Issue 229
January 31 - February 06, 2005
Volume 5
page 1

This Issue

Gaming News

Philadelphia Park could be first in region to offer slots

Isle of Man changes gambling rules

Discover a Fountain of Youthful Delights With a Chocolate Cascade at Bellagio

Gambling resort planned by Pawnee Nation

Silver Slipper breaks ground for new casino

Show Time The Eagles perform at the Bally's Atlantic City.

Column Which Game Gives You the Most Bank for Your Buck By Frank Scoblete

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Philadelphia Park could be first in region to offer slots

As Reported by

BENSALEM, Pennsylvania - PhiladelphiaPark, the former home of Smarty Jones, is planning to spend $150 million to set up a temporary slots parlor that could open for business about 10 months after getting a conditional license early this summer.

The Bensalem racetrack could become the first location in this region to offer slots gambling.

Under the gaming bill Gov. Rendell signed at Philadelphia Park on July 5, the racetrack and three others are eligible for 18-month conditional licenses. Three tracks in development could also apply for licenses.

With the conditional licenses, the tracks could operate as "racinos" until permanent licenses are issued to 14 facilities across the state, including two gaming parlors in Philadelphia and a track planned in Chester.

Robert Green, chairman of Greenwood Racing, the company that owns Philadelphia Park, said a temporary parlor could be housed in the current racetrack building on Street Road. But he is also considering a new, temporary facility.

A temporary parlor would mean the park is reverting to its initial plans. In April 2003, the park submitted and received approval from the township to erect a temporary structure. But after the slots momentum slowed in Harrisburg, park officials said they would instead concentrate on a permanent, 250,000-square-foot complex.

"It would be a scaled-back version of our permanent structure," Green said of the new plans. "Our business is to always provide a first-class facility."

The first phase of the track's permanent facility would take until sometime in 2007 to complete and cost about $300 million, Green said. That phase of a multistory complex would include about 500 guest rooms as the first installment of an upscale hotel, retail shops, restaurants, a spa and entertainment venues.

Citing confidentiality agreements, Green declined to say which hotel or restaurant companies he was dealing with. Some restaurants, he said, would be operated in-house.

The issuance of conditional licenses by early summer, however, would take quick action by the Pennsylvania Gaming Control Board, which met for the first time last month and had its second meeting Tuesday.

At that meeting, the board, headed by Philadelphia lawyer Thomas A. "Tad" Decker, voted to hire two lawyers - a staff attorney and a special assistant to the board - and said in the next month or so it would begin considering regulations and a slots licensing application form.

"The board doesn't want to speculate on any time frame at this point," said Nick Hays, a spokesman for Decker. "Right now they are focused on developing the best regulatory framework for Pennsylvania."
State Sen. Robert "Tommy" Tomlinson (R., Bucks), who helped draft the slots legislation, said he believes that Green might not be far off in his timeline, even though the gambling legislation calls for setting up a "whole new bureaucracy."

"He's probably close," Tomlinson said. The state gaming board "is moving in pretty good order... . They are working hard and getting the organization together."

Because Philadelphia Park and other tracks are already licensed by the state racing commission, Green said he believes that tracks will have little trouble qualifying for conditional and, later, permanent licenses.
But he said lining up financing for the project, and deciding how much to invest when, are still large concerns. In addition to any construction costs, tracks must pay $50 million for a license. Green anticipates spending $40 million to $50 million more on slot machines.

"The question is," Green said, "to what extent do you spend money on the full panoply of development? How much do you spend on bricks and mortar in the early stages?"

Philadelphia Park has not announced any partnerships with big-money casino companies that are joining with potential slots license-holders or pushing into the territory on their own.

For example, some of Philadelphia Park's competition could come from Caesars Entertainment Inc., the operator of casinos in Atlantic City and Las Vegas. The company paid $64.7 million this month for property along the Delaware River in Philadelphia. The city is slated for two "stand-alone" slots parlors.

In Chester, Harrah's Entertainment Inc. is joining with Chester Downs & Marina LLC to build a "racino." Construction is expected to begin in April with live racing starting a year later. Officials at Harrah's said there are no plans to open a temporary facility, but they anticipate a permanent slots parlor to be ready a few months after racing begins.

Philadelphia Park, Green said, has received inquiries from the major casino companies that view Pennsylvania slots as a "major growth opportunity," but the track plans to go it alone for now.
Supporters say once the more than 60,000 slot machines are fully operational, they will generate thousands of jobs and $3 billion per year in gross revenue.

Isle of Man changes gambling rules
As reported by As reported by The New York Times

Isle of Man - Reversing a four-year-old policy, the Isle of Man is now allowing Internet casinos based there to accept bets from American residents. The change, while affecting only a handful of Internet casinos, adds a wrinkle to an emerging trade battle between the United States and much of the world over Internet gambling.
Washington says that U.S. laws prohibit Internet gambling, and some U.S. states have been pursuing financial institutions that facilitate online gambling transactions.
The decision by the Isle of Man comes amid a trade dispute over Internet gambling between the United States and the tiny Caribbean country of Antigua and Barbuda. The island nation has complained to the World Trade Organization that Washington is violating its trade obligations by prohibiting its residents from placing wagers over the Internet.
The WTO issued a preliminary ruling in November in favor of Antigua and Barbuda. The United States filed a formal notice of appeal last Friday, asserting that the country's long-standing trade policy and social mores are consistent with its prohibition against online gaming.
Despite the prohibition, Americans wager more online each year than do residents of any other single country. Around the world, online casinos and the jurisdictions that license them are eager for the U.S. business.
The Isle of Man said that as of Jan. 1, it would be allowing casinos based there to take bets from Americans. The island, located between Britain and Ireland, is a so-called Crown Dependency, meaning that it makes its own domestic laws but relies on Britain for defense and foreign policy.
The policy reversal is significant because the Isle of Man, which first started licensing Internet casinos in 2001, initially sought to attract blue-chip gambling operations by defining itself as a jurisdiction offering rigorous regulation.
Initially, that policy seemed to pay off, as some of the world's largest gambling operations, including MGM Mirage, purchased expensive licenses to operate online casinos there. But business was not as brisk as expected and six major casinos, including MGM, have relocated from the Isle of Man or closed their Internet operations altogether.
In December, the island's Council of Ministers voted to reverse the policy discouraging online casinos located there from accepting bets from the United States. Tim Craine, the head of e-business for the Isle of Man, said that the island felt the policy change would help attract new casinos, and the licensing and tax revenue they provide.
"There's a lot of business looking to relocate to a reputable, regulated jurisdiction," he said, noting that in particular, numerous poker rooms are looking for a new jurisdiction. "We're hoping to capitalize on that business," he said.
Craine said that the policy change affected only wagers placed on casino games and in poker games. The island still discourages casinos located there from accepting sports bets placed from the United States. He said the island made that distinction because it believes that U.S. law prohibits sports betting online, but not casino wagering.
But U.S. prosecutors have said they believe casino games also are prohibited under federal law; in either case, numerous state laws expressly prohibit any gambling operations in the state that the state's Legislature has not expressly authorized.
The United States must file its first brief in the appeal on Friday, and the WTO has 90 days from the appeal notice last Friday to issue a decision in the case.
Last year, some $7.6 billion was lost in wagers over the Internet, according to industry analysts. The analysts said about half that amount was lost by residents of the United States, a disproportionate sum attributable in part to the relatively high percentage of Americans who have Internet access.
Numerous countries, including Britain, license and regulate online casinos. The level of regulation differs widely from country to country, with some countries enforcing more rigorous regulations as a way of helping the casinos that locate there to establish an identity as a reputable casino.
The policies of those countries also differ as to whether they accept bets from Americans.
What they have in common, though, is a desire to attract more Internet casinos, industry analysts and executives said.

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