Inside Asian Gaming

INSIDE ASIAN GAMING | May 2008 38 Market Outlook operations, the Pennsylvania gaming market is still in somewhat unsettled shape.To start, only one of the five lucrative stand-alone slot casinos, Mount Airy Casino Resort, has opened. Unfortunately for the state and its nascent gaming industry, the owner and gaming license holder of this property—Scranton area businessman and banker Louis DeNaples—was recently charged with four counts of perjury by a Dauphin County grand jury following a seven-month investigation. Dauphin County District Attorney Ed Marsico alleged DeNaples lied to the state Gaming Control Board regarding past ties with organized crime figures. DeNaples appears to have slipped through the license process due to a quirk in Pennsylvania gaming law that denies law enforcement powers to the gaming board’s Bureau of Investigations and Enforcement (BIE), the agency that conducts background checks on license applicants. BIE reportedly thought DeNaples was lying during its investigation, but without enforcement powers, could not ask the FBI or state police to share information with them. “How do you investigate prospective gaming applicants and not have law enforcement authority? If you go across the river in New Jersey, that was one of the first things they did,” Fed Martens, the former head of the Pennsylvania Crime Commission, told The Times Leader newspaper. “It makes no sense in the world the way it was set up.It is a scandal waiting to happen.” The state gambling control board immediately suspended DeNaples’ gaming license. The board is considering appointing a trustee to oversee Mount Airy until the case is settled. This is not the only black-eye suffered by the slot parlor portion of the Pennsylvania gaming industry. Two massive 3,000 slot machine casinos have had a hard time getting established in Philadelphia. SugarHouse casino, a proposed US$450 million mixed-use project located along the Delaware River waterfront area, recently had its license revoked by Philadelphia Mayor Michael Nutter, primarily due to quality of life complaints from local residences and environmental impact issues. SugarHouse had 30 days to appeal the action and ask the city to reissue the license, which it will only do after an extensive review process. State and city lawmakers have also petitioned the State Supreme Court to revoke the license altogether. What weight Mayor Nutter’s actions have remains to be seen.The move came on the heels of a December 2007 decision by the State Supreme Court to approve zoning and other necessary permits for SugarHouse, knocking down city council objections to the project, saying they were little more than delaying tactics because the state had already approved the development. Meanwhile, the second area casino— the US$560 million Foxwoods Casino Philadelphia,also locatedalong theDelaware River but in South Philadelphia—has also found the local approval process arduous. Local legislation in support of the project was finally filed in January, after the projects owners—the Mashantucket Pequot Tribe of Connecticut—agreed to consider tougher ordinances regarding public safety, traffic congestion and sewer lines. City Councilman Frank DiCicco, a longtime opponent of the project, actually introduced the enabling legislation, saying the previous decision by the State Supreme Court regarding Sugarhouse forced this move. “Although I disagree, I have heard and have heeded the Supreme Court’s opinion of thecouncil’sfailuretoactongamingmatters,” DiCicco said in a prepared statement. “The introduction of this legislation is not a shift in my position. I still have serious and reasonable concerns about this project that must be addressed.This bill helps guarantee that they are.” PITG Gaming, the Don Barden subsidiary that is attempting to establish a US$455 million, 400,000-square-foot casino along the Ohio River in Pittsburgh, has also hit some snags. The good news is that the project has broken ground but only after having struck various traffic easement deals with the city and its Pirates and Steelers sports franchises. So far, the only city-based slot parlor that seems to have smooth sailing is the Sands Bethworks currently under construction in Bethlehem.The project, owned by Las Vegas Sands, broke ground last May, and the first phase of the 126 acre development will feature a 300-room hotel, 200,000 square feet of retail, 3,000 slot machines and a variety of dining and entertainment options. Sands Bethworks will also be home to the National Museum of Industrial History, an arts and cultural center, and the broadcast home of the local PBS affiliate. “Not only are we are on track to develop a property that the region will be proud of, but we are confident that everyone will enjoy the myriad options available. With so many entertainment options featured under one roof, guests will be amazed as they are presented with top-notch shopping, dining and entertainment,” said Brad Stone, executive vice president of Las Vegas Sands Corp., at the time of the groundbreaking. “Also, as promised, it will contain varying components that will allow us to keep the integrity of the Bethlehem Steel buildings, preserving the industrial giant’s place in history.” Mass. movement Compared to Pennsylvania, the casino plans for Massachusetts seem somewhat modest. The legislation, as outlined by Gov. Patrick in the September, calls for three state-licensed casinos, one in the Boston area, one in the western part of the state and one in the southeastern part of the state.The governor’s office estimated that themeasure would create 20,000 permanent jobs, along with thousands of construction jobs. Each of these projects will cost an estimated US$1 billion to develop, which, surprisingly,has not dimmed casino operator ardor for Massachusetts casinos. Las Vegas Sands,Wynn Resorts, Harrah’s Entertainment and Trump Entertainment Resorts are just a few of the well-known casino development companies rumored to be gearing up for a Massachusetts license bid. Massachusetts expects to realize hundreds of millions of dollars annually from the three licenses, with US$400 million MGM Grand at Foxwoods

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