Budget stalemate changes odds for casino table games

Until last week, the odds of blackjack, poker, craps, and roulette being permitted in Pennsylvania slot parlors were long at best, and little more than a pipe dream for the state's still-fledgling gaming industry.

But the longest-running state budget stalemate in the nation has changed all that.

The appeal of $200 million that table games could raise this year from fees and taxes - revenue that doesn't require new levies on the general public - appeared to be too great to resist even in a legislature historically resistant to expanding gambling.

Many observers believed it was only a matter of when, not if, the state would approve table games after giving the industry a foothold with slots parlors, said Chris Borick, a politics professor and pollster at Muhlenberg College. But few expected it would be this soon.

"As we find ourselves in this mess, it's obvious that you turn to the place that can produce a lot of revenue without a high degree of political pain," Borick said. "And all the other options had the potential of much more pain."

The potential for table games is good news for Philadelphia's two delayed slots parlors, one of which - Foxwoods Casino - still has no financing to begin construction.

But it would be a setback for Atlantic City casinos, which have reported a 15 percent decline in revenue this year.

"I'll probably come down here a lot less often because then I could stay in my own backyard," said Muriel Jones, 56, a self-described "veteran blackjack player" from Mount Airy spending yesterday at Harrah's Atlantic City.

Gov. Rendell had vowed to block table games until all 14 of the state's slots parlors were operating. Five, including two in Philadelphia, are not yet open.

But desperate for an end to the budget impasse, Rendell and legislative leaders from both parties appear poised to sign a deal built in part on legalizing table games. It plans for $200 million in revenue and license fees from the games this fiscal year alone - plus what is known in state budget lingo as all-important "recurring revenue": money that can be counted on in future years.

On Wednesday, Rep. Tommy Tomlinson (R., Bucks), whose district includes PhiladelphiaPark Casino & Racetrack in Bensalem, introduced a proposal to add table games.

That bill is likely to be combined with a similar one proposed in July by Rep. Bill DeWeese (D., Greene). The bills differ on how much casino operators would be taxed for table games: 12 percent in Tomlinson's bill and 21 percent in DeWeese's.

Senate Majority Leader Dominic Pileggi (R., Delaware) said two things needed to happen for Senate support: The existing gaming law had to be changed to include such restrictions as banning applicants with felony convictions, and the process for advancing table-games legislation had to be open and accessible.

Supporters say table games would allow Pennsylvania casinos to better compete with ones in neighboring states like West Virginia, New York, and New Jersey, which already offer both slots and table games.

"Table games have the potential to boost gambling revenue by about 25 percent in Pennsylvania," said analyst Joseph Weinert of Spectrum Gaming Group L.L.C. in Linwood, N.J.

But critics like Rep. Paul Clymer (R., Bucks), a member of the Gaming Oversight Committee, called the rush toward table games "irresponsible."

Clymer said lobbyists for casino operators were capitalizing on the budget crisis to force through table games. "They've found a red herring to attach it to," he said.

Diane Berlin, coordinator for the advocacy group CasinoFreePa, said the rush to consider table games was cutting the public out of a major policy decision.

"It's déjà vu 2004 all over again," she said, referring to the year when the state legalized slot machines. "There is a conference committee, a late budget - and gambling once again is the solution."

Some casino opponents are already steeled for a fight.

"To see our legislators trying to raise money by signing a pact with Satan is unconscionable," said the Rev. Terrence Griffith, a vice president of the 400-member Black Clergy of Philadelphia, which has taken a stand against all forms of gambling.

In Philadelphia, the potential of expanded gaming could make the stalled Foxwoods project more attractive to potential lenders. The location of the proposed slots parlor has shifted from South Philadelphia to Center City and back to South Philadelphia.

Craig Parmelee, a gaming analyst for Standard & Poor's, said, "It's not a slam dunk. It's incrementally beneficial."

The 1,700-machine slots parlor at the proposed SugarHouse Casino in Northern Liberties and Fishtown could be reconfigured to accommodate table games, spokeswoman Leigh Whitaker said.

"We would be successful with or without table games," she said. "Certainly, it will allow us to market to a different customer."

Typically, a casino will have 50 to 100 table games. Tables would mean about a 10 percent to 15 percent increase in customers, because table-game players spend more than slot players, according to industry experts.

For operators, table games are less profitable than slot machines because they require, on average, six to eight card dealers, croupiers, and other employees to run. In contrast, slots require little overhead. But to the state, that's a selling point for table games: They generate jobs.

That helps explain why the tax rates would be different. In Pennsylvania, the tax on slots revenue is 55 percent. On table games, lawmakers are haggling over whether it should be 12 percent or 21 percent.

Table operations, too, are important for bringing more traffic and customers to casinos. The table-game crowd tends to be younger and more predominantly male than the slot-machine market.

Bob Green, chairman of Greenwood Racing Inc., which owns PhiladelphiaPark Casino & Racetrack, said table games could lead to ancillary amenities including hotel rooms, conference facilities, enhanced entertainment, and restaurants.

Green had been lobbying lawmakers on adding table games from the time PhillyPark opened with slots in 2006. "We will be able to offer what New Jersey offers in gaming," he said.

Green said PhillyPark would move into a bigger $250 million facility in December. He said the casino had up to 30,000 square feet of space to house table games.

In Atlantic City, slots account for 70 percent of gambling revenue and table games 30 percent. In Las Vegas, the split is closer to 67 percent for slots and 33 percent for table games.

In Atlantic City yesterday, gamblers from Pennsylvania reacted with mixed feelings about whether they'd bet on going to gaming parlors closer to their homes to play table games.

Ralph Gianascola, 72, of South Philadelphia, said he'd still go to Atlantic City because it's where he's been spending his free time his entire life.

"I came here before they had casinos, and now I come down here for the casinos," Gianascola said during an afternoon stroll on the Boardwalk between poker games at Trump Taj Mahal. "No matter where they put a casino in Philly, or even the rest of Pennsylvania, they'll never have this Boardwalk, this view."