Penn Casino Could Possiby Obtain Slot Machine License by September
June 17, 2006 --- Silver linings up ahead for Mohegan Sun at Pocono Downs. The casino could have a license to operate slot machines by September if the Pennsylvania Gaming Control Board makes good its commitment released in a statement Thursday. Pennsylvania Gaming Control Board chairman Tad Decker said Thursday that the board is set to have hearings on six applications for conditional Category 1 (racetrack) gaming licenses in Harrisburg on Aug. 7-9. according to Decker the casino slot machine licensing decisions will be made the following month of September.
Mohegan Sun at Pocono Downs President Robert Soper however says that certain issues need to be settled first before they can breathe easier. By July 5, the casino needs to resolve the issue of how they will purchase equipment. Pennsylvania Gaming Control Board members are weighing competing proposals for supplier territories and temporary supplier regulations run out July 5. "If they expire without resolution it could take much longer once the permanent process kicks in," Soper said Friday. Another issue is the level of local taxation. This must be resolved before the Mohegan Tribal Gaming Authority gives a go signal to completing the Downs renovation, a venture that cost more than $300 million, including the purchase price of $280 million.
June 28 sees the board meeting again, and the body could give the ruling then. "We're going to be optimistic," Soper said.
Mohegan Sun at Pocono Downs casino and at least two other racetracks are persuading the Department of Revenue to limit the rate of state and local taxation at 55 percent of slots revenue instead of 60 percent or more. The higher figure would cost the Downs an additional output of $7.8 million each year, a scenario that Soper said could deem the venture uneconomical. An article in the Mohegan's acquisition agreement states that it could back out any time between July 1 and a licensing date. If the odds tip towards them and give them a favorable outcome, the Mohegan Sun at Pocono Downs casino will be on track to open a temporary casino with 1,000 slot machines before the end of 2006.
"If we're able to resolve the tax issue and it becomes evident we will obtain a license, it is likely that we will proceed with procurement of equipment and systems," Soper said, prior to September. Once equipment procurement is prepared, and having completed installation and testing, the finish work on the casino and hiring employees would take several weeks.
