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The Associated Press September 20, 2011, 4:58PM ET

Report compares sites for future Pa. casinos

Revenue from legalized gambling in Pennsylvania has steadily grown as the industry establishes itself, but competition from neighboring states -- and even among in-state casinos -- could cut into that money, the state treasurer told a legislative panel Tuesday.

Rob McCord summarized a wide-ranging study of Pennsylvania's gambling industry before the Senate Community, Economic and Recreational Development Committee.

"The days of double-digit growth from month to month are likely behind us. We can expect future revenue growth that is more modest or simply plateaus, but that is not a cue for casino operators to become complacent," he said, referring to the struggling casinos of Atlantic City, N.J.

Pennsylvania's gambling industry has generated more than $5 billion in taxes and license fees since the first casino opened in late 2006, McCord told the senators.

In that same period, the seaside resort in neighboring New Jersey lost $1.5 billion and shed thousands of jobs. Next year, industry analysts say, Pennsylvania is expected to overtake Atlantic City as the nation's No. 2 gambling market.

Ten Pennsylvania casinos are currently open and two miniature "resort" casino licenses have been awarded, but the facilities are not yet built. Two more licenses have yet to be awarded by the Pennsylvania Gaming Control Board, including one reserved for a yet-to-be-built racetrack and one that, by law, must be built in Philadelphia.

The Innovation Group, the New Orleans-based consultant that produced the $44,000 study, identified 11 sites that could support a casino. It ranked them based on the potential revenue the state could net at each location, taking into account the effect of competition from surrounding states and the impact on existing Pennsylvania casinos.

The estimates ranged from York, where the consultant said a casino could add $154 million a year to state coffers, to Williamsport, projected at $55 million.

Also on the list are the sites of the proposed Valley View Downs & Casino in Lawrence County and the proposed Foxwoods site in Philadelphia.

The revenue potential of the Valley View plan hinges on whether a proposed racino, just across the Ohio line in Youngstown, is approved in that state, the consultant said. If it is built, the Valley View site would generate about $83 million, compared with $123 million if the Youngstown facility is not built, the report said.

The Valley View site developer has applied for a state harness-racing license and, if that is successful, plans to seek a casino license from the gaming board.

In Philadelphia, the Foxwoods site was projected to generate $90 million in state revenue, the consultant said. The gaming board revoked a license for that project and the developer has appealed to Commonwealth Court.

Committee chairwoman Sen. Jane Earll, R-Erie, asked Paul Girvan, Innovation's managing director, why the state should interfere with the business decisions of the Valley View and Foxwoods developers.

"Why would we second-guess that?" she asked.

"They're less concerned, or not concerned, about how much they're going to cannibalize other operators," Girvan replied.

"OK," said Earll, "that's a good answer."

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