Suggestions to Improve The Slots Parlors Re-Siting Bill (SB 1487)

Suggestions to Improve The Slots Parlors Re-Siting Bill (SB 1487)

I. Background

State Senator Vincent Fumo, and Representatives Michael O'Brien and William Keller have proposed an amendment to Act 71 that would allow citizens to petition the Pennsylvania Gaming Control Board (the “PGCB”) to request the resiting of the two slots parlors currently proposed for the residential communities along the Delaware River waterfront in Philadelphia. The bill would establish a process aimed at finding new locations for one or both of the facilities. The bill would also eliminate the 10-mile exclusionary zone surrounding the suburban racinos, and thereby open up new areas to which the slots parlors can be re-sited.

Casino-Free Philadelphia is pleased that the bill's authors and co-sponsors are concluding that Act 71 is fatally flawed and that the costs of these proposed slots parlors outweigh the alleged benefits. The two currently proposed locations are non-starters and would be terrible for Philadelphia.

On the day the amendment was announced, Casino-Free Philadelphia stated in a press release that the bill is a “great start in that it finally gives citizens a voice and establishes a process to reopen the issue of siting.” We also stated that, “though we have concerns about Act 71 giving so much deference to the PGCB, we believe today’s bill will produce a much needed dialogue to achieve real results.”

Companion legislation (SB 1487) was introduced in the Senate a few weeks ago and we now take the opportunity to provide our suggestions and comments. We hope our comments will help the legislature anticipate and resolve issues that could be exploited by the casino licensees, or could otherwise undermine the intent of the authors. We agree with the need to enact this legislation as soon as possible and we will work with all partners to achieve that goal.

Casino-Free Philadelphia supports this bill. This public memorandum contains a number of suggested improvements we believe would make the bill much stronger, but if the improvements can't be made for whatever reason, we support the bill as currently drafted.

II. Comments

In general, we believe the bill leaves too much to the discretion of the PGCB. The bill should not be so vague as to allow the PGCB to determine that neither slots parlor should be re-sited. Nor should the bill allow the PGCB to re-site only one of the slots parlors. The goal should be to guarantee the re-siting of both. Standards should also be put in place to make sure that any new locations are far from neighborhoods.

A. The process should not be conditioned on the undefined phrase “not timely”

Section 1304.1.(a) of the bill allows any person to petition the PGCB to make a determination that either or both licensees will "not timely" commence operations. The phrase “not timely” is undefined and is therefore open to interpretation by the PGCB. As explained below, "not timely" might mean 1 year from licensing, 1 to 3 years from licensing or some other time period. This uncertainty could provide the PGCB the ability to re-site neither or just one of the facilities.

The possible deadlines of 1-year and 1- to 3-years are found in Section 1210 of the existing Gaming Act that provides that all licensees “shall be required to operate and make available to play a minimum of 1,500 machines at any one licensed facility within one year of the issuance by the board of a slot machine license unless otherwise extended by the board, upon application and for good cause shown, for an additional period not to exceed 24 months.” In this case, SugarHouse received its gaming license on January 11, 2008, which means that SugarHouse must commence operations by January 10, 2009, or risk having the PCGB revoke its license. For “good cause shown,” the PGCB may grant SugarHouse an extension of time until January 10, 2011. Foxwoods received its gaming license on June 3, 2008, which means that Foxwoods must open by June 4, 2009; or seek an extension for good cause, which could be as long as June 4, 2011. Therefore, under existing law, the slots parlors must open within 1 year from licensing or, with a good cause extension, up to 3 years from licensing.

In the new bill, the undefined phrase “not timely” is left open to interpretation. Does it mean that the PGCB must determine that the doors won't be open by the current 1 year statutory deadline (January 10, 2009 for SugarHouse, and June 4, 2009 for Foxwoods)? Or does is mean that the PGCB can consider a good cause extension, which could be as long as 2011? Or does “not timely” mean some other timeframe?

This is an important issue because most Philadelphians want both casinos re-sited and therefore would want the PGCB to declare that both would "not timely" open at their waterfront locations. If the current version of the bill is enacted and PGCB proceedings occur, Foxwoods and SugarHouse will likely argue that their openings will occur by 2011. Presumably, the PGCB could determine that most of the permits are already in place and that operations at both sites can commence timely; or, the PGCB could determine that one facility can open timely and that the other cannot.

The bill can be strengthened by amending it to include a simple declaration that the facilities cannot open by the current 1-year deadline, or that the two sites are simply inappropriate, and that the resiting process must therefore occur. As presently drafted, the bill gives the industry a possible escape hatch of arguing that the doors will open "timely." (Indeed, in the proceedings regarding the payment of the $50 million license fees, the PGCB concluded that the delays were foreseeable.) As an alternative amendment, the bill can be strengthened by leaving the decision of timeliness to the PGCB but by defining "not timely" as the current 1-year statutory deadline without any good cause extensions; twinned with a definition of "good cause" that prevents a licensee from obtaining an extension for self-inflicted reasons such as not been able to obtain other permits and approvals (e.g., a typical force majeure provision).

B. The provisions governing the resiting proceedings can be strengthened

Sections 1304.1.(b) and (c) of the bill would authorize the PGCB to accept evidence and publicly recommend new sites. We have three suggestions.

1.) In the re-siting proceedings, in addition to the licensees and elected officials, only “neighborhood civic associations” can participate and provide input. We believe this is too restrictive because many legitimate groups and individuals would not be able to participate. For instance, Casino-Free Philadelphia, Neighbors Allied for the Best Riverfront, the International Longshoreman’s Association, and neighborhood town watch groups, might not be able to participate. In addition, individual members of the public at large (for instance, residents, local businesses, landowners, and other entities such as the Philadelphia International Airport) might not be able to participate. Therefore, we recommend that the phrase “any person” be added to the list. We note that pursuant to Section 1304.1.(a) “any person” can file a petition.

2.) The bill contains no standards to guide the PGCB in selecting new sites. Without any standards, the PGCB might select sites already determined to be inappropriate by the public, including but not limited to the sites chosen by Pinnacle, Riverwalk or TrumpStreet, all of which the PGCB determined to be suitable. Under the bill, other, similarly unsuitable sites might be selected. Accordingly, we recommend that the bill be amended to include a buffer zone between slots parlors and homes, schools and churches. We suggest the 1,500 foot buffer supported by an overwhelming majority of Philadelphians. The law should protect all neighborhoods.

3.) Pursuant to Section 1304.1.(d) of the new bill, the licensees would be allowed to comment on the PGCB’s list of recommended alternate sites. We believe the affected community(ies) should also be allowed to comment once they learn that their community has been recommended to host a slots parlor. Moreover, the bill should be amended to make clear that the affected community(ies), its residents and their elected officials have standing to file an appeal obtaining judicial review of the final decision. We recommend that the appeal go first to the Commonwealth Court and then to the Supreme Court.

C. The law should take effect immediately upon enactment

Pursuant to Section 2 of the bill, the new law will take effect 60 days after enactment. The new law should become effective immediately upon enactment. Keeping the 60 days provision only allows the licensees additional time to obtain more permits and approvals at the current sites, thereby strengthening their argument that they can open timely.

III. Conclusion

Casino-Free Philadelphia believes this bill is a great start and we support it. The bill can be improved by making the suggestions contained in this memorandum.

To download this memo click here.