Harness track in Indiana?
Lawrence County bidder makes new offer for financing harness track
The family partnership that wants to build a harness track and slots casino in Lawrence County was allowed Monday to present a new financing plan to the state Harness Racing Commission.
On Feb. 10, the commission granted Bedford Downs Management Corp., formed by three siblings in the Shick family, a new hearing after a $175 million financing deal with Isle of Capri Casinos, a Mississippi-based company, collapsed in early January.
Hearing examiner Edward Finkelstein had denied Bedford Downs' request to amend its application to reflect its new financing partners, Innovation Capital Holding and Merrill Lynch, but that decision was overturned by the commission's Feb. 10 ruling.
The Shick siblings have proposed building Bedford Downs in Mahoning Township. Their company is competing with Centaur Inc. of Indiana, which wants to build the $340 million Valley View Downs in South Beaver Township, for the state's only available harness license.
Under the state's gambling law passed last year, a slots license is reserved for the recipient of the harness license.
On Monday, attorneys for Bedford Downs were allowed to present testimony and evidence on the financing change as well as the involvement of Ed Tracy, a gambling consultant who would offer casino-management advice instead of Isle of Capri.
Harness Racing Commission officials were unavailable for comment.
In a ruling on Friday, however, Finkelstein prohibited Bedford Downs from eliciting testimony or submitting evidence on the involvement of Merit Management Group LP, a proposed investor; any change to a consulting agreement with Sam Houston Race Park in Texas; or any corporate restructuring by Bedford Downs.
In the opinion, Finkelstein reprimanded Bedford Downs, and its attorney, Victor Stabile, for failing to submit documents fully explaining the myriad changes it had made to its application.
"In spite of the assertion ... regarding Mr. Tracy, Mr. Stabile has noted that there is no agreement with Mr. Tracy regarding his involvement with Bedford and Mr. Stabile did not know if there would be an agreement with Mr. Tracy" for Monday's hearing, Finkelstein wrote. "The hearing examiner does not understand how Mr. Tracy would be involved as Bedford's gaming expert without any agreement between Bedford and Mr. Tracy as to his involvement."
Finkelstein also questioned the management agreement between Bedford Downs and Merit Management, which calls for disagreements to go to arbitration.
"Therefore, the management of the gaming operation at Bedford could wind up in the hands of an arbitrator rather than either Bedford or Merit," wrote Finkelstein. "Surely, this would not be acceptable to the gaming commission as there would be no knowledge of who was going to be controlling the gaming operations."
The gaming commission will issue slots licenses.
Finkelstein noted that Centaur has paid a commitment fee for financing and its partner, the Pennsylvania Real Estate Investment Trust, has already invested a "substantial amount of money" in Valley View Downs.
"Bedford appears to just keep waving paper at the commissioners in the hopes that something will stick," he wrote.
Lawrence County bidder makes new offer for financing harness track
The family partnership that wants to build a harness track and slots casino in Lawrence County was allowed Monday to present a new financing plan to the state Harness Racing Commission.
On Feb. 10, the commission granted Bedford Downs Management Corp., formed by three siblings in the Shick family, a new hearing after a $175 million financing deal with Isle of Capri Casinos, a Mississippi-based company, collapsed in early January.
Hearing examiner Edward Finkelstein had denied Bedford Downs' request to amend its application to reflect its new financing partners, Innovation Capital Holding and Merrill Lynch, but that decision was overturned by the commission's Feb. 10 ruling.
The Shick siblings have proposed building Bedford Downs in Mahoning Township. Their company is competing with Centaur Inc. of Indiana, which wants to build the $340 million Valley View Downs in South Beaver Township, for the state's only available harness license.
Under the state's gambling law passed last year, a slots license is reserved for the recipient of the harness license.
On Monday, attorneys for Bedford Downs were allowed to present testimony and evidence on the financing change as well as the involvement of Ed Tracy, a gambling consultant who would offer casino-management advice instead of Isle of Capri.
Harness Racing Commission officials were unavailable for comment.
In a ruling on Friday, however, Finkelstein prohibited Bedford Downs from eliciting testimony or submitting evidence on the involvement of Merit Management Group LP, a proposed investor; any change to a consulting agreement with Sam Houston Race Park in Texas; or any corporate restructuring by Bedford Downs.
In the opinion, Finkelstein reprimanded Bedford Downs, and its attorney, Victor Stabile, for failing to submit documents fully explaining the myriad changes it had made to its application.
"In spite of the assertion ... regarding Mr. Tracy, Mr. Stabile has noted that there is no agreement with Mr. Tracy regarding his involvement with Bedford and Mr. Stabile did not know if there would be an agreement with Mr. Tracy" for Monday's hearing, Finkelstein wrote. "The hearing examiner does not understand how Mr. Tracy would be involved as Bedford's gaming expert without any agreement between Bedford and Mr. Tracy as to his involvement."
Finkelstein also questioned the management agreement between Bedford Downs and Merit Management, which calls for disagreements to go to arbitration.
"Therefore, the management of the gaming operation at Bedford could wind up in the hands of an arbitrator rather than either Bedford or Merit," wrote Finkelstein. "Surely, this would not be acceptable to the gaming commission as there would be no knowledge of who was going to be controlling the gaming operations."
The gaming commission will issue slots licenses.
Finkelstein noted that Centaur has paid a commitment fee for financing and its partner, the Pennsylvania Real Estate Investment Trust, has already invested a "substantial amount of money" in Valley View Downs.
"Bedford appears to just keep waving paper at the commissioners in the hopes that something will stick," he wrote.
House panel passes stadium funding bill
INDIANAPOLIS -- A key House committee approved a plan to pay for a new stadium for the Indianapolis Colts yesterday -- one that relies not on new or expanded gambling but on higher taxes on existing casinos, including Caesars Indiana.
Indianapolis Mayor Bart Peterson had asked the legislature to put slot machines at Indiana racetracks and off-track betting centers to pay for $600 million in bonds for stadium construction.
But last week lawmakers rejected the idea.
Yesterday, House Ways and Means Committee Chairman Jeff Espich offered a new package, one that includes higher taxes on pro-player salaries, some cash from the state's coffers, a tax on tickets at the new stadium and a tax increase on the state's best performing casinos.
It would generate $44 million annually, slightly less than the amount Peterson said is needed to pay off the bonds.
The committee approved the plan 17-4, sending it to the full House for consideration next week.
It would cost Caesars Indiana, in Harrison County, about $1.4 million annually.
"Absolutely, we want to see the Colts stay in Indiana," said Caesars spokeswoman Judy Hess. "But we'd like to see the state explore other avenues to fund that stadium. We do not favor any more taxes to the casino industry."
Her comments reflected concerns expressed by the Casino Association of Indiana. Its director, Mike Smith, told the Ways and Means Committee that Hoosier casinos already pay among the highest tax rates in the country, second only to those in Illinois.
"We're not here to testify in opposition to the bill," Smith said.
But he told lawmakers that as casino corporations make decisions about which properties to invest in, they look to states where tax rates are lower and stable.
There was little sympathy, though, for the plight of the casinos, which last year had $2.3 billion in combined gambling revenue and paid about $742 million in admissions and wagering taxes.
Espich said Peterson's plan to put slot machines at horse racing venues -- essentially creating land-based casinos in Central Indiana -- could have caused dramatic cuts in some of the casinos' business.
He said the tax increase -- which raises from 35 percent to 36 percent the rate on a casino's annual revenue above $150 million -- is a fair compromise.
Caesars and four other boats currently generate enough revenue to get to the state's top tax bracket of 35 percent.
In all, the provision would generate about $13 million annually, Espich said. Of that, $8 million would go to the city of Indianapolis to help repay stadium construction bonds. The state would keep the rest.
The plan -- included in House Bill 1846 -- revives the once-stalled talks about building a stadium to keep the Colts from leaving Indianapolis in 2013 and moving to a larger market.
Without a new stadium, the city would also be forced to pay the Colts millions of dollars in so-called "makeup" payments to ensure that the team's revenue met the National Football League's average.
Yesterday, Peterson had little to say about the actual elements of the funding plan, which includes money he had hoped to use for a related expansion of the Indiana Convention Center.
Instead, he thanked lawmakers for their efforts and said he appreciated that they were moving a bill so the discussion could continue. Today is the deadline for bills to move out of their first committees.
"This was an important first step," he told the committee. "This is vitally important for the entire state of Indiana."
He noted, however, the absence of funding for the convention center, calling it an integral part of the downtown Indianapolis project.
House Speaker Brian Bosma said the convention center funding could come later.
In all, the package is designed to generate $44 million in annual revenue to pay off stadium bonds. It includes:
$10 million in revenue from surcharges of up to $10 per ticket for stadium events. Espich said lower-priced tickets would likely have lower surcharges, and higher priced ticket holders would pay the full $10. He said the city would make that call.
$2 million from a 2 percent tax on professional player salaries.
$1 million from the sale of Colts license plates, a proposal Gov. Mitch Daniels made.
$12 million from increases in taxes on hotel rooms and rental cars in Marion County. The innkeeper's tax would increase from 6 percent to 9 percent; the supplemental rental car tax would go from 2 percent to 4 percent.
$7 million in state sales and income taxes generated in the city's Professional Sports Development Area, which now includes the RCA Dome and convention center, as well as a baseball field and basketball arena. The city already keeps $5 million in state taxes generated in the area, but the state would raise the cap on those revenues to $12 million.
The remaining $12 million would come from the wagering tax, a cash contribution from the city and a surcharge on luxury boxes.
courier-journal.com
INDIANAPOLIS -- A key House committee approved a plan to pay for a new stadium for the Indianapolis Colts yesterday -- one that relies not on new or expanded gambling but on higher taxes on existing casinos, including Caesars Indiana.
Indianapolis Mayor Bart Peterson had asked the legislature to put slot machines at Indiana racetracks and off-track betting centers to pay for $600 million in bonds for stadium construction.
But last week lawmakers rejected the idea.
Yesterday, House Ways and Means Committee Chairman Jeff Espich offered a new package, one that includes higher taxes on pro-player salaries, some cash from the state's coffers, a tax on tickets at the new stadium and a tax increase on the state's best performing casinos.
It would generate $44 million annually, slightly less than the amount Peterson said is needed to pay off the bonds.
The committee approved the plan 17-4, sending it to the full House for consideration next week.
It would cost Caesars Indiana, in Harrison County, about $1.4 million annually.
"Absolutely, we want to see the Colts stay in Indiana," said Caesars spokeswoman Judy Hess. "But we'd like to see the state explore other avenues to fund that stadium. We do not favor any more taxes to the casino industry."
Her comments reflected concerns expressed by the Casino Association of Indiana. Its director, Mike Smith, told the Ways and Means Committee that Hoosier casinos already pay among the highest tax rates in the country, second only to those in Illinois.
"We're not here to testify in opposition to the bill," Smith said.
But he told lawmakers that as casino corporations make decisions about which properties to invest in, they look to states where tax rates are lower and stable.
There was little sympathy, though, for the plight of the casinos, which last year had $2.3 billion in combined gambling revenue and paid about $742 million in admissions and wagering taxes.
Espich said Peterson's plan to put slot machines at horse racing venues -- essentially creating land-based casinos in Central Indiana -- could have caused dramatic cuts in some of the casinos' business.
He said the tax increase -- which raises from 35 percent to 36 percent the rate on a casino's annual revenue above $150 million -- is a fair compromise.
Caesars and four other boats currently generate enough revenue to get to the state's top tax bracket of 35 percent.
In all, the provision would generate about $13 million annually, Espich said. Of that, $8 million would go to the city of Indianapolis to help repay stadium construction bonds. The state would keep the rest.
The plan -- included in House Bill 1846 -- revives the once-stalled talks about building a stadium to keep the Colts from leaving Indianapolis in 2013 and moving to a larger market.
Without a new stadium, the city would also be forced to pay the Colts millions of dollars in so-called "makeup" payments to ensure that the team's revenue met the National Football League's average.
Yesterday, Peterson had little to say about the actual elements of the funding plan, which includes money he had hoped to use for a related expansion of the Indiana Convention Center.
Instead, he thanked lawmakers for their efforts and said he appreciated that they were moving a bill so the discussion could continue. Today is the deadline for bills to move out of their first committees.
"This was an important first step," he told the committee. "This is vitally important for the entire state of Indiana."
He noted, however, the absence of funding for the convention center, calling it an integral part of the downtown Indianapolis project.
House Speaker Brian Bosma said the convention center funding could come later.
In all, the package is designed to generate $44 million in annual revenue to pay off stadium bonds. It includes:
$10 million in revenue from surcharges of up to $10 per ticket for stadium events. Espich said lower-priced tickets would likely have lower surcharges, and higher priced ticket holders would pay the full $10. He said the city would make that call.
$2 million from a 2 percent tax on professional player salaries.
$1 million from the sale of Colts license plates, a proposal Gov. Mitch Daniels made.
$12 million from increases in taxes on hotel rooms and rental cars in Marion County. The innkeeper's tax would increase from 6 percent to 9 percent; the supplemental rental car tax would go from 2 percent to 4 percent.
$7 million in state sales and income taxes generated in the city's Professional Sports Development Area, which now includes the RCA Dome and convention center, as well as a baseball field and basketball arena. The city already keeps $5 million in state taxes generated in the area, but the state would raise the cap on those revenues to $12 million.
The remaining $12 million would come from the wagering tax, a cash contribution from the city and a surcharge on luxury boxes.
courier-journal.com
