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Casino operators: Table games in Pa. would narrow budget deficit

Jeremy Boren
| Thursday, July 2, 2009

Legalized table games in Pennsylvania casinos would create thousands of well-paying jobs and narrow the state's crippling budget deficit, but taxes on them must be lower than those on slot machines, two Pittsburgh-area casino operators said Wednesday.

"They're good jobs, family-sustaining jobs," said Bill Paulos, a partner at Cannery Casino Resorts, which owns the 350,000-square-foot Meadows Racetrack & Casino in Washington County.

"We already have people calling us about jobs as dealers," he said. "These are all local people. And we're going to train everybody."

Paulos is pushing for legalization of table games, a topic that emerged in the Legislature before lawmakers and Gov. Ed Rendell narrowed their focus to negotiating a state budget that would eliminate a $3.2 billion deficit.

Rendell initially opposed allowing table games in casinos until all of the state's approved slot machine parlors are built and operating. The Legislature in 2004 authorized 14 slots casino licenses; eight casinos are open. Pittsburgh's is scheduled to open in August.

The governor last month said he would consider signing a bill to legalize table games to help lower the deficit. He estimated the first year of games could produce $200 million in tax collections.

"Obviously, he's had a big change of heart as he sees more red ink," Paulos said.

In West Virginia, 189 table games spread among three of its casinos produced $89.4 million in gross revenue from July 2008 through May 2009.

"We need to stay competitive with our next-door neighbors in West Virginia," said Kim Hawkins, executive director of the Meadows Standardbred Owners Association, which represents 700 horse owners, trainers and drivers at the harness-racing track. The slots law designated a portion of state taxes to benefit racing, but the track is struggling in the down economy.

"Table games would make The Meadows more of a destination for gamers," Hawkins said.

Table games would double the size of the 1,000-employee workforce at The Meadows' $175 million slots parlor in North Strabane, which opened in April to replace a temporary slots parlor erected in June 2007.

The complex, about 25 miles south of Pittsburgh, has 3,700 slot machines and room to house 40 tables for games such as blackjack, craps and roulette. It also has space for a 40-table room dedicated to poker games, Paulos said.

An analysis by Denver-based Innovation Group, paid for by three Pennsylvania gambling operators, estimates table games would create 16,000 jobs statewide and boost annual casino revenue by 30 percent to $976 million by 2012.

Paulos said the job creation estimates are realistic. For example, four dealers would rotate among three tables on each eight-hour shift, he said. Add to that floor men, pit bosses, managers, cashiers and security and surveillance personnel.

Ed Fasulo, president and CEO of Rivers Casino on the North Shore, said table games are so "labor intensive" that they must be taxed at a lower rate than slot machines to be profitable, a sentiment Paulos echoed.

Slot machines are taxed at 55 percent. Fasulo said he wants to see a tax rate of 12 percent to 15 percent on table games.

"Anything more could cause us to lose interest," Fasulo said.

House Bill 21, introduced by House Majority Whip Bill DeWeese, would impose a 21-percent tax on table games.

Dianne Berlin, coordinator of anti-gambling group CasinoFree PA, said table games will increase cases of gambling addition and breed crime, suicide, homelessness and other social ills.

"The reason they want to have table games is that they want to attract the young people, who have more earning potential than older players," she said. "No matter what kind of gambling is introduced, it's never going to be enough. The gambling interests have an insatiable appetite."

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