House Bill 65 Leaves Gettysburg Vulnerable to Casino; also betrays horse industry

[Susan Star Paddock]

House Bill 65 Leaves Gettysburg Vulnerable to Casino; also betrays horse industry

Note: Category 1=racetrack + casino; Category 2= stand-alone 5000 slot casino; Category 3= Resort casino

Gettysburg is vulnerable to another casino attempt because a current bill would release two unused casino licenses to the highest bidder who will provide the greatest total incremental revenue to the state and best serve the undefined “interests of citizens”. Two possible licenses, one unused stand-alone casino from Philadelphia and one racino to be converted into a stand-alone casino could be auctioned to locations anywhere in PA.

One long term criticism of the PA Gaming law has been that casino licenses don’t cost developers enough and auctioning licenses has been suggested for years.  The PA House Gaming Oversight Committee had over a year of deliberation on HB 65, which outlines an auction process for obtaining a casino license.  

 On 5/2/12 it passed the House of Representatives 140-48 and is now in a Senate Committee chaired by Sen. Jane Earll. It may be voted on very shortly.

If the Senate Bill becomes law, the Philadelphia-based Foxwoods stand-alone, Category 2 casino, license revoked last year by the PA Gaming Control Board (PGCB) would become the first to be auctioned off to an approved applicant.  Pennsylvania gaming was supposed to save the horse industry, but this bill could also eliminate one or more racinos.  The troubled Valley View Downs Racino (Cat 1) could be changed into a Cat 2 casino license and also be auctioned off.

We asked for a buffer in this bill but none was inserted so the Gettysburg National Military Park and Adams County’s family-friendly small towns are at great risk for another casino fight in the near future, just as we are welcoming millions of tourists for the 150th anniversary of the Battle of Gettysburg and President Lincoln’s Gettysburg Address.  Though it should be easy to prove that a casino near Gettysburg could never serve the interests of the citizens, the new bill seems to force rapid decision-making on the part of the PGCB.

The Situation in Adams County

David LeVan proposed two previous Gettysburg area casinos, Crossroads in 2005-2006 (Cat 2) and Mason-Dixon in 2009-2011 (Cat 3), but neither ever received a single vote from the PA Gaming Control Board (PGCB). He had also attempted a racino in 2007 but was turned down by the Pa Harness Racing Commission and a racino attempt in 2008 also failed.

 Mr. LeVan has stated his intention to still pursue a casino in this area, but is currently embroiled in two legal battles. The first is a suit against the PGCB by Mason-Dixon Resort Casino to overturn the awarding of the resort casino license to Nemacolin Woodlands Resort. The second is a suit against his business partner Joseph Lashinger to be released from his partnership with Mason-Dixon. Mr. LeVan’s appeal said he feels the Supreme Court lawsuit is damaging to his reputation and he also wants out of the Mason-Dixon non-compete clause in order to pursue other gaming opportunities in Adams County. So he is quite clear that he will continue to work for a Gettysburg area casino, despite failures and intense opposition. The type of casino proposed must be Cat 2, which contains up to 5000 slot machines plus table games.

 Key items of concern in the bill itself are:

• The PGCB will auction the license "for the highest responsible PROPOSAL that will provide the greatest amount of projected total revenue to the Commonwealth, and otherwise serves the interests of the citizens of Pennsylvania."
• The minimum bid for a Cat 2 license is $66.5M, and $12.5M for a Cat 3 license. If the license to be auctioned is one that has been revoked, it will be re-issued to another approved applicant through this auctioning process, with few restrictions limiting the location.
• Applicants shall submit a binding, non-contingent proposal for a license, and that proposal shall meet all requirements as specified in the Bill. Applicant will bear all expenses related to the proposal.
• Within 5 days of receipt of all bid proposals, the Board shall hold a Public Forum at which time they will disclose content of all proposals. This includes Owners’ names, Venture Partners, and locations of proposed development sites. Within 30 business days following opening of all binding proposals, the advisory firm shall deliver a summary analysis of each of the proposals to the Board, after refining and clarifying by the prospective owners. Thirty days is incredibly short for a complete analysis.          
• The PGCB will evaluate the firm’s analysis of the proposals and select up to three finalists to participate in the auction. Ambiguity of language permeates the law, and the bid evaluation is perilously ambiguous: i.e., highest bid proposal, a venue creating most revenue, and in concert with PA citizen “interests”. How these factors are weighted in this are not defined, leaving the PGCB a wide berth for interpreting the law in ways that could well bring about untoward, unintended consequences.
• The PGCB will hold public hearings for each of the finalists and the auction will take place after that. Whether this would include the two to three days of public hearings that the PGCB held in 2006 and 2010 is undefined.
• After the public hearing and auction, and after evaluating the bids based on a whole array of compliance and financial requirements (and public opinion, we hope) the Board will select the winning prospective licensee. HB 65 restricts a new Cat 2 licensee from being within 30 miles of a Cat 1 licensee, unless such licensee is in Philadelphia, in which case it may not be within 10 miles of a Cat 2 licensee.  Pittsburgh may not obtain a second Cat 2 license, and Philadelphia may have no more than two Cat 2 Licensees.  (Philadelphia area politicians want the casino there, and there would be strong bidding from Philly, as well as from the rest of the state.)
• Though the purpose of the original law was to save horse-racing, HB65 says the PGCB may at its discretion increase the total number of Cat 2 licensed facilities permitted to be licensed by the board by an amount not to exceed the total number of Cat. 1 licenses not applied for within five years.  Transforming racino licenses to stand-alone licenses could damage the horse industry.

 

TAKE ACTION:

If you live in PA please inform your Pa Senator that

• You want a buffer around the Gettysburg National Military Park included in the bill.
• Tell them that if a license is unused it can be eliminated instead of re-bid, since casino economists believe PA, already second only to Nevada in slots, has already reached its saturation point in casino revenue. Twelve existing  PA casinos is enough.
•  Tell them to follow up on their promises to the horse industry and not allow conversion of race track licenses to stand-alone casino licenses.

[Susan Star Paddock]

Find your senator's e-mail here:http://www.legis.state.pa.us/cfdocs/legis/home/member_information/c...