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GRANTVILLE,
Pennsylvania - The owner of Penn
National Race Course in Grantville has pushed back
its projected opening of a slot-machine casino at the
track from the spring of 2007 to the third quarter of
that year.
The
delay is the result of an ongoing political dispute within
the Pennsylvania Gaming Control Board over distribution
of gaming machines in the state. The dispute centers on
whether machine distributorships should be established
on a regional or statewide basis. The PGCB has not resolved
the issue, failing again last week to reach a consensus.
"We'll
just sort of wait it out," Penn National CEO Peter
Carlino said Thursday during a conference call to discuss
the company's third-quarter financial results. "It
will get settled, but in some indeterminate time."
The
company had expected to open the casino by the spring
of 2007. It once had thought an opening in the second
half of 2006 was possible after the gaming legislation
was approved last year.
Penn
National plans to build a casino with 2,000 slot machines
at the Grantville racetrack. It said construction will
take 12 to 14 months, so it needs to begin work next spring
to reach its projected opening in the third quarter of
2007.
The
company has vowed not to start construction until it receives
a license. At this point, the PGCB won't be in a position
to evaluate and grant licenses until late next April,
after it resolves the distributorship issue.
Carlino
said a temporary 25,000-square-foot facility should be
completed by December at the Grantville track to handle
horseracing and simulcasting activities. Penn National
can then demolish the existing grandstand to make way
for the casino.
Penn
National now expects to spend $262 million on the casino,
up from an earlier forecast of $240 million. The estimated
cost includes the $50 million gambling license.
"We're
ready to roll," Carlino said. "We're just going
to have to let this unfold."
Penn
National reported net income of $55.4 million, or 64 cents
a share, for the third quarter. Income included a nearly
$38 million gain from the sale of its Shreveport, La.,
casino.
The
quarterly results also include the financial impact from
destruction of Penn National's two casinos along the Gulf
Coast by Hurricane Katrina. The company posted a pre-tax
expense of $19.1 million for deductibles on insurance,
as well as $4.1 million to continue providing pay and
benefits for nearly 2,000 employees affected by the two
closings.
Bill
Clifford, chief financial officer, said the company's
insurance "will be more than adequate" to pay
for reopening the casinos at Biloxi and Bay St. Louis,
Miss.
Third-quarter
earnings, without the Katrina expense and the Shreveport
sale, amounted to 37 cents a share. Penn National stock
gained 4.4 percent Thursday to close at $27.45 a share.
In
other developments, Carlino said a temporary gaming facility
in Bangor, Maine, will open Nov. 4.
The
facility will have 475 slot machines.
Carlino
said the company hopes to start construction of a permanent
facility in the second quarter next year.
Kevin
DeSanctis, president and chief operating officer, said
Penn National's casino in Baton Rouge, La., has been doing
a robust business in the aftermath of Katrina.
"We
think things are going very well right now," he said,
but he cautioned that "we don't know how long this
will last."
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