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Penn National withdraws from proposed Lawrence County racino
By ROBERT CONNELLY
new castle, Pa.
Penn National Gaming Inc. has withdrawn from a proposed racino just 20 minutes from its Austintown facility.
The much-discussed Lawrence Downs Casino and Racing Resort would sit at U.S. Route 422 and Pennsylvania state Route 551 in Mahoning Township, about 20 miles east of Hollywood Gaming at Mahoning Valley Race Course. It has been estimated to provide 600 jobs. Endeka Entertainment LP has been involved with the project for a few years and has the harness-racing license for the proposed facility. An official with the Pennsylvania Harness Racing Commission said it had not received direct information from the parties as of Monday.
“Well, obviously, I’m disappointed, but I still remain hopeful that the Endeka investment group will secure a new partner and will work with the county,” said Lawrence County Commissioner Dan Vogler.
In a news release Monday, B.J. Fair, chief development officer for Penn National, said, “... given the continued softness in the economy and the level of market saturation — not just in Western Pennsylvania, but across the Commonwealth — we are regrettably unable to justify this investment.”
However, Vogler disagreed. “I think the saturation argument is one put forth by existing casinos who do not welcome additional competition,” he said.
Additionally, Penn National filed a complaint in Berks County (Pa.) Court of Common Pleas on Monday against Endeka. “We are disappointed that our continued open dialogue with the partners in Endeka about the deteriorating market conditions in Lawrence County, and our multiple offers to cooperate fully in transitioning the project to a new operator, have been met only with threats of legal action,” Fair said.
The facility would have 1,250 slot machines with room to expand to 1,500, about 40 live table games and 10 poker tables.
The Meadows Racetrack and Casino, based in Washington, Pa., south of Pittsburgh, made a presentation against the project last May, and Presque Isle Downs and Casino, in Erie, Pa., filed a petition for review against the Pennsylvania Harness Racing Commission and Endeka Entertainment in 2013. That case is still active.
Presque Isle argued that if Lawrence Downs opened, it would lead to more saturation on top of Hollywood Gaming’s opening in Austintown. The Meadows closed its off-track betting facility in New Castle on Nov. 30 because of increased competition from Ohio. Hollywood Gaming opened in Austintown in September 2014. “The area is getting and is already pretty saturated,” Alex Bumazhny, Fitch Ratings Service gaming analyst, said of the growth of gaming in eastern Ohio, western Pennsylvania and northern West Virginia.
Penn National and Endeka Entertainment were set to make a presentation to the Pennsylvania Gaming Control Board in a few weeks with an update on the project. An official with the PGCB echoed the harness commision in saying that the board had yet to receive a petition for withdrawal.
“My hope is that they will be able to find a new partner and this again is hopefully a temporary bump in the road,” Vogler said.