News

Mayor Tom Murphy said Wednesday the city should consider seeking the $50 million license for a slots parlor -- an idea City Council already endorses.

"It's premature for me to say it's a good idea or a bad idea, because I don't know enough about it," Murphy said. "It's worth exploring."

Murphy said he wants the Pittsburgh Gaming Task Force, which he appointed in March, to study the "economics" of a slots parlor and then consider "whether it's worth getting a license."

The city would face a tight deadline to submit a casino application by late December. It would have to compete against private developers who have said they will seek the license.

Alco Parking Co. president Merrill Stabile, who wants to put a casino on the North Shore, said it's "always problematic" when government runs a private business. He cited the state-run liquor stores as evidence.

"Quite often it's very difficult for those two to mix in a way that's efficient," he said.

Other potential competitors for the slots license declined to comment.

City Council members -- minus Sala Udin, who was absent -- unanimously agreed yesterday to ask the mayor to apply for a gambling license. President Gene Ricciardi, who introduced the idea, said he opposes gambling but wants taxpayers to get the most money possible from a slots parlor in the city. A final council vote on the request to Murphy is expected Tuesday.

The Pennsylvania Gaming Control Board will issue 14 licenses to operate slots parlors, including one in Pittsburgh. The stand-alone casino could eventually hold up to 5,000 machines.

"There's nothing that would prevent them from applying," said Nick Hays, board spokesman. "They would, however, be required to go through the same licensing procedures as any other client."

No matter who wins the license, Pittsburgh will receive a host fee and tax money -- 2 percent of gross revenue or $10 million, whichever is higher -- from the casino. The city's five-year financial recovery plan includes $17.7 million in money from gambling each year, beginning in 2007.

"Why should we take just a host fee of $17 million and leave $200 million on the table?" Ricciardi said.

Pittsburgh could hire a private casino operator with 10 percent of gambling profits, Ricciardi said. That strategy would be similar to those proposed by local investors who would partner with national gambling companies.

Remaining money from a city-owned casino could be used to eliminate Pittsburgh's property tax, build a new public arena or pay down some of the city's nearly $1 billion in debt, Ricciardi said.

"We are prepared to spend a little bit of money to try to ... get some experts who know gaming to help us understand what the implications are for Pittsburgh," Murphy said. "Part of that would be whether it's worth getting a license."

The task force has hired a gambling consultant, but co-chair Anne Swager said the group had not planned to study whether the city should try to own the casino. Like the mayor, she said it makes sense to look at the issue before making a decision.

"Does it mean more money for the taxpayers?" Swager said. "You can start jumping to conclusions, but I think there's a fair amount to running a casino."

Robert Strauss, a public policy professor at Carnegie Mellon University, said it should be possible for the city to get a loan with the dedicated profits expected from gambling. The question is whether the city could issue tax-exempt public bonds, he said.

"It's not like putting up a new office building," Strauss said. "It's not a clear public purpose."

Another consideration would be the lost property tax revenue from a city-run casino, he said. A private casino would pay taxes.

It's doubtful the Legislature would allow Pittsburgh to get a license, Councilman Doug Shields said. Councilman Len Bodack said Pittsburgh's poor track record of financial management might be a factor.

"Not every casino succeeds," said Councilman William Peduto, who lost a mayoral bid this spring in the Democratic primary. "We're going to gamble with taxpayers' money."

• Most Read
• Most E-mailed
• Latest News