PA casinos are hot but still need work

Slots are hot at casinos and racetracks here, but Pennsylvania's having a tough time finding investors willing to put them in smaller ''resort'' settings.

One potential remedy: Allow table games — ranging from poker and blackjack to roulette and craps — at the smaller sites. Another: Double to 1,000 the number of slot machines allowed at the resorts.

Resort lobbyists will pitch both ideas to the state Legislature when it convenes in January. But some top policy-makers, including Gov. Ed Rendell, already are saying no, at least to table games.

The Pennsylvania Gaming Control Board awarded the bulk of the state's 14 available casino licenses Wednesday. Five went to stand-alone casinos housing up to 5,000 slot machines, including Sands BethWorks Gaming in Bethlehem and Mount Airy Resort in Paradise Township. Six went to so-called racinos, which blend slots with ponies. The state hopes to award the remaining licenses — including two earmarked for resorts — next year.

But the only two applicants for resort licenses withdrew their bids earlier this year. Pennsylvania's resort licenses received far less interest from investors and gambling entities than stand-alone parlors, which triggered fierce competition.

The reason boils down to money.

''They're not as economically feasible,'' said Clyde Barrow, director of the Center for Policy Analysis at the University of Massachusetts, Dartmouth.

Pennsylvania law limits resort casinos to 500 slot machines, a number potential bidders have found too low. (Each machine generates roughly $200 in gross revenue each day.) And the state won't consider an application unless it includes a hotel with 275 or more guest rooms and ''substantial'' year-round recreational amenities. Additionally, resort casinos must be at least 15 miles from any other casino to avoid saturating a gambling market.

That would make it impossible for Allentown, for example, to host a resort casino, because a stand-alone casino was awarded to Bethlehem. Similarly, Pocono Manor Resort in Tobyhanna Township could not apply for a resort license because of its proximity to Mount Airy Resort.

A casino accompanying an existing hotel can open more quickly than one built from scratch with other amenities. But room demands, slots limitations and the state's 55 percent tax on casino revenues so far have left investors unimpressed.

Hence the anticipated lobbying to add table games, a move some gaming experts predict would make the most economic sense for resorts.

''If I was a resort, that's the trade-off I'd be making,'' Barrow said. ''That would help them draw a different clientele and a higher-spending clientele, so they wouldn't be competing directly with the stand-alones.''

He said that also could make it possible for lawmakers to eliminate the 15-mile rule.

Rep. H. William DeWeese, a Greene County Democrat who could become House speaker in January, has already said he intends to introduce legislation legalizing table games at casinos. But there appears to be little appetite in the Senate or among House Republicans for table games now. Republicans control the Senate; Democrats will control the House next year.

''I don't think there's any desire whatsoever to expand gaming for quite some time,'' said Christopher Craig, general counsel for Sen. Vince Fumo, D-Philadelphia.

Finances were one of the reasons Nemacolin Woods, a luxury golf resort in Farmington, Fayette County, withdrew its application for a resort license earlier this year.

To comply with state law requiring resort casino patrons to be overnight guests or use some other resort amenities, Nemacolin proposed an annual $25 fee for visitors to its casino. But the gaming board wanted the fee charged for each visit, leading to a stalemate.

''In the end there still was disagreement over that daily minimum,'' gaming board spokesman Doug Harbach said. The board, he said, interprets the law to mean a resort casino is an additional recreational amenity for the resort's patrons.

But the way Pennsylvania has set up its casino licenses may change what's considered a resort here. Pennsylvania's stand-alone slots parlors — like the ones licensed Wednesday in Bethlehem, the Poconos, Philadelphia and Pittsburgh — may become more of a resort destination than the existing resorts that win casino licenses, Barrow said.
The stand-alone slots parlors will have more machines — and in some cases, more resort amenities, such as golf, shopping and spas — than resorts that already exist in Pennsylvania. As a result, they may draw more patrons