To win, casino backers need to run the table
‘Odds are almost nil,’ says Sen. Armstrong; competition fierce for licence, and developer needs five of a kind.
By Helen Colwell Adams
Updated Oct 02, 2008 11:13
Don’t bet on it.


Armstrong, R-13th District, warned last week that it’s unlikely the plan by attorneys Jerome Finefrock and James Nettleton Jr. would be approved by the state Gaming Control Board, which will be issuing licenses for 14 slots parlors around the state.


For one thing, Armstrong said, there are only two licenses not earmarked for specific locations, and one of those is almost certain to go to the Lehigh Valley.


For another, there’s a poison pill of sorts tucked into Act 71, the 2004 law that authorized up to 61,000 slot machines in Pennsylvania.


Applicants for licenses must win a unanimous vote of the four legislative appointees on the Gaming Control Board, plus one of Gov. Ed Rendell’s appointees.


And that, Armstrong said, is nearly impossible.


“This is something very few people are aware of,” he said.


Finefrock said he is aware of that part of the law and said he still believes that he and his project partners have a “50-50 chance” of winning approval.


He said opponents need to keep in mind that the gaming board’s appointees are charged with being impartial “and not subject to untoward political pressure,’’ which could be deemed illegal.


“If the politicians kill it they will have to answer to the people,’’ Finefrock said.


“All I am asking for is a level playing field. If they want to unlevel the playing field, we will see what we can do to counter that.’’


“We would ask for an investigation, we are lawyers after all.”


The Manheim Township attorneys, along with developer Richard Welkowitz, want to open a $150 million casino in the Bulova building at the corner of Queen and Orange streets. Blackford Development Ltd., of which Welkowitz is managing partner, would buy the building — the former Hess department store on Lancaster Square — and convert it to a slots venue.


Armstrong intends to block that.


“The odds of them getting this,” he said, “are almost nil.”


A slots roadblock?




Legislative opposition to a slots application is critical because of the “qualified majority” provision of Act 71, and Lancaster County Republicans have been lining up against the casino since Wednesday, when the plans were unveiled.


The clause says that licenses must be awarded by unanimous vote of the legislative appointees to the Gaming Control Board, plus at least one of the governor’s three appointees.


Legislative appointments come from the speaker of the House, in this case Republican John Perzel; the House minority leader, Democrat Bill DeWeese; the president pro tempore of the Senate, Republican Robert Jubelirer; and the Senate minority leader, Democrat Robert Mellow.


Act 71 was passed during a marathon session on the July 4 weekend in 2004.


Armstrong, one of the leaders of the anti-slots forces, said the qualified majority was a concession to slots critics, so casinos couldn’t be built in a community where the legislative delegation was strongly opposed.


So far, the only county lawmaker supportive of the proposal has been Rep. Mike Sturla, D-96th District, who represents the city.


Since Finefrock and Nettleton announced their plan, Armstrong has been in contact with people he knows on the Gaming Control Board, as well as Democratic Sen. Vince Fumo, considered the principal architect of Act 71, and his staff.


Armstrong and Fumo have a long-standing friendship across party lines.


Armstrong also has had discussions with Jubelirer, Mellow and Senate Majority Leader Chip Brightbill, who represents northern sections of Lancaster County.


On the House side, Reps. Katie True and Scott Boyd are among lawmakers asking Perzel to lobby his appointee, Joseph W. Marshall III, to vote no on the Lancaster application. Sen. Noah Wenger, R-36th District, also introduced legislation Thursday to bar slots from Lancaster County.


The other state obstacle is that Finefrock and Nettleton are vying for one of only two available licenses statewide, and Armstrong said it’s actually more like one license.


Act 71 authorized 14 licenses, most at horse racing tracks. Others were earmarked for Philadelphia and Pittsburgh.


Only two Class 2 licenses are available, Armstrong said, and it’s “99 percent certain” that one of those is heading for the Lehigh Valley.


Lack of competition from other slots sites, backing from major gambling companies and strong local support are the factors in favor of the Lehigh Valley application, the senator said.


Other contenders for the remaining Class 2 license — for up to 5,000 slot machines — are the Poconos, Pottstown and Gettysburg, Armstrong said, and all the other applicants are farther along in the process.


The Lancaster project at this point does not have a major gaming firm associated with it. Finefrock has said the partners are negotiating with two casino management companies to run the operation.


The attorneys said the casino would generate some $10 million a year in tax revenue and would create 1,200 to 1,500 new jobs.


Bulova’s president, Stephen Gurba, has wanted to move his company to the Keystone Opportunity Zone on South Prince Street.


A casino would need a special exception from the city zoning board, which is scheduled to begin considering the matter on Jan. 9.


While Act 71 allowed the Gaming Control Board to override local land-use laws, the state Supreme Court earlier this year struck down that section of the law as unconstitutional.


Long road ahead




The Lancaster developers have not yet submitted an application, said Nick Hays, a spokesman for the Gaming Control Board.


And at this point, the board isn’t ready to begin issuing licenses anyway.


Hays said the board has set a Dec. 28 deadline for applications.


The first group of applications to be reviewed will be those submitted by race tracks, which are considered Category 1 under Act 71 and can be handled more quickly because track owners already have gone through a state licensing process.


Mid-2006 is the target date for issuing those Category 1 licenses, Hays said.


There is no timetable for processing Category 2 and 3 licenses, for standalone slots parlors, which will take longer because of extensive background checks mandated in the law.


Category 2 licenses are for up to 5,000 slots, which is what Finefrock and Nettleton envision. Category 3 licenses are for up to 500 machines.


Licenses cost $50 million each.


While he would not address specific applications, Hays verified Armstrong’s characterization of the “qualified majority” provision of Act 71.


Does that make it harder for applicants to succeed?


“You do the math,” Hays said.


Armstrong said he had heard rumors probably six months ago that someone was looking at slots in Lancaster, but he didn’t know specifics or names until very recently.


He questioned the developers’ arguments that the casino would generate new economic development, given the experience in Atlantic City since the advent of casinos there.


The senator denied that the casino plan is connected to the Penn Square convention center/hotel project.


Armstrong has been one of the key proponents of the convention center, but he said he’ll be leading the campaign against a casino.


“I don’t see how they can get five votes,” he said.


“Bet the house on it.”


Patricia Poist contributed to this story.

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