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Analyst: Pennsylvania Plan Not Enough

27 June 2003

PENNSYLVANIA – As reported by the Philadelphia Daily News: “Even with a proposed $50 million license fee, the state stands to collect only "chump change" for the lucrative licenses to run slot machines at Pennsylvania race tracks, according to an independent analyst.

"`This is pennies on the dollar for what these licenses are worth,’ said Jeffrey C. Hooke, president of a small investment banking firm outside Washington, D.C. `It's a real giveaway … It's pathetic.’

“Hooke was reacting to a proposal unveiled this week by gambling proponents in the state Senate, requiring racetrack owners to pay upfront fees of $50 million each for slot-machine franchises.

“With four existing racetracks, two under construction and two more licenses waiting to be awarded, the proposal would raise $400 million in upfront license fees, on top of the state claiming 36 percent of gross profits from slot machines.

“…`While $50 million seems like a lot of money, that is a 90 percent discount on the real value of a license in Philadelphia,’ said Matthew J. Brouillette, president of the Commonwealth Foundation, an economic think-tank based in Harrisburg.

“…Gov. Rendell, who had previously opposed any fees for the slot-machine licenses beyond a 35 percent share of the take, said yesterday that he supported the Senate plan…”

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