Valley View conditional gaming license denied

Jul 11, 2008 (New Castle News - McClatchy-Tribune Information Services via COMTEX) -- ZZVWL | Quote | Chart | News | PowerRating -- What were the odds?

Lawrence County once again is left wondering when a slots parlor license will come its way.

The Pennsylvania Gaming Control Board yesterday rejected the request of Indiana-based Centaur Inc. for a conditional slots gaming license for Valley View Downs -- its $450 million racetrack/casino planned for Mahoning Township.

Although Centaur received the state's final harness track license through the Pennsylvania State Harness Racing Commission on Sept. 5, and although the Pennsylvania gaming law virtually guarantees that the track license holder will be awarded a casino license, the gaming board decided unanimously yesterday not to award a conditional license.

The board's Investigation and Enforcement arm has not yet completed its background investigation or conducted a suitability hearing.

A statement issued by the gaming board stressed its decision yesterday to deny a conditional license does not mean it will deny the application in the future.

However, the release said, "... the background investigation of those persons who control the slot machine license must be completed prior to licensing the casino facility."

The investigation is continuing, and a suitability hearing will be scheduled to gather additional information and evidence necessary to consider the award.

"Today's decision does not impact any future decision by this board on Valley View's application for a slot operator's license," said Mary DiGiacomo Colins, board chairman.

She explained the application review and investigation is "not yet to the point where the board felt it had all necessary background information to meet Pennsylvania's strict regulations to issue a conditional license."

State Rep. Chris Sainato said he was disappointed the board did had not made the award.

"I had hoped they would break new ground," he said. "Although the law provides for it, they have never made a conditional license award yet."

About two weeks ago, Sainato said, he and state Sen. Gerald LaValle, in a letter to the gaming board, asked that special consideration be made to grant the conditional license for Valley View.

Sainato said he spent three hours at yesterday's hearing and commended Centaur on its presentation. "It was disappointing that afterward, the investigators came in and said. 'We don't support this.' This is precisely what we need in western Pennsylvania."

However, he said, he understands that the investigators must do their job.

"Nothing about this has been easy for the past five years but we've come this far," he said, adding, "There is nothing anyone can do (to speed the process along)."

Sainato said he supports Centaur and is concerned about its financing situation.

"I know this will happen," he said. "But it's hard to sit back and do nothing waiting for it."

Susan Kilkenny, Centaur's director of marketing and vice president of public relations, said the Indiana-based gaming and racing enterprise is still in the running.

"We are extremely disappointed that the board declined to award the conditional license but we remain encouraged," she said. "They told us the Bureau of investigation and Enforcement is near the completion of its investigation."

She said she does not know when to expect the investigation to be concluded.

In the meantime, she said, Centaur will continue its dialogue with its lenders.

"We are focusing on finding a solution and optimistic that we will reach a successful conclusion."

Kilkenny said Centaur "remains in almost continuous, daily discussion" with its financial backers, led by Credit Suisse, seeking funding extensions and amendments and confident that the project will go through.

In October, Centaur borrowed almost $1 billion to fund gambling projects in three states -- including Valley View.

Already, Kilkenny said, substantial investment was made at Hoosier Park Racing and Casino in Anderson Ind.

In March, Centaur, was granted a gambling game license for its Hoosier Park racetrack. Centaur owns and operates another racetrack/casino in Fortune Valley, Colo.

"Although we were disappointed with the decision, we are blessed to see the strong local contingency in Harrisburg," she said. "It is very clear that local people support and embrace this project. We will continue our economic development and bring Valley View to western Pennsylvania."

Centaur has as been in business since 1991.

"We've faced difficult situations before and worked our way through," Kilkenny said. "We're confident we'll do it again this time."

The high cost of gasoline won't be keeping local officials at home.

"It looks as if we'll be making more trips to Harrisburg," Lawrence County Commissioner Dan Vogler said via cell phone on his way home from yesterday's meeting of the Pennsylvania Gaming Control Board.

"It's disappointing, but we're not out of the running," he said of the board's rejection of Valley View Downs' request for a conditional slots parlor license.

In May, when the gaming board met in Mahoning Township, Centaur, Valley View's parent organization, urged the board to act quickly to award the license so financing would not be jeopardized. A temporary license, issued prior to completion of the board's investigation, would allow Centaur to preserve its funding.

All three Lawrence County commissioners, the county administrator, all three Mahoning Township supervisors and Frank Telesz, representing both the Lawrence County Building Trades and the Lawrence County Planning Commission, made the trek to Harrisburg yesterday. They were hoping to hear the commission award Centaur a conditional license to operate a casino.

At the hearing, they were joined by state Rep. Chris Sainato; Jim Ferruchie, who read a letter of support from U.S. Rep. Jason Altmire; and Anton Lepler, executive director of the Pennsylvania Harness Racing Commission, who testified on behalf of Centaur.

"We left the hearing disappointed but hopeful," Vogler said. "This is a temporary setback. I feel the board is sympathetic to our request (for the license) but made every effort to adhere to the letter and the spirit of the law.

James Ginty, who made the motion, "said he made it with regret," Vogler noted. "He acknowledged the economic benefits that the track and casino will have for Lawrence County."

Mahoning Township Supervisor Francis "Poncho" Exposito said he believes, "Centaur did what it needed to do to request the conditional license, and the commission did what it needed to do by rejecting it.

"But we're not out of the running. The application is still before the board."

The next meeting of the gaming control board is Aug. 13 in Harrisburg.

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