|In Pennsylvania the Senate and House of Representatives have passed the Pennsylvania Gaming Act. The new legislation now allows the use of slot machines by several types of venues within the state. It is thought that the bill will be signed in the next week by the Governor of the state, Edward Rendell and will take effect immediately.|
Regulations surrounding the change in policy and the resulting new industry for the sate will continue to be formed over the next few months. Currently the bill permits up to seven racetracks, up to five non race track licensed facilities and two resort hotels to hold slot machine licenses.
For the racetrack, and licensed non racetrack facilities (named as Category 1 and 2 licensed facilities respectively within the bill), once they have successfully applied for the additional license to host slot machines, they will be allowed to operate between 1500 and 3000 slot machines each. Future expansion may be possible of up to 2000 machines per facility pending approval by the Pennsylvania Gaming Control Board. The resort facilities (termed as Category 3 in the language of the bill), will be permitted to host up to 500 machines each.
Each successful applicant will be required to pay an initial license fee of US$50 million, or US$5 million for a limited resort license, Also, inherent in the bill are payment terms which each facility will be held to. This requires that 34% of its gross revenue from gaming (less any monetary payouts) be paid to the State Gaming Fund, 4% to be paid as a local share assessment, 5% to the Pennsylvania Gaming Economic Development and Tourism Fund, and for the race track facilities only up to 12% to a fund pool to be used as prizes and awards to the racetrack’s horsemen.
MEC, or the Magna Entertainment Group made the announcement about the passed bill, and is the sole owner of the Meadows, a racetrack in south western Pennsylvania who will be applying for the license to host slot machines. Jim McAlpine, the President and Chief Executive officer of MEC commented on the legislation change that: 'The legalization of alternative gaming at racetracks will have a significant positive impact on purses and on the Pennsylvania horse racing industry in general. As a racetrack owner and operator, we applaud the Pennsylvania Legislature for recognizing the importance of this industry and its impact upon the local economy, including the many direct and indirect jobs in Pennsylvania which it supports.'