Gaming contest turning into war
BY MICHAEL RACE
HARRISBURG BUREAU CHIEF
Some in Poconos asking how much growth is too much
HARRISBURG — The heated battle for Pennsylvania’s remaining slots licenses is starting to look like a casino arms race, with applicants promising to build posh “destination resorts” that will top the competition.
Consider the two casinos being pitched for Monroe County.
Pocono Manor Resort and Casino would have slot machines in its 750-room hotel in Tobyhanna Township, but visitors also could golf, shoot skeet, ride horses and ski nearby. Its amenities would include seven restaurants, three nightclubs, convention space, a 12-acre manmade lake and an indoor/outdoor pool.
In nearby Paradise Township, Dunmore developer Louis DeNaples is envisioning the Mount Airy Resort as not just a slots parlor and 400-room hotel, but also a place where you could take a swim, relax in a spa, shop, dine, golf and hold business gatherings.
Draw to gamblers
“In this industry, bigger is better,” said Greg Matzel, who hopes to land a coveted slots license for the Pocono Manor project.
It’s all part of the gambling industry’s never-ending quest to “build a better mousetrap,” according to Alan Woinski, editor of the Gaming Industry Daily Report. It’s a mentality he said has its roots in the booming Las Vegas region.
“Nowadays, there’s no such thing anymore as a ‘hotel casino’ in Vegas,” Mr. Woinski said. “It’s no longer just a place to go and gamble.”
To that end, Las Vegas casinos typically include upscale retailers, restaurants, nightclubs and concert halls, all meant to draw what Mr. Woinski characterizes as the “high-end gambler” who has disposable income for more than games of chance.
It works in Vegas, but Mr. Woinski is among those who openly questions whether it will work here.
“There’s a lot of risk in that,” he said of the grandiose business model.
He believes Pennsylvania’s fledgling casino industry would be better off building from a smaller scale, rather than immediately trying to compete for customers with Atlantic City and Connecticut casinos. But his opinion seems to be at odds with those hoping to run slots parlors here.
In the Lehigh Valley, one slots applicant is planning a 300-room hotel with shops, restaurants and a movie theater, while another is proposing a 250-room hotel with similar offerings.
The most modest proposal is near Gettysburg, where businessman David LeVan has proposed a slots venue that has 225 hotel rooms, a spa, restaurants and limited shopping.
Those five applicants are vying for just two slots licenses between them, and the 2004 law that legalized gambling restricts who can land those licenses. The Gambling Control Board cannot give out licenses to any two entities within 20 miles of each other.
That means Monroe County and the Lehigh Valley could each get no more than one of the licenses, leaving just three scenarios when the board awards licenses Dec. 20:
Licenses would go to one project in the Poconos and one in the Lehigh Valley.
Licenses would go to one project in the Poconos and the Gettysburg project.
Licenses would go to Gettysburg and the Lehigh Valley, shutting out the Poconos.
The competition has become so intense that applicants have been making unflattering references to each other during recent licensing hearings before the Gaming Board.
Pocono Manor officials, for instance, have openly questioned Mount Airy’s revenue projections. Mount Airy officials, in turn, voiced “grave concerns” about the traffic and wastewater plans for Mount Pocono. Developers of a casino plan in Bethlehem suggested a competing project in Allentown could pose a “conflict of interest” because its backers also own the Tropicana casino in Atlantic City.
“It sounds like desperation. It sounds like people are nervous,” said David La Torre, spokesman for the Crossroads Gaming Resort & Spa near Gettysburg, which also has been the target of some unflattering remarks from other slots applicants.
The rhetoric is likely to heat up next week, when both Crossroads and the Allentown area’s Tropicana project have hearings before the board.
Mr. DeNaples will have to wait until next week to see if he has been deemed a suitable candidate for a slots license.
The Gaming Board had hoped to formally close the record on Mount Airy’s public hearing Wednesday. Instead, the board held a closed-door “executive session” to discuss the Mount Airy application with Mr. DeNaples, the third such meeting this week.
Board Chairman Tad Decker said the private meetings were to discuss items “of a confidential nature” pertaining to the Mount Airy application. The slots law allows the board to convene into executive session to consider any “confidential documents relative to personal background information provided to the board.”
Mount Airy spokesman Kevin Feeley cast the closed-door meetings as information-gathering sessions on Mr. DeNaples’ vast financial holdings, which consist of some 90 businesses with a combined value of about $2 billion.
“He has a staggering array of business interest, and it takes time to go through all that,” he said.
Mr. DeNaples’ application for a non-track slots license is unique because it is the only one that would be held by an individual, rather than a team of investors and business interests.
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