PA Casinos - property tax relief

Pennsylvania's slot machines will bring in more -- not less -- than $1 billion a year for property tax relief, a state Revenue Department official said Thursday.
That contradicts the findings of a secret study commissioned by the state Gaming Control Board, which predicts casinos at six tracks will make $365 million a year less than applicants projected.
But that study looks at "worst-case" scenarios, said Revenue Department spokesman Steve Kniley. The regional market for casino gambling has gotten stronger since the department calculated its first projections in 2004, he said.
"If anything, the '$1 billion for property tax relief' estimate is even more viable today," Kniley wrote in an e-mail.
The state anticipates collecting at least $1.074 billion a year to offset property taxes, from slot machines that would raise $3.16 billion, Kniley said.
The state will get $610 million in one-time license fees from casino operators.
"Our estimate is based on a conservative estimate of the number of machines," Kniley said. "... It uses a gross terminal revenue estimate that was conservative at the time, and is more conservative today."
Kniley did not offer specific numbers regarding growth in the regional market for slots since 2004, but said averages were $265 per machine in August.
The gambling law -- passed on the promise of lowering property taxes -- sets aside 54 percent of the money from slot machines for the state. Thirty-four percent of the total would go toward property tax reduction, 10 percent to the horse-racing industry, 5 percent to a statewide development fund, and the rest would be divided among casino host communities.
It's "not realistic" to add up the results for individual casinos that were estimated by PricewaterhouseCoopers in the gambling board's study, because it factors in competition from every casino applicant -- and they won't all receive licenses, board Chairman Tad Decker said Wednesday.
That study predicts 15,750 slot machines at tracks will bring in an average of $189 a day, versus the $252 daily average projected by applicants.
"It's a bogus effort," Decker said. "Those reports were looking at individual applicants and taking competition for that applicant, potential competition."
To reach $1 billion a year in property tax reduction, the Revenue Department counted on 37,000 slot machines taking in an average of $230 a day, plus another 1,000 slot machines at resorts making an average of $150 daily. State law allows for up to 61,000 slot machines at 14 casinos.
"We don't have any reason to suspect (the Revenue Department's projections) aren't right," Decker said.
The state's assurances regarding property tax relief came as critics of the gambling law said they want to see more changes than those included in a reform bill unanimously approved by the Senate Wednesday.
The Senate version would subject the gambling board to the state's Right to Know Law, require it to submit budgets for legislative review and give the state Attorney General's Office power to investigate gambling-related crimes.
Lawmakers also should require casinos to send monthly statements to gamblers, abide by stiff self-exclusion rules to keep out problem gamblers and close for at least several hours daily, said Bruce Barron, president of No Dice, a Bethel Park-based anti-gambling group.
"For (legislators) to try to ram changes through, this will never be a good law," said Dianne Berlin, the coordinator of CasinoFree PA. "It may be made a little better, but it will never be a good law. There are just too many things wrong with it."
House members reviewed the Senate bill while preparing to make their own changes to the slots law, said Steve Miskin, spokesman for House Republicans. Members could vote on a reform bill as early as next week.

Bally is slot manufacturer of choice

When it comes to supplying the state's racetracks with casino-management systems, Las Vegas-based Bally Technologies Inc. is emerging as the vendor of choice.Today, the company announced an agreement with Mohegan Sun at Pocono Downs in Wilkes-Barre to provide the system that will run the racino's gambling floor, expected to open next month. It will also provide more than 200 slot machines.So far, Bally has been picked to provide casino-management systems by three of the six racetracks that will be among the first places to offer slots gambling in the state. Philadelphia Park in Bensalem and Harrah's Chester Casino & Racetrack have also chosen Bally.The Pennsylvania Gaming Control Board will decide at its meeting Wednesday on awarding conditional licenses permitting the addition of slot machines at six racetracks. Permanent licenses will be voted on for 14 slots parlors by the end of the year.The other racetracks seeking slot machines are the Meadows near Pittsburgh, Presque Isle Downs in Erie, and Penn National in Grantville, near Harrisburg.On Friday, Harrah's spokesman Jason Birney said the Chester racino was also selecting Bally for its slots technology and as a provider of some of its slot machines. The casino at the $400 million property is scheduled to open in January with 2,750 slot machines.On Aug. 16, Bally announced it had signed a contract with Greenwood Racing Inc. to provide the system to manage its casino at Philadelphia Park.In July 2004, Pennsylvania legalized slot-machine gambling for 14 locations across the state. Delays followed, including a court challenge that brought the licensing process to a standstill for half a year, and a nine-month stand-off over slot distributorships.Bally, founded in 1932, designs, manufactures, operates and distributes gaming devices, systems and technology worldwide. The biggest designer and maker of slot machines, International Game Technology, and number-two Aristocrat Leisure Ltd. are its main competitors.Mohegan Sun purchased the Pocono Downs Racetrack from Penn National Gaming Inc. in early 2005. The Mohegan Indian tribe has owned a successful casino resort in Uncasville, Conn., for nearly 10 years."We thought there would be some beneficial synergies by using the same system as our Mohegan property in Connecticut," said Robert Soper, president and general manager of Mohegan Sun at Pocono Downs.Soper said the first phase of the Pocono Downs racino would open next month with 1,081 slot machines in a renovated area. The tribe plans to construct a new building to accommodate up to 2,000 slots.

Building Casinos in PA

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