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Posted At : August 8, 2008 02:49 PM | Posted By : D McKee
Related Categories:
Regulation,Pennsylvania,Don Barden
Score one, relunctantly, for the Pennsylvania Gaming Control Board. Despite gentlemanly threats and scare tactics from Neil Bluhm, the board is not letting itself be rushed into signing off on a new ownership arrangement at immobilized Majestic Star. The bogeyman was that if the PGCB didn't act yesterday (last month, actually), contractors would flee, foreclosure would ensue and all manner of dire events would keep the project in limbo for years.
The Bluhm-imposed deadline came and went, and no calamity has befallen the Pittsburgh casino ... unless you the Don Barden bumbling that brought us to this pass. (For which the PGCB can take a large slice of the blame.) Unfortunately, the majestic progress of the ship of state has allowed the bluenoses to get into the act. Seeing an opportunity to curb the spread of gambling or, better yet, create mischief, they're using the Barden-to-Bluhm transfer as a pretext to demand that further casino development in the Keystone State be brought to a screeching halt. This has as much chance of happening as Sheldon Adelson joining the board of Wynn Resorts, but they're gonna try anyway.
More serious, however, is the discrepancy that's emerged between Bluhm's revenue projections and those of the control board. In year one, Bluhm estimates revenue 15% higher than the PGCB forecasts. That's not the worrisome thought. When those projections are extended five years out, Bluhm's projection is 17% lower than the state's: 16% growth over five years vs. 41%, according to the control board.
I'm inclined to favor Bluhm's numbers for a variety of reasons. Majestic Star (or whatever it's eventually named) will almost certainly tap all of its potential market, or come very close, in its first year. Besides, Pittsburgh isn't a destination market and -- with no disrespect to the city -- is unlikely to evolve into one.
But, most of all, the control board's penchant for Panglossian optimism and downright naiveté has spectacularly eroded its credibility. Besides, with so many state and civic entities already plugging IVs into their veins, just waiting for those revenue-sharing dollars to start flowing, the temptation to opt for blue-sky scenarios is all too understandable.
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