Today, the Pennsylvania House of Representatives passed, on a
153-29 vote, a bill that would significantly change the landscape
for the revoked Philadelphia slot license.
Frank DiGiacomo and I have reported about that license
here and
here.
The bill, HB 65, would first remove the restriction that
the remaining Category 2 slot license be located within the City of
Philadelphia, and would instead allow that license to be awarded
anywhere in the Commonwealth. The bill will also set up an auction
process for the license. Under the auction, the minimum bid will be
$66.5 million. Under the auction process, the PGCB is to retain a
financial advisory firm to assist with the auction process.
Prospective licensees must submit a definitive, noncontingent
proposal containing the amount of the bid, an identification of all
financial sources, location, details of municipal approvals and
requests for approvals, a discussion of other approvals required,
an ownership chart, business plans, five year projected financials,
and a projected opening date. These bids will become public
record.
Once the bids are received, the financial advisor hired by the
PGCB has 30 business days to report on the proposals. Then, the
PGCB is to select three proposals to advance to the next round.
Once the three finalists have been selected, the PGCB is to conduct
public hearings on each proposal, and make a final evaluation of
the proposals. The criteria for award is an award to the bidder who
submits the highest responsible proposal that will provide the
greatest amount of projected total revenue to the Commonwealth, and
otherwise serves the interests of the state. The bidder must
satisfy all other requirements of the Gaming Control Act, including
financial stability and qualification, before being awarded the
license.
Interestingly, this bill would waive the prohibition currently
in place that prohibits the current owner of a casino in
Pennsylvania from having more than a one-third interest in another
casino.
The bill now moves to the Senate for consideration, where its
future is uncertain. Currently, there are several schools of
thought with respect to this available license. One suggests that
the Pennsylvania market is in danger of saturation, and, therefore,
would simply eliminate the available license. Another suggests that
the license should be awarded anywhere in the state. A third
suggests that no change should be made, and that the license should
remain in Philadelphia where it was initially allocated. The
legislative and regional interests represented in the Senate will
tell where this bill is headed. Amending this statute has, in the
past, been a difficult process in Pennsylvania, so it is hard to
predict an outcome. Stay tuned for more information as we get
it.
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