Trying to catch up a bit on the casino issue. planphilly.com has been doing by far the best coverage of the issue since Hallwatch hasn’t been covering it. Here are some quotes from a July 21st article written by Boston journalist Scott Van Voorhis in Gambling Compliance magazine, which is only available to subscribers, unfortunately:

“Pennsylvania’s fast-growing gambling sector has run into a patch of heavy political turbulence, with an array of proposed slot and casino venues now in jeopardy amid rising criticism by elected officials and an tougher approach by regulators.” That’s the understatement of the decade. The papers are loaded every day with proof of the inadequacy of the Pennsylvania Gaming Control Board (PGCB) and it’s sophomoric processes- “A pair of proposed Philadelphia casinos is facing increasing political pressure to jettison their urban sites and look for new development tracts in the city’s outskirts. Meanwhile, plans for a Pittsburgh casino are endangered amid controversy over the transfer of the license to a new developer, while state gambling regulators have declined for now to give a temporary operating permit to a proposed racino in the Western part of the state.”

Later in the article: “Overall, observers see significant structural problems in the way Pennsylvania has immersed itself into the world of slot machine gambling, with political considerations appearing to have trumped sound business strategy and effective regulation. ‘I think it’s an example of how not to do it,’ said Clyde Barrow, a gaming industry expert and professor at the University of Massachusetts Dartmouth.’” I know from aggregating casino headlines every week that Clyde Barrow is often contacted for the pro-casino view on any given story (by the way, anyone can subscribe to my clips for free. If you’d like your name to be added, email me: mgmt(AT)greencityjournal.com). Barrows can put a shine on anything to do with gambling. So if he thinks things are bad, you can be quite sure they are.

The article continues: “In Philadelphia, plans for a pair of riverfront casinos have run into serious problems amid mounting opposition from neighborhood activists and city leaders. Critics say the big gambling venues don’t belong on the waterfront, which city officials have targeted for a sweeping overhaul that includes new streets, hiking trails and parks.

And this is an outsider’s take on our chances here: “Despite winning some legal battles, Connecticut’s Foxwoods and Chicago billionaire Neil Bluhm, whose proposed SugarHouse casino would take shape in a former sugar refinery, appear to be losing the political war. Ramping up the pressure, a pair of state senators has threatened to pull key tax breaks from the casino projects unless they agree to move to new locations away from the city’s waterfront. State Senator Vince Fumo went as far as to threaten to unleash the legislative equivalent of ‘atomic weapons’ should the casino developers balk, which, so far, they have. In a bid to salvage the situation, Gov. Ed Rendell has stepped in a bid to negotiate a deal, and the Philadelphia Inquirer, in an editorial, is urging the casinos to relocate to the area around the city’s airport.” I’ll skip the blather by Rendell’s spokesman.

“An equally heated battle has also broken out to the west in Pittsburgh, where casino developer Don Barden, struggling financially, has been forced to sell the majority of his project off to Bluhm, the Chicago developer behind the embattled SugarHouse casino plan in Philadelphia…”

Here’s an interesting point: “Pennsylvania’s gambling regulations limit casino and slot developers to control of one project and no more than one third of a second. Bluhm, the would-be Philadelphia casino owner, would control 75 percent of the Pittsburgh casino under the proposed deal.” It will be interesting to see how Bluhm deals with this potentially sticky situation. Will he give up some of his controlling interest in SH? The plot clots.

The article goes on to outline controversy over an attempt by a Western PA racino to get a temporary license to secure financing, but doesn’t even mention the DeNaples debacle, which is ongoing (will have to cover here another time). It concludes, “The turmoil has not gone unnoticed and stands in contrast to experienced casino jurisdictions like New Jersey, whose regulatory structure has been copied by several US states. However, Pennsylvania chose a different path, ignoring many of the hard-won lessons of its casino-rich neighbor, notes UMass Dartmouth’s Barrow.

“‘They reinvented the wheel and not very well,’ Barrow said. ‘They really didn’t learn from other jurisdictions.’”