Saturday, March 03, 2007

casino appeals.... huh?

Just before the casino license decision I had mused that it would be ironic if Majestic Star won after all the attention had been focused on whether it would be Isle of Capri or Harrahs. I wish I had made that a formal prediction, but I hedged. It would not have been that unreasonable as a prediction despite common wisdom to the contrary. Harrahs had recently announced a corporate buyout that questioned their commitment to this project. Isle of Capri was getting hit with the mounting local opposition in the Hill District and there were public rumblings on Wall Street that because of the new arena promise they were committing to a bigger expense than was justified. Even if it was only by default, Majestic Star was clearly in the running even though everyone had written them off.

The thing is.. for Harrahs, the earlier questions are still there. For that reason I thought they would just cut their losses and move on. Isle of Capri is a different case, but still I didnt think it would be worth the effort to appeal. The criteria by which the Gambling boards decision could be overturned is a really impossible bar to reach. Thus I really wonder.. is this a legitimate attempt by either of them to wrest the license from Don Barden or is it just a case of sour grapes. For relatively minimal cost, they can impose some real costs on a competitior. The potential hit is pretty huge. The delay itself is probably $millions in revenue next year. The bigger problem is how can Don Barden enter into an agreement with the SEA over the funding of a new sports venue if he can't say for sure he has the license. Makes the whole Penguins deal even dicier. So that is all left up in the air.

How long it takes to resolve?? I have no idea. There was one appeal before these and I think it was adjudicated by the supreme court rather swiftly. But if it really drags on who knows what it means.

One thing that did irk me a little this week was Majestic Star saying that delays in obtaining the licensing will delay the opening here. There has not been any abnormal delay. In fact, most of the delays thus far should have been anticipated from the beginning. Even the latest news on the appeals is irrelevant in that the appeals process itself is a clearly identified part of the process. So the earlier predictions that there could be a casino open here my March of 2008 were never credible. Even before the appeals they were saying summer 2008 at the earliest. With any delay caused by these appeals it is now the fall if everything else goes smoothly. Anyone really believe any development in the region can proceed at an optimal pace? Sure sounds to me we are talking very late 2008 or 2009 which will have real implications for the city's budget if casino revenues don't even happen in 08.


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