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On Dec. 20, the Pennsylvania Gaming Control Board awarded 11 of the 14 permanent slot machine operator licenses in record time and after two nonstop and extraordinarily busy years. To summarize a comment made by one of the applicants’ counsel in the licensing hearing closing arguments to the board on Dec. 19, the Pennsylvania Gaming Control Board licensed the equivalent of all of Atlantic City’s casinos in approximately one and a half years, taking into consideration that there was a six-month hiatus during which the constitutionality of Act 71, the Pennsylvania Racehorse Development and Gaming Act was challenged. The process that the board developed to regulate the competitive process of awarding the operators’ licenses consisted of five phases; the application period, the public input hearings, the licensing/suitability hearings, the decision-making and award process, and the appellate stage. The application period for operators’ licenses closed on Dec. 28, 2005. At that time, 25 applications were received and the processing of these applications and development of additional necessary supporting documentation began. The Licensing Bureau developed the documentary licensing evidence and handed these applications off to the Bureau of Investigation and Enforcement to start the task of conducting all the background investigations. Because Act 71 contained specific time requirements for the granting of the operators’ licenses, specifically that all initial applications for the fourteen licenses must be acted upon by the board at one time; may be granted no sooner than 90 days from the time that licenses for manufacturers and suppliers are granted; and must be granted 12 months from the date that the board has deemed all applications complete, but in no case later than one year from the granting of the conditional licenses for the racetracks; the board had to develop a full and complete evidentiary record upon which it would make its decision quickly and in a thorough manner. As we worked to obtain complete applications, the board also prepared a process for developing and recording public input regarding the applicants’ proposed plans and the location for the prospective licenses. The Gaming Control Board created forums for public input and applicant presentations at nine different locations around the commonwealth and these presentations took place on 18 separate days during the months of April and May of 2006. While 25 applications had been received by the end of December 2005, three were rejected by the board for failure to technically comply with the requirements of the statute and the board’s regulations. In the fall of 2006, the two applicants for the Category III licenses withdrew their applications. Boyd Gaming also withdrew its application for a Category II stand-alone casino. Thus, for the spring public input hearings, there were 19 applicants to be heard. These applicants had to present at the locations central to their proposed sites. In all, testimony was taken from 600 speakers. Ultimately, 1,200 written comments were received and reviewed. The written comment period closed in June of 2006. In addition to individual speakers, the applicants and local government officials and community groups spoke as well. All of this testimony was recorded and incorporated into a formal evidentiary record summarized and presented to the board and available for the board’s review, as well as that of the public. Who were the applicants and where are they located? The six applicants for the Category I, Racetrack Licenses are Mohegan Sun, who owns and operates Pocono Downs in the Pocono region of Pennsylvania; Greenwood Racing, which owns Philadelphia Park located in Bensalem; Chester Downs, owned by Harrah’s and a private investor group; Presque Isle Downs, owned by MTR Gaming and located in Erie; the Meadows, owned by Washington Trotting Association and managed by Cannery Casino Resorts, located outside Pittsburgh; and Penn National Racetrack outside Harrisburg, owned and operated by Penn National Gaming. The seventh Category I racetrack license is yet to be issued by the Pennsylvania Harness Racing Commission. The Category II applicants for the stand-alone casino licenses, two of which have been awarded in Philadelphia, one in Pittsburgh, and two in other locations of the state designated by statute to be tourist-enhanced locations were as follows: in Philadelphia, HSP Gaming, known as Sugarhouse and operated by Midwest Gaming; Riverwalk Casino, operated by Planet Hollywood; Philadelphia Entertainment, Foxwoods, owned and operated by the Mashantucket Pequot Tribal Nation; Keystone Redevelopment, owned and operated by Trump Entertainment; and PNK Pinnacle. In Pittsburgh the applicants were Forrest City in partnership with Harrah’s; IOC Pittsburgh, owned by the Isle of Capri; PITG Gaming, Majestic Star owned by Barden Development. For the remaining two licenses in the “tourist enhanced locations” of Pennsylvania, the applicants were Pocono Manor and Mt. Airy Lodge, both applications proposed for the Pocono Mountain region; Sands Bethworks proposed for Bethlehem; Tropicana, proposed for Allentown; and Crossroads, proposed for Gettysburg. After developing the applications and conducting the hearings, the board had a significant record on which to proceed toward conditional licensing of the Category I racetracks. These conditional licenses would enable the racetrack to move toward opening the doors of the racinos and generate the much-sought-after revenue for the commonwealth. On Sept. 27 and Oct. 25, 2006, the board approved all conditional Category I licenses. On Nov. 14, the board deemed all permanent applications complete and then it reached out to the Category I racetracks to schedule them for proposed openings. The projected opening dates of the Category I provided by the licenses were: Pocono Downs, Nov. 14, 2006; Philadelphia Park, Dec. 20, 2006; Chester Downs, Jan. 22, 2007; Presque Isle Downs, March 1, 2007; The Meadows, May 15, 2007; and Penn National, Jan. 1, 2008. The third phase toward permanent licensing of slot machine operators was the licensing/suitability hearing process. In order for the board to make the final determination as to whom to award the licenses, a process had to be structured to address the competitive nature of the licensing contest for the Category II licenses. The board created regulations that support a licensing/suitability hearing process, identifying all of the criteria of Section 1325 of Act 71. The board regulations found at Section 441.19 of the Pennsylvania Code afforded each applicant an opportunity to present to the board evidence concerning its eligibility, its suitability, and how the proposed facility and operations of the applicant meets all of the criteria identified in Section 1325(c) of the act, which relate to license or permit issuance. The applicants seeking a Category II slot machine license, a stand-alone casino license were vying for five licenses. The regulations also provided an opportunity for those applicants to declare whether or not they would seek to introduce evidence to establish a comparison between their application and the others within the same category of licensure on the standards and criteria set forth in the act. The board established a task force to evaluate each applicant’s financial suitability. The specific issues studied were the applicants’ track record as an operator or business entity, including past performance and financial risk profile, and wherewithal, including funding and ability to grow and maintain adequate revenue levels. The board also retained a traffic engineering expert to evaluate the applicant’s own traffic studies and to give the board insight into all traffic-mitigation issues. A schedule of licensing hearings was published by the board for September, October, November and December 2006, with a permanent license approval target date of Dec. 20, 2006. Each applicant had the burden of establishing and demonstrating by clear and convincing evidence its eligibility and suitability for a license. The applicants’ demonstration of suitability had to include a showing of good character, honesty and integrity as well as financial fitness, and operational viability. With respect to operational viability, the board required each applicant to produce evidence of the quality of the proposed licensed facility, whether or not there would be a temporary facility, as well as the number of slot machines proposed, and the ability of the proposed licensed facility to comply with statutory, regulatory and technical standards applicable to the design of the facility and the conduct of slot machine operations therein. In addition, the applicants were required to provide projected date of the start of operations and any additional uses, such as hotel, convention and restaurant space proposed. The applicants were also asked to provide a timeline on the deliverability of the facility and the specific phased permanent licensed facility stages contemplated by the applicant. The applicants also had to demonstrate the facilities’ ability to generate and sustain an acceptable level of growth and revenue, and had to comply with all of the criteria of Section 1325(c). The board made specific notice requirements that the applicant had to follow if they intended to present evidence comparing it to the other applicants. Each applicant had to identify those witnesses or documents that the applicant would be presenting in support of its comparison. Each applicant was afforded an opportunity to file a brief up to 25 pages in length within 10 days of the completion of the hearing with respect to all applications within its category. Any person wishing to intervene in the licensing hearing process for a slot machine license was required to file a petition no later than 45 days prior to the commencement of the first scheduled licensing hearing in the category of the license for which the applicant in whose hearing the petitioner seeks to intervene has filed an application unless there was good cause and the board would authorize the late filing. The fourth phase was the approval/decision process. On Dec. 20, 2006, the board voted on the applications and approved or denied them as follows: in Philadelphia, HSP Gaming, Sugarhouse, and Philadelphia Entertainment, Foxwoods; in Pittsburgh, PITG Majestic Star, owned by Barden Group; in the Poconos, Mt. Airy Lodge, Mt. Airy No. 1 LLP; and in Bethlehem, Sands Bethworks were approved. All other applications were denied for reasons not having to do with suitability, but rather because the board made a determination as to which applicants best met the statutory criteria and furthered the legislative intent of the act. Under the act, the state Supreme Court has exclusive jurisdiction of all appeals of any final order of the board involving the approval, issuance, denial or conditioning of all licensed entity applications. Section 1204 provides that the standard of review is a determination by the court of whether or not the board acted with an arbitrary and capricious disregard of the evidence. In December 2006, an appeal was filed in the Supreme Court, Citizens Against Gambling Subsidies Inc. vs. Pennsylvania Gaming Control Board and Presque Isle Downs Inc. This was a petition for review from the order of the Gaming Control Board, which approved the conditional license for the racetrack at Presque Isle Downs in October 2006. The Supreme Court denied this petition for the following two reasons: that the petitioners did not pursue intervention to achieve party status in the administrative proceedings; and the petitioners did not allege an interest that is direct. The board issued its orders and adjudications regarding the permanent licenses on Feb. 1, 2007, and the appeal period expired on March 5. Petitions for review have been filed with the Supreme Court challenging the board’s awarding of licenses by Riverwalk Casino in Philadelphia, Station Square Gaming and IOC Pittsburgh in Pittsburgh, and Pocono Manor Investments in the Poconos. Appeals have also been filed by the city of Philadelphia and Philadelphia City Council; Neighbors Allied for the Best Riverfront; Society Hill Civic Association, et al.; and Jethro Heiko, Ed Goppelt, et al. MARY D. COLINS isone of the original appointeesby Gov. Edward G.Rendell to the PennsylvaniaGaming Control Board.She served as a judge of theCourt of Common Pleasin Philadelphia untilNovember 2004. She is theboard member who is chairingthe committee responsible for drafting the board’s regulations.She was elected to the Court of Common Pleasof Philadelphia County in 1990 and won retention in2000.

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