Rep. John Payne Wants to Create Another Class II Gaming License for Pennsylvania
State Representative John Payne has another plan to facilitate gambling in Pennsylvania, this time with a Class II gaming license. Late late month, the Pennsylvania State Legislature ended its 2016 session without passing Payne’s online gambling bill. The legislative defeat came despite a line-item in the Pennsylvania state budget for 2016-17 which called for financing from expanded gambling in the state.
The plan this time is to de-couple licensing for a Class I racetrack-casino, so the state could offer a license for a casino facility without racing involved. That plan is contingent on whether Lawrence Downs Casino And Racing Resort ends its pursuit of the Class I license in question.
Endeka Entertainment’s Development Plan
The Lawrence Downs Casino is the racino planned by Endeka Entertainment, whose primary owner is Joseph Procacci. Endeka Entertainment wants to build a 1-mile parimutuel harness racing racetrack and casino on the Lawrence Downs site. The casino gaming space would contain 38 table games, 1,500 slots, and 3 restaurants.
Lawrence Downs would be located north of Pittsburgh.
Joseph Procacci’s $220 million casino proposal was denied by the Pennsylvania Gaming Control Board back in the summer, as the Gaming Control Board cited a number of deficiencies with the development plan. This was not the first time the GCB had found fault with the Procacci group’s proposal. The deveveloper has the right to appeal the decision and is said to be mulling over the appellate process, according to New Castle News.
Procacci’s Appeal Is Key
If Joseph Procacci declines to appeal the decision, then Rep. John Payne plans to propose a state bill which would allow the state to issue a Class II gaming license, instead of the proposed Class I gaming license. Such a decision would allow Pennsylvania to award a gaming license for a casino license only.
Rep. Payne has expressed concern that the requirement to open a racetrack alongside casino gaming has caused a lack of suitable applicants. The racing business is at an all-time low. The consensus is such facilities cannot survive on their own strength, but need to be coupled with casino-style gaming machines to make them profitable. Even then, the number of potential operators are small, because the startup costs for a suitable racetrack are high and the profits are limited.
Sainato Explains the Plan
Rep. Chris Sainato, who serves with John Payne in the Pennsylvania House of Representatives, spoke to the New Castle News recently about the idea. Sainato said of John Payne, “He takes the position that there has been no financing available for the combined harness racing/casino project in the past ten years. He believes if the license is withdrawn it could be reissued separately and proposes legislation to do so. He said there is more interest in obtaining a gaming license for a stand-alone casino and that financing for such a license will be readily available.”
To facilitate a new gaming license — and a $50 million licensing fee for the state — John Payne wants to change the 2004 law. That law allows the state to approve 7 Category I gambling licenses for racinos, which tie a racetrack to a casino. The 2004 law also allows 5 stand-alone Category II permits, along with 2 integrated resort-hotel Category III licenses. Payne’s proposal would create one less Class I license and allow one more Class II license.
Standardbred Breeders Association Criticisms
The plan has critics. Joe Thomson, the Pennsylvania Standardbred Breeders Association’s president, is critical of the plan. Mr. Thomson says the bill would hurt jobs, because it would overlook the harness racing industry, including trainers, drivers, racetrack personnel, and other industry workers.
Thomson also criticizes the effect John Payne’s amendment to the 2004 law would have on the area surrounding Lawrence Downs. It is an agricultural area which needs the economic boost a $220 million investment in construction and permanent jobs would bring.
Chris Sainato Replies to Joe Thomson
Chris Sainato suggested that the second of those complaints could be overcome with ease. Rep. Sainato said he could attach phrasing to a future bill which would allow Lawrence Count the “first shot” at the Class II license. As for Thomson’s first complaint, Sainato says that the nature of the Class I license is the problem: no qualified investors exist for a racetrack-casino. John Payne’s bill therefore recognizes that reality and makes the best of an imperfect situation.
Sainato told the newspaper that a quick resolution is what John Payne seeks, and that depends on the decision of Endeka Entertainment and Joe Procacci. Sainato said, “John Payne wants this to proceed quickly if Endeka does not appeal the [Gaming Control Board’s] rejection. If it does do appeal, that will hold everything in place and the process will continue to play out. You can’t deny a license if the guy is still alive. They can’t give the license to someone else if it is under appeal.“
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