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Pa. takes slot applications

1 of 14 parlor licenses goes to Pittsburgh

HARRISBURG — Pennsylvania's gambling regulators are now accepting applications to run slot-machine parlors — and if public pronouncements are any guide, many will be postmarked from the grand old mountain resorts and abandoned industrial lands of the state's eastern edge.

Those regions are where slot-machine fever is running high, with five suitors already expected to apply for a license to run a gambling hall in the Poconos and the Lehigh Valley.

In Pittsburgh, several business groups are expected to vie for the city's single license. In Philadelphia, only two parties have revealed their plans to compete for the city's two licenses — leaving some observers scratching their heads.

"What I'd like to think is that there are lots of people who feel the need to go public" with their plans to apply for a license in the Poconos or the Lehigh Valley, said Paul Levy, who is a member of the city's gambling task force. "And then there are a lot of people who have a different strategy" for Philadelphia.

Slot machines were legalized more than 16 months ago, in part to provide revenue to cut property taxes in Pennsylvania.

When the Pennsylvania Gaming Control Board is done awarding all its licenses, there will be 14 slots parlors in the state — a dozen that can offer as many as 5,000 slot machines and two that will be limited to 500.

Of the 12 larger licenses, seven will be for horse-racing tracks in mostly suburban locations around the state, two will go to Philadelphia and one to Pittsburgh, leaving the rest of the state to compete for the last two.

The deadline to apply is Dec. 28, although the board is considering postponing that to March 1 for the non-track licenses. In any case, it is likely that other slots hopefuls could emerge — particularly with several major gambling companies quiet thus far, such as MGM Mirage and Boyd Gaming Corp.

The earliest that licenses can be issued will be June, the board's chairman Tad Decker has said, a date that has continually receded because of a months-long dispute among board members over regulations that must be finalized at least three months in advance.

The board will not disclose who has applied until after the deadline. And rumors are rife about who is interested in what site — some even claim that Las Vegas casino magnate Steve Wynn was spotted in Philadelphia and the Lehigh Valley.

"For every supposed application out there, there's probably another four or five entities that have seriously looked at entering the Pennsylvania market," said Joe Weinert, the vice president of Spectrum Gaming Group, an Atlantic City, N.J.-based gambling consulting firm.

A Gettysburg group is, so far, the only known competition outside the Poconos and Lehigh Valley for the two floating licenses for up to 5,000 slot machines. However, a vocal opposition group is fighting the Gettysburg proposal because of its proximity to the Civil War battlefield park, spawning legislation that would outlaw slots parlors within a certain distance of such historic sites.

The allure of the Poconos and Lehigh Valley comes from the availability of land and proximity to urban areas, including New York City. However, the operators will have to build a resort around the casino to help attract gamblers, those in the industry say.

Plans have been presented for Pocono Raceway, Pocono Manor resort and former industrial lands in Allentown and Bethlehem. A businessman who bought Mount Airy Lodge earlier this year is widely expected to apply for a slots license at the shuttered resort.

In Philadelphia, a casino will benefit from the dense population and draw of the nightlife and entertainment already there. But land and construction are more expensive, and major competitors — the casinos of Atlantic City — are only about an hour away.

Earlier this month, Ameristar Casinos dropped plans to apply for a license in Philadelphia, saying it could not make enough money after the state's taxes on slots revenue to justify the investment. That left Trump Entertainment Resorts and a group headed by Planet Hollywood as the only publicly announced contestants in the city.

Gov. Ed Rendell, the former Philadelphia mayor who first proposed linking slot machines to property-tax cuts, remained optimistic that the Philadelphia field will expand by decision time.

"My guess is that when the smoke clears, you will have more than two applications," Rendell said. "Two is actually all you need as long as they're good applications."

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