The Pennsylvania Gaming Control Board cannot agree on the licensing of slot machine distributors. It tried twice yesterday to reach a compromise, and failed. It’s next attempt will be on 2 November, but the timeframe for issuing the first operating licences for seven racetracks is likely to be extended to June 2006 rather than March. The problem is the dispute over the requirement in the July 2004 gaming law for Pennsylvania-based distributor companies.

Slot machine manufacturers would prefer to sell direct to the operations and service their own machines. However, the insistence on using middlemen was the result of an attempt to bring more employment into the state by creating new companies. It was felt that it would be an opportunity for more women and minority groups to create a business. The Gaming Control Board has so far been unable to decide on dividing Pennsylvania into regions from where the new companies would operate.

Frustration is growing over the impasse. An original plan for five regions has now been abandoned in favour of two, but differences remain. Some members of the Board feel that dividing the state in two for the purpose of distributorships may not even be legal, whilst other members think that if there is no division then the object of the distributor licence is defeated because one out-of-state company could corner the market. The 2004 gaming law does not stipulate that Pennsylvania should be split into operating regions, only that local distributors must be used to supply and maintain the slot machines.

Should a consensus continue to be unobtainable, the Pennsylvania Governor has indicated he might support a move to have the legal requirement for distributorships removed, which would suit the machine manufacturers. Until the matter is resolved, the 7 racetrack, 5 stand-alone and 2 resort licences cannot be issued, and the prospective $1 billion new revenue for the state will not be forthcoming. (E-10.21.05)

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