On 18 July the Pennsylvania Gaming Control Board published the ownership structure for the Pittsburgh casino of the proposed joint venture agreement by Holding Acquisition Co L.P. and PITG Gaming L.L.C., which is currently pending before the PGCB for consideration. Yesterday State Senators were asking questions about the proposed rescue package of Don Barden’s casino project by real estate investor Neil G. Bluhm, a primary investor in Philadelphia’s Sugar House Casino project.

According to Donald Barden the US$800 million Majestic Star casino ran into problems caused by spiralling steel prices and the present credit crunch. Work began last year with a US$200 million loan and he now faces bankruptcy without the joint venture agreement. However, some Senators are questioning whether the rescue bid will rush the PGCB into compounding the mistake that some believe it made in granting Barden the licence in the first place.

If subcontractors on the Majestic Star casino site in Pittsburgh pull out because they have not received payment for several months, then the whole project will face additional costs and fail to be completed on schedule. The Senators were told that this was the probable scenario if work does not restart by next Wednesday, but the PGCB is unlikely to be able to approve the proposed joint venture rescue within this time frame.

If the US$50 million casino licence for Pittsburgh is revoked new applications must be invited – a process expected to take at least a year. This would mean a considerable loss of tax revenue for Pennsylvania. A date for the joint venture hearing has yet to be announced but PGCB Chair Mary DiGiacomo Colins stated, "There has been a broad spectrum of opinions on this matter from local and state government officials either by letter to the Board or through comments to the media. In order to make sure the Board clearly understands the basis of these opinions, we are inviting elected officials to provide testimony and comments to be made part of the record and used by us in making our determination." (E-07.25.08)

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