Mount Air y comes up aces in gambling bill
HARRISBURG — In a lastminute maneuver before the state Senate last month passed a sweeping expansion of casino gambling in Pennsylvania, lawmakers added a 28-word amendment, cloaked in legalese.
“A category 4 slot machine license may not be located in a sixth-class county which is contiguous to a county that hosts a category 2 licensed facility,” said the phrasing, tucked halfway into the 939page bill.
Pennsylvania has 12 casinos. But that single sentence could be worth millions of dollars to one: Mount Airy Casino Resort.
The bill paved the way for so-called mini-casinos to open around the state, requiring only that they be at least 25 miles from one of the larger, established gambling halls. The amendment nearly triples that buffer zone for the Monroe County casino, barring mini-casinos from contiguous Carbon, Pike and Wayne counties.
More important, it guarantees that the Mount Pocono destination remains the closest and most accessible casino for the thousands of New Yorkers who flock each week to the commonwealth to gamble.
Who inserted the amendment — which, with the rest of the bill, was passed by the Legislature and signed into law by Gov. Tom Wolf — and why they did it remains an open mystery in Harrisburg.
Mount Airy Casino Resort was founded by businessman Louis DeNaples, who nearly a decade ago was forced to sell his share in the establishment to a daughter after he was dogged by claims of ties to organized crime.
A public relations fir m re presenting Mount Airy said casino executives had no comment on the legislation.
Steve Crawford, president of the lobbying fir m representing Mount Airy, said many establishments were worried about the bill and had lobbied for a larger buffer zone, not a carve-out. He said Senate leaders came up with the language that seems written exclusively to protect Mount Airy’s business.
“As to who put pencil to paper, I can’t answer that question,” said Crawford, adding: “But I’m glad they did.”
Senate Republican leaders didn’t respond to request for comments. T heir spokes - woman, Jennifer Kocher, said late Friday that she could not deter mine who crafted the amendment.
Sen. Mario Scavello, R-40, whose Monroe County district includes the Mount Airy casino, did not respond to a request for comment. He voted against the bill.
StateS en. John Blake, D -22, Arch bald, whose district includes parts of Monroe County but not the township where the casino is located, said he didn’t write the provision and doesn’t know who did.
“It was not me,” Blake said. He also represents all of Lackawanna County and parts of Luzerne County.
State Rep. Maureen Madden, who also represents the district that includes the casino, voted for the measure when it reached the House.
“To protect all of that Mount Airy has committed to in Monroe County, we need to make sure it thrives,” the Democrats aid in an interview Friday, adding: “I understand that there are always winners and losers in every piece of legislation.”
But the mysterious amendment is star ting to generate criticism.
“Something smells here,” said Rep. Mark Rozzi, D-126, of Berks County, who voted against the legislation. “Why are we giving special treatment to one casino?”
Rozzi said he expects Penn National, which is headquartered in his region and which owns the Hollywood casino, and other casino operators to sue over the new law, which he believes creates an uneven playing field. The irony, he said, is that a lawsuit could ultimately freeze the planned gaming expansion, preventing the state from cashing in on new revenue and padding its troubled finances.
Eric Schippers, a top executive with Penn National, said the fir m was researching its legal options. Hollywood, located in a less densely populated area near Harrisburg, says it is unusually vulnerable because it draws half its gamblers from outside the 25-mile radius defined in the law.
“What’s upsetting to us is that Penn National is being uniquely negatively impacted by this massive expansion of gaming,” he said. “At the same time, they give this gift to Mount Airy. It’s unequal treatment. This is an 11thhour giveaway.”
The gambling expansion bill was among the GOP-controlled Legislature’ s solutions this year for raising new dollars for Pennsylvania without raising taxes. The legislation set into motion one of the biggest expansions of g ambling in the state since the 2004 law that legalized casinos.
Despite its complexity, it was cobbled together and approved by both legislative chambers in a breathtaking 24 hours. It passed the Senate in a 31-19 vote, with no debate. Wolf, a Democrat, signed it four days later.
Among other changes, the bill will allow 10 new minicasinos to open around the state, with each being able to operate from 300 to 750 slot machines and 30 table games.
In what may have been a drafting error by the Legislature, the same language that helps Mount Airy might also extend a lesser amount of protection to one other operation, Rivers Casino in Pittsb u r g h . I t s h o m e c o u n t y, Allegheny, touches a sixthclass county, Ar mstrong, a rural area to the northeast, which would also be barred from hosting a mini-casino. Rivers Casino declined comment. Madden said she had not heard of any talk that the measure would assist anyone but Mount Airy.
Because a number of the state’s existing casinos are clustered around high-population areas — such as Philadelphia and its suburbs — the 25-mile buffer zone was, if not embraced, at least considered enough protection from having a mini-casino open nearby and eat away at their profits.
And some casinos are located close enough to each other to benefit by piggybacking on a rival’ s buffer zone, in effect extending their own protection beyond 25 miles. Some casinos around the Philadelphia area, for instance, have an effective buffer zone of more than 90 miles. One, the Harrah’s casino in Chester, has an effective range of 127 miles.
Crawford, president of the Wojdak Government Relations lobbying firm, said Mount Airy was among a long list of establishments concerned about the new mini-casinos “cannibalizing” business at the state’s existing gambling halls, which pay more than 50 percent in taxes on slot-machine revenue.
“From the very beginning, all of us were concerned about the dramatic expansion of gaming and what it will mean to the brick-and- mor tar casinos,” he said, adding there was nothing “new” or unique about Mount Airy’s position.
Among the dozen casinos, Mount Airy is seventh from the top in terms of revenue, taking in about $190 million last fiscal year. It has a controversial history.
DeNaples, 77, a politically connected Scranton millionaire, relinquished his ownership of the Poconos g ambling hall in 2009, shifting his stake to his daughter, Lisa DeNaples. T he move was part of a deal with prosecutors in Dauphin County, who had charged him with perjury, believing he had lied to Pennsylvania’s Gaming Control Board about his ties to organized crime when applying for a casino license.
Still, the casino came under scrutiny again in 2011, when the state Attorney General’s Office released a stinging grand jury report questioning the process by which casino licenses were awarded in Pennsylvania.