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By Eileen Godin[email protected]

PLAINS TWP. — Mohegan Sun Pocono� is among a consortium of 10 Pennsylvania casinos seeking “friendlier” state regulations — including 24-hour liquor service — to help them stay competitive with gaming operations in other states.

Ten out of 12 Pennsylvania casino heads, including Mohegan Sun Pocono CEO Michael Bean, signed a letter emailed to the four ranking legislative leaders and Gov. Tom Wolf on Tuesday.

The 11-paged letter outlines “significant risks” the nine-year-old state gaming industry faces. It includes suggestions for changes to state laws, which could put the odds for continued growth in the casinos’ favor.

The move comes as the state’s once-thriving casino industry has experienced a two-year decline in gaming tax revenue. In 2013, gaming tax revenue dipped to $1.38 billion and further declined to $1.32 billion in 2014. The gross revenue peaked in 2012 at $1.4 billion.

“Declining gaming revenue, with consequent effects on gaming tax revenue, can be attributed to two factors: a near full-recapture of Pennsylvania gamers who previously had been traveling to out-of-state casinos and the loss of out-of-state gaming patrons from neighboring states,” the letter stated.

Industry’s view
In an interview Wednesday, Bean said the letter was meant to serve as a communication link to legislators letting them know where the industry stands.

“Fifty-five percent of the gross revenue from slot gaming goes to the state,” Bean said. “The interest (between legislators and casinos) goes hand-in-hand.”

Gaming markets in New York, Maryland and Ohio have been growing. However, in 2014 Atlantic City saw five casinos close, putting over 9,000 people out of work. Pennsylvania casinos currently employ 33,574, according to the letter.

Bean said Pennsylvania casinos are not facing the same threat, but they are looking for ways to remain competitive.

Since opening as the state’s first casino in 2006, Mohegan Sun has emerged as Northeastern Pennsylvania’s busiest entertainment venue and one of the region’s largest employers, with about 1,820 workers.
Appeal factor
Capitalizing on the attraction, the letter requests the General Assembly to “reject any expansion of casino-like gaming that is not done through existing casinos.” If approved, video gaming terminals would provide increased outlets for gaming, which would diminish casinos’ ability to generate gaming revenue weakening the industry.

Securing the market, owners request the General Assembly to refuse to “accelerate the issuance of a third Category 3 Resort Gaming license (from 2015 to 2017) and consider elimination of the license.” The provision also would allow some casino games in liquor establishments, which the 10 casinos oppose.

Casinos operators are seeking adjustments to the state’s liquor law to allow 24-hour service and oppose future restrictions on smoking. Some areas at the Plains Township casino now allow smoking.

“The Clean Indoor Air Act, already provides a sufficient balance between smoking and non-smoking areas on the gaming floor. The casino facilities are under strict PGCB (Pennsylvania Gaming Control Board) oversight with respect to the approval and maintenance of air handling systems and smoking mitigation measures,” the letter stated.

Wanting to be able to provide the newest casino games quickly, casino industry leaders asked for regulatory changes allowing casinos to install new slot and table games if approved by “another state gaming oversight authority or recognized third-party testing lab. Such new equipment should be automatically deemed acceptable unless subsequent PGCB Gaming Lab testing determines otherwise.”

Casino owners are reaching for reinvestment tax credits or incentives to encourage operators to invest in new equipment and facility up-grades.

Finally, the industry contends “promotional play” should not be a form of taxable gross revenue.

“Promotional play is a valuable marketing tool that is key to Pennsylvania’s casinos being competitive with their counterparts in neighboring states. This is particularly true in light of the Commonwealth’s high gaming tax rate.”

No response yet
Bean said he has not received a response back from legislators yet.

The office of Sen. Kim Ward, the majority chair of the Community, Economic and Recreational Development Committee, said Wednesday the senator has no response yet. Ward is Republican from Westmoreland County.

But Bean said “the desired outcome would be if they followed our recommendations” because the industry’s profitability determines how much it pumps into state coffers.

According to the Pittsburgh Tribune-Review, Rep. John Payne, chairman of the House Gaming Oversight Committee, said he hopes to hold hearings in the Poconos and Pittsburgh to learn from the casinos, “What is it you need over the next 10 years to be successful?”

Reach Eileen Godin at 570-991-6387 or on Twitter @TLNews.