ToCasino.net Online Casino

The proposed Lawrence County casino and harness racing track, which has been on the drawing board since 2003, will remain stuck there indefinitely — and perhaps infinitely — now that its would-be developers have turned on each other.

Penn National Gaming, one of the largest U.S. casino companies and minority financier to the long-stalled project, announced Monday that it has given up on its bid to build Lawrence Downs Casino and Racing Resort, a proposed $225 million track near New Castle.

And the company is pointing fingers at its partner, Philadelphia-based Endeka Entertainment, filing a legal complaint in Berks County Court of Common Pleas, asking the court to affirm Penn National’s right to throw in the towel.

“We are disappointed that our continued open dialogue with the partners in Endeka about the deteriorating market conditions in Lawrence County [have] been met only with threats of legal action,” B.J. Fair, chief development officer for the Reading, Pa., gaming company, said in a statement.

But “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.”

Part of that market saturation, at least regionally, is of Penn National’s own doing. When Penn National got on board with the Lawrence County project in 2013, it was already contemplating a thoroughbred track and casino near Youngstown, Ohio, just 20 miles away from the Lawrence County track.

Endeka’s litigation counsel, William Pietragallo, said in response that “Endeka Entertainment [is] troubled by the motivation behind this 11th-hour decision, and it would appear that Penn National Gaming is protecting its $250 million investment [in] Ohio.”

Endeka has filed its own lawsuit in Lawrence County Common Pleas Court, accusing Penn National of a “fraudulent scheme” to “destroy any chance” for Lawrence Downs. It also said Penn National bungled a $60 million international loan secured through CanAm Enterprises, a company that packages immigration-linked investment funds.

In a phone interview, Mr. Pietragallo accused Penn National of dragging its feet intentionally, then sandbagging the project now that Penn National’s Youngstown facility, Hollywood Gaming at Mahoning Valley Race Course, is open.

Meanwhile, the Lawrence County track is no closer to opening than it was in 2003, when businessman Carmen Shick applied for a harness license to build Bedford Downs. Four years later, the Bedford Downs project teamed up with one proposed by Centaur Gaming, an Indianapolis casino company, which had hoped to build a harness track called Valley View Downs in Beaver County. As part of the agreement, Centaur would move the project north, to Lawrence County.

Since then, it has been a revolving door of project managers and financiers: Centaur filed for bankruptcy and sold the Valley View assets at auction in 2010 to a Pittsburgh investor outfit called American Harness Tracks, which in turn handed the project over to Philadelphia’s Endeka Entertainment in 2012.

And in June 2013, Penn National formally joined the project, submitting a joint application, along with Endeka, to the Pennsylvania Gaming Control Board, asking for a casino license.

April was to be a make-or-break month for the project, with a looming April 9 paperwork deadline, and an April 29 public hearing before the gaming board. If Endeka and Penn National didn’t meet their deadlines, the gaming board’s Office of Enforcement Counsel, in a March 10 letter to the developers, said it would “recommend that the Endeka [casino] application be denied in whole.”

Such a ruling, Penn National said in its lawsuit, would cause “Penn National’s reputation [to be] irreparably harmed.”

While the gaming board has the ultimate up-or-down vote on which entity receives a casino license, it has no jurisdiction over which entity controls the harness license. That’s the purview of the state Harness Racing Commission, which said it hasn’t yet heard from either company.

“Should correspondence be received, the commission would review and make a determination of how to proceed,” said Brandi Hunter-Davenport, spokeswoman for the state Department of Agriculture, the agency that houses the harness commission.

The entity that owns the harness license also holds the rights to build a casino, because the state’s 2004 gaming law reserved one of the casino licenses for a harness track. And unless that law is rewritten by the state Legislature, the commission has the sole authority to keep the license in Lawrence County.

Sen. Elder Vogel, R-New Sewickley, said Penn National’s withdrawal “is truly disappointing news for our community.” And Lawrence County Commissioner Dan Vogler said the project’s failure to launch “has tested everyone’s patience.” But he added that commissioners remain committed to $50 million in bond financing to make the racetrack a reality.