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September 26, 2013

Erie track objects to license for local proposal

NEW CASTLE — An Erie racetrack’s attorney contends the state should conduct a public hearing for the proposed local racetrack and casino.

Presque Isle Downs Inc. filed a petition Monday with the Pennsylvania Harness Racing Commission, contesting the commission’s awarding of a conditional license to Endeka Entertainment for Lawrence Downs Casino and Racetrack planned for Mahoning Township.

The petition wants Lawrence Downs’ conditional harness license revoked and seeks the commission’s refusal to grant a final license.

Endeka, a Philadelphia investment group, has partnered with Penn National racetrack gaming company to bankroll the multimillion-dollar facility.

Samantha Krepps, Pennsylvania Department of Agriculture press secretary, said in an email Wednesday the harness racing commission is reviewing Presque Isle’s petition.

Frederick Santarelli, from the Philadelphia law firm of Elliott Greenleaf and Sidowski, filed the document for Presque Isle Downs. The company, owned by MTR Gaming Group of West Virginia, operates a thoroughbred track and casino in Erie.

Santarelli said the petition was filed now because the Lawrence County site was approved when there was no real competition from Ohio. He claims “substantially changed circumstances now would virtually cannibalize” other casinos.

He further contends the competition would reduce tax revenues to Pennsylvania by $100 million, and hurt the competition and public interest.

“There’s only so much to go around in that market.”

The petition also questions how Lawrence County government can back the project with a $50 million bond issue, then repay it with gambling revenues.

“We think it’s highly questionable.”

The filing notes there is no precedent to allow the county to act as a financial backer, and that it has not attempted to satisfy the obligations imposed by the Legislature to act as one.

“Endeka’s need to rely upon $50 million is not only unprecedented and improper, it is also unqualified evidence that Endeka’s intent to build a racino in Lawrence County is not financially suitable or even feasible,” the filing states.

The casino license eyed for Lawrence County is the only one left in the state and has to be tied to the racing license, which is only conditional, Santarelli noted.

The conditions require Endeka to have a horseman’s association agreement, but the Pennsylvania Harness Horsemen’s Association withdrew support.

Santarelli said the harness commission has not had a public hearing on Endeka’s plans. Interested parties should be able to contest whether the county is an appropriate site for the last available license, he said.

“That ship has sailed,” Lawrence County Commissioner Dan Vogler said Wednesday in response to the petition.

“The commission already has awarded the license,” Vogler said, and Endeka and Penn National have moved on to the gaming control board.

“It would seem to me that would be the appropriate place to file objections.”

Vogler said the time for Presque Isle to intervene would have been a year ago.

“It begs the question, what are they afraid of, and why are they suddenly concerned about this?”

 State Rep. Chris Sainato sees the filing as a reaction to a potential threat to Presque Isle’s business.

“They’re trying to delay is what they’re doing,” he said. “The harness commission has made its ruling. I hardly think they’re going to go back and start this whole process again.

“Other casinos try to stop other casinos,” he said, and no matter where a casino locates in Pennsylvania, there will be competition.

“You’ve got 10 of them in Atlantic City,” he pointed out, and McDonald’s, Wendy’s and Burger King all locate near one another other.

MTR also owns Mountaineer Casino Racetrack and Resort in New Cumberland, W.Va., which draws customers from the New Castle and Youngstown areas.

“I think this could actually anger a lot of their customers they have now,” Sainato said.

“We’re going to keep moving forward and we have a strong commitment from everyone involved.”


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