., which owns the three Trump casinos in Atlantic City, "because it will be an area we did not have to compete with before."