RIVERBOAT/SHIPBOARD GAMING LEGISLATION

The following is a review of recent federal and state developments relative to riverboat and shipboard gaming. These reports are updated as circumstances warrant. If you have questions, comments, information on recent developments, or would like additional information, please contact Larry Evans at (301) 423-3335.

National Summary

New Developments (updated 5/23/02)

After the Illinois Gaming Board rejected a $330 million offer from Emerald Casino Inc. to settle the dispute over the company's stalled effort to open a casino in the Chicago suburb of Rosemont, Emerald has floated the idea of putting its casino license up for bid.

Illinois riverboat casinos would see their taxes increase by $150 million per year under a proposal crafted by Illinois Senate Republicans to ease the state's budget deficit. The idea reportedly has broad support in the Illinois General Assembly.

As part of a budget-relief plan being floated by the Illinois gaming industry and endorsed by the Illinois Senate's top Republican, Illinois casinos would each be permitted up to 400 more gaming positions. Raising the limit on the number of games is seen as a way to cushion the industry from the impact of a possible tax increase.

As Maryland's gubernatorial race gets underway, and with every state legislator up for election in November, the contentious issue of whether to permit Maryland's struggling horse-racing industry to operate slot machines will be hotly debated in the coming months.

Maryland Gov. Parris N. Glendening, who leaves office next January, has stood firmly against the legalization of slot machines. Lt. Gov. Kathleen Kennedy Townsend, who recently launched her campaign to succeed Glendening, also rejects the idea of putting slot machines at horse tracks, while the Republican gubernatorial candidate, U.S. Rep. Robert L. Ehrlich Jr., favors it.

Public feuding among industry leaders has further complicated the issue by angering key legislators in Annapolis.

In South Carolina, a Senate committee approved legislation in April that would give county and municipal governments the authority to prohibit or regulate gaming activity on cruise-to-nowhere boats, whereas the House passed a bill that would impose a statewide ban on gaming "cruises to nowhere" while giving county and municipal governments the authority to exempt themselves from it.

Previous National Summary Update

Federal Legislation

New Developments (updated 5/29/02)

Court backs South Carolina in a dispute with the Federal Maritime Commission: In a 5-4 ruling on May 28, 2002, the U.S. Supreme Court barred a federal agency, in this case the Federal Maritime Commission (FMC), from taking action against a state, or an agency thereof, based on a complaint from a private party.

The South Carolina State Ports Authority (SCSPA) ruled that the Tropic Sea, a cruise ship operated by South Carolina Maritime Services, Inc. (Maritime Services), couldn't dock at Charleston's port because the vessel's primary purpose was to operate as a floating casino on so-called cruises-to-nowhere, which was deemed to be in violation of state law. (The South Carolina Supreme Court later cleared the way for casino gaming activity aboard ships operating on cruises-to-nowhere from the state, but only while they are in international waters.)

In a complaint filed with the FMC, Maritime Services contended that the SCSPA, in denying the company permission to berth its vessel at the SCSPA's port facilities in Charleston, violated the Shipping Act of 1984.

The 4th Circuit Court of Appeals ruled in March 2001 that the state's immunity under the U.S. Constitution's 11th Amendment prohibited the FMC from taking action on behalf of the ship's operator.

In ruling as it did, thus voiding an FMC order against the SCSPA, the Supreme Court relied on the same constitutional theory.

"We hold that state sovereign immunity bars the FMC from adjudicating complaints filed by a private party against a non-consenting state," the court said in an opinion written by Justice Clarence Thomas.

"If the Framers [of the Constitution] thought it an impermissible affront to a state's dignity to be required to answer the complaints of private parties in federal courts, we cannot imagine that they would have found it acceptable to compel a state to do exactly the same thing before the administrative tribunal of an agency, such as the FMC," said the opinion, also joined by Chief Justice William H. Rehnquist and Justices Sandra Day O'Connor, Antonin Scalia and Anthony M. Kennedy.

Dissenting from the majority opinion were Justices Stephen G. Breyer, John Paul Stevens, David H. Souter and Ruth Bader Ginsburg. Justice Breyer took the unusual step of reading aloud from the bench lengthy portions of a bluntly worded dissent.

Philip C. Hughey, a lawyer for the FMC, said the Supreme Court decision affects a small portion of the panel's authority.

"Under the court's opinion, the commission will retain its authority to regulate state-run ports so long as the commission utilizes its authority to investigate and act on its own initiative instead of on a private complaint," said Hughey.

Previous Federal Legislation Update

Arkansas

New Developments (updated 12/4/00)

Casino gaming proposal rejected: On November 7, Arkansas voters soundly defeated a plan to legalize casino gaming in six counties and create a state lottery.

Had the amendment passed, it would have given Arkansas Casino Corp. the exclusive right to build and operate casinos in Pulaski, Sebastian, Garland, Boone, Crittenden and Miller counties.

Under the proposal, casinos would have been free from state regulation and required to pay 15 percent of their net revenue for a special gaming tax. They would have been exempt from all other taxes.

"We're very gratified," said Larry Page of Little Rock, chairman of the Committee for Ethics Policy, an anti-gaming group. "It was a terrible piece of public policy that would grant an unregulated monopoly to a private company. This should put to rest for the foreseeable future any efforts to legalize gambling."

Glen Hooks of Little Rock, campaign manager for the amendment, said voters sent a clear message against the plan. "We believe the people of Arkansas will be in favor of casino gaming at some point in the future, but not this time," he said.

Arkansas Gov. Mike Huckabee opposed the measure, as did leaders of the state's religious community.

Gambling is illegal in Arkansas except for pari-mutuel wagering on horse races at Oaklawn Park in Hot Springs and dog races at Southland Greyhound Park in West Memphis.

Previous Arkansas Update

California

New Developments (updated 12/4/00)

California is said to have the potential to become the country's largest gaming market: California eventually may become the largest statewide casino gaming market in the country, exceeding even Nevada, according to a panel of Indian gaming experts.

Citing reports by casino industry experts and Wall Street investment bankers, the panel predicted that tribal casinos in California will generate from $4.7 billion to $10 billion a year by 2004.

"I would suggest to you that there is no place in the country that has more growth potential than Indian gaming in California," Jacob Coin, executive director of the California Nations Indian Gaming Association, told attendees of the Executive Gaming Summit 2000 in Las Vegas last month.

In March of this year, voters approved an amendment to the California constitution allowing casino-style gaming on the state's 107 tribal reservations. About 60 tribes are expected to open new casinos or expand existing bingo-style halls.

Estimates on the growth of tribal gaming in California vary widely because industry observers are unsure how many gaming machines will be allowed on the reservations under compacts signed by Gov. Gray Davis and about 60 tribal governments. Depending on how the agreements are interpreted, there may be anywhere from 45,000 to more than 100,000 machines.

If there are more than 100,000 devices, they could generate more than $10 billion a year, according to Bill Eadington, director of the Institute for Gambling and Commercial Gaming at the University of Nevada, Reno.

Nevada casinos won $9.02 billion in 1999, more than any other state. Atlantic City, N.J., casinos won about $4.1 billion, and Mississippi casinos won $2.5 billion.

Jason Ader, a leading industry analyst for Bear Stearns & Co., said the tribal gaming operations in California will win about $5.7 billion a year.

Previous California Update

Connecticut

New Developments (updated 9/10/98)

Gambling funds have become an important source of revenue for Connecticut: Legalized gambling generated $527 million for the Connecticut government last year, making it the fourth-largest source of funding after the income tax, the sales tax and the corporation tax. During the fiscal year that ended June 30, Connecticut's two Indian-owned casinos -- Foxwoods and Mohegan Sun -- contributed some $256 million to state coffers.

More than $13 billion was wagered on slot machines at the two casinos during the year. Under state law, the government receives 25 percent of a casino's slot win. For the fiscal year ended June 30, the slot win at Foxwoods and Mohegan Sun was $660 million and $348 million respectively. Foxwood's slot revenues rose by eight percent last year.

The state lottery, which began in 1972 and is now run by a quasi-private corporation, contributed $264 million to the state budget in fiscal 1998, up from $251 million in fiscal 1997.

Delaware

New Developments (updated 6/21/01)

Proposal to expand Delaware gaming activity: House Bill 280, introduced on June 12 and referred to the House Gaming and Parimutuels Committee, provides for a limited expansion of Delaware's gaming system beyond the state's horse tracks.

The measure is intended to provide a dedicated source of revenue for the financial support of non-profit organizations that help people in need, and to provide additional revenue to support community redevelopment initiatives, particularly in targeted areas.

The bill would amend the state's lottery law to permit the owners or operators of "Qualified Entertainment Venues" (defined as a vessel, barge or other floating facility that is berthed or moored in a "Qualified Entertainment Zone") to be licensed as video lottery agents.

A "Qualified Entertainment Zone" is defined as "property within or adjoining a brownfield, a targeted area, or an area in need of redevelopment, which is located on or adjacent to a navigable waterway, adjoining an area where musical, theatrical or other performing arts entertainment is offered to the public on a regular basis in connection with food and beverage service".

Operators of Qualified Entertainment Venues (of sufficient size to accommodate 1,000 video lottery machines) would be required to pay a progressively increasing percentage of the daily win from their video lottery operations into a Community Services Fund, from which grants would be made.

Any person, corporation or partnership could be licensed as a video lottery agent for only one Qualified Entertainment Venue in any Qualified Entertainment Zone.

The legislation would not change the guaranteed minimum 87 percent return to players, the established percentages of the proceeds returned to the state, or the reimbursements to the state currently set forth in the State Lottery Act regarding video lottery operations.

After all such payments are made, 10 percent of the first $25,000 in remaining daily proceeds, and 20 percent of the next $25,000, shall be paid into the fund. Where the average daily win exceeds $50,000, a flat 20 percent of all of the remaining daily proceeds shall be paid into the fund.

In addition to the specified payments to the fund, each operator of a Qualified Entertainment Venue shall pay an additional amount (10 percent of an amount equal to the operator's commission, less the venue's operating expenses, including any related debt service) to certain non-profit organizations.

Florida

New Developments (updated 4/30/03)

Proposed ban on cruise-to-nowhere gaming: Florida Senate Bill 2800, sponsored by Sen. Mike Haridopolos (R-Melbourne), would have prohibited gaming activity aboard vessels on cruises that begin and end in the state and do not include an intervening stop in another state or possession of the United States or a foreign country. The proposed ban would have taken effect January 1, 2004.

The bill, introduced on April 10 and referred to the Senate Regulated Industries Committee, is dead for this year. Sen. Haridopolos asked the committee to set the legislation aside after Ralph Haben, a former state legislator who now represents many of Florida's gaming vessel operators, promised to work with legislators on a way to tax and regulate Florida's casino boat industry.

Previous Florida Update

Hawaii

New Developments (02/17/04)

Proposal to ban gambling: House Bill 1501, introduced last year and carried over to this year's legislative session, proposes a constitutional amendment banning all forms of gambling in Hawaii, with the exception of "social gambling" authorized by law before the amendment's effective date.

The proposal would be voted on in a ballot referendum.

Shipboard gaming: Senate Bill (S.B.) 1678, also carried over from last year, would authorize shipboard gaming activity during excursions in state waters, on vessels accommodating at least 100 passengers.

The measure would authorize a newly formed Hawaii Gaming Board to issue up to four shipboard gaming licenses, permitting the operation of one gaming ship per license.

License applicants who have operated non-gaming ships in Hawaii, who present plans providing for "significant" economic development, or who hold gaming licenses in other U.S. jurisdictions, would receive "favorable consideration" from the board.

S.B. 1678 provides for an application fee of $25,000, and an annual license fee of $10 million.

Adjusted gross gaming receipts would be taxed at a rate of twelve percent; however, $83,333,333 in annual adjusted gross receipts would be exempt from taxes.

The bill provides for its automatic repeal on December 31, 2008.

House Bill 1403 is identical to the Senate measure.

Previous Hawaii Update

Illinois

New Developments (updated 3/17/04)

Rosemont wins state's 10th casino: On March 15, the Illinois Gaming Board awarded the state's last available casino license to Isle of Capri Casinos Inc., which will put the casino in Rosemont, a suburb of Chicago.

Isle of Capri was chosen by a 4-1 vote from among three finalists, contrary to the advice of the board's staff, which had recommended Midwest Gaming & Entertainment's proposal for a casino in Des Plaines, just north of Rosemont. Although Midwest's $476 million bid was the lowest of the three, the company contended that its lower offer would be offset by the gaming tax revenues from its Des Plaines site.

The high bid of $520 million -- $2 million more than Isle's bid - came from Harrah's Entertainment, for a Waukegan casino.

The license, which is currently held by Emerald Casino Inc., was auctioned under a plan put together by Illinois Attorney General Lisa Madigan. Emerald's onetime plan to build a casino in Rosemont was rejected by state gaming regulators in 2001.

As reported by the Chicago Sun-Times, Madigan indicated some concern over the board's choice, saying she was "surprised" by the selection of Isle because the board had rejected the earlier Rosemont proposal over alleged mob links. Emerald agreed to sell the license in U.S. Bankruptcy Court in response to the mob concerns and other allegations of wrongdoing regarding its casino proposal.

The deal must still be considered by Emerald shareholders and approved by U.S. Bankruptcy Judge Eugene Wedoff.

Previous Indiana Update

Iowa

New Developments (updated 2/9/04)

Iowa gaming licenses: Senate File 2047, introduced on January 27, would prohibit the Iowa Racing & Gaming Commission from limiting the number of gaming boat licenses that may be issued. The measure was referred to the Senate State Government Committee.

Previous Iowa Update

Kentucky

New Developments (updated 4/5/02)

Racetrack slots bill dies: A bill to allow slot machines at the state's eight racetracks, which was cleared for a vote by the full House after it underwent major revision in the House Licensing and Occupations Committee, is dead, having been quietly buried in the Appropriations and Revenue Committee.

Rep. James Callahan (D-District 67-Campbell), the bill's chief sponsor, had said it would come up for a vote in the House only if he was certain it had enough votes - 51 in the House and 20 in the Senate - to pass. He and House Majority Leader Gregory Stumbo (D-District 95-Floyd) also wanted assurances that top Senate Republicans who opposed the bill would not prevent it from receiving a vote. The signal never came.

Callahan has not entirely given up on the bill for this year, saying he will ask Gov. Paul Patton to consider putting it on the agenda if a special session is called. When asked about such a possibility, Patton was reportedly non-committal.

On April 2, Kentucky lawmakers went home for a 13-day break without passing a state budget, raising the prospect of a special session if they can't complete that task when they return on April 15 for the final day of the 60-day session.

As amended, House Bill 768 would give the Kentucky Lottery Corp. responsibility for regulating electronic gaming. The original bill called for the creation of a separate gaming commission for that purpose.

Other changes to the bill included the following:

** State tax revenue from the slot machines would be earmarked for teachers' salaries, a local project bond fund, school construction, prescription drugs for low-income seniors,mental health services, environmental cleanup, and a rainy day fund;

** The slots authority would comply with the same open meetings and open records laws as the rest of state government;

** Slot machines that accept credit or debit cards would be prohibited; and

** Anyone with ownership interest in a racetrack would be prohibited from selling goods, services or property related to electronic gaming.

Previous Kentucky Update

Louisiana

New Developments (updated 4/5/02)

Meeting of gaming-state legislators scheduled: The National Council of Legislators from Gaming States (NCLGS) will hold its summer meeting at the Royal Sonesta Hotel in New Orleans May 31-June 2.

The agenda for the meeting will include the following items:

Indian Gaming: How does it impact tribes and states? The State-Federal Relations Committee will vote on a state-tribal gaming compact checklist.

Lottery Revenues: What can be done to increase lottery revenues for the states? Do states benefit from broadening their lotteries to include other games?

Casinos: Can casino expansion help states out of an economic crisis?

Slots at Tracks: Should states approve slots at tracks and other gaming venues to bolster track and state revenues?

Compulsive Gambling: How can states limit and treat compulsive gambling?

For additional information concerning the upcoming meeting, contact the NCLGS by telephone at (518) 449-4699, by fax at (518) 432-5651, or by e-mail at nclgs@mackinco.com.

Previous Louisiana Update

Maine

New Developments (updated 7/24/01)

Awaiting approval for casino boat pier extension: Paul Golzbein's plan to operate a dinner and gaming ship cleared one hurdle this month when he won approval from the Old Orchard Beach Planning Board to build a 400-ft.-Iong pier extension that would connect to a floating dock.

However, because an outside engineering firm identified possible flaws in the design, Code Enforcement Officer James Nagle said he will call in another expert to make sure the pier extension is safe.

"I'm looking at it from a structural and safety point of view," Nagle said. "If the planning board says it's OK, and the engineering report comes back and says this structure is code-compliant and it's a safe situation, they'll be issued a building permit immediately. "

Golzbein hopes to offer whale watching, fishing expeditions and gaming on a 186-ft.long casino boat.

Maryland

New Developments (updated 4/14/04)

Slots legislation failed to clear both chambers of the Maryland legislature: Legislation to permit slot machine gaming passed the Senate but not the House during this year's Maryland General Assembly session which came to a close on April 12.

Gov. Robert L. Ehrlich Jr., a Republican, submitted a proposal in January to authorize 11,500 slot machines at four racetracks and an additional 4,000 machines at two "non-track destination locations" along Interstate 95.

After amending the measure to authorize 15,500 machines at three racetracks and three non-track sites, the Senate passed it in February by a 27-18 vote. It was strongly supported by Senate President Thomas V. Mike Miller, a Democrat who represents Prince George's and Calvert counties.

However, key opposition to the measure came from House Speaker Michael E. Busch, a Democrat from Anne Arundel County. Moreover, Del. Sheila E. Hixson, a Montgomery County Democrat and chairwoman of the House Ways and Means Committee, would only agree to approve a slots bill in conjunction with certain tax increases, which the governor adamantly rejected.

So, in the end, the House committee voted 19-2 to kill the governor's original bill, while unanimously rejecting the Senate-amended measure.

The slot machine issue is expected to return again next year.

Previous Maryland Update

Michigan

New developments (updated 1/13/99)

Detroit pushed ahead with its casino plans last month: Although Detroit officials had not resolved the land-acquisition problems that have been holding up the city's $1.8 billion casino project, some progress was being made last month, according to a recent report.

The Detroit Economic Development Corporation submitted a street plan for the immediate casino area, for example, and some progress was reportedly made in negotiations with riverside cement plants which must be moved to make room for the casino complex. Beth DunCombe, Detroit's casino coordinator, said the city is exploring the needs of the plant owners for new sites.

She and other city officials continued the work of estimating how much it will cost to acquire, clean up and prepare land on the east riverfront for the permanent casinos. Preliminary estimates put the cost at $247 million. The developers agreed to spend up to $250 million. In their negotiations with the city, however, the casinos have questioned the city's estimate of $154 million to purchase the land.

Mississippi

New Developments (updated 10/24/00)

Anti-casino initiative blocked: Early last month, by a vote of 8-1, the Mississippi Supreme Court upheld an earlier ruling by Hinds County Circuit Judge James Graves that blocked a proposal for a statewide ballot referendum on a constitutional amendment to ban casino gaming.

Graves said the initiative failed to qualify for the ballot because it did not include an estimate as to how much tax money would be lost if casinos were closed.

Stoner has made three attempts to use the initiative process to get a statewide vote on casino gaming. Courts ruled against her each time, citing problems over wording. Her latest proposal to ban casinos and lotteries was challenged in circuit court by the Mississippi Gaming Association.

Study concludes that a casino tax increase would be bad policy: The casino industry in Mississippi is hoping that an economic impact study released last month will discourage legislative efforts to increase gaming taxes.

The University of Southern Mississippi (USM) study included a recommendation that the combined 12 percent local and state tax rate on gross gaming revenue be maintained at its current level.

A four percent tax increase, as proposed by some legislators during the 1999 session, "will likely have negative economic and social consequences," according to the study, possibly resulting in the closing of some financially marginal casinos and the loss of several thousand jobs.

The study said a tax increase also would discourage Wall Street investment in the state's casino industry, eliminating capital for expansion projects and diminishing the industry's ability to fuel economic development and increased tourism.

Casino industry executives will doubtless use the study as a lobbying weapon if legislators attempt to raise casino taxes to pay for a promised increase in teacher salaries.

Within hours of the report's release, Rep. George Flaggs (D-Vicksburg) said it convinced him to back off his previous efforts to raise gaming taxes to finance the pay hike.

Using confidential financial data provided by most of Mississippi's 29 casinos, USM researchers said an additional four percent tax increase on gaming revenue would result in a 53 percent to 57 percent drop in net profits.

Previous Mississippi Update

Missouri

New Developments (updated 2/10/04)

Proposals to increase admission fees and repeal loss limit: Senate Bill 1058 would increase the gaming boat admission fee from two dollars to five dollars per person. The proposal would be submitted to Missouri voters as a referendum in November.

House Bill 815 would eliminate the loss limit ($500 per person per gaming excursion) at Missouri casinos, as would Senate Bill 863.

Previous Missouri Update

New Jersey

New Developments (updated 2/11/04)

Waterborne gaming legislation: Assembly Concurrent Resolution (ACR) 62, sponsored by Assemblywoman Nilsa Cruz-Perez (D-Camden), would authorize a statewide referendum on the question of whether the state constitution should be amended to permit the New Jersey State Legislature to allow waterborne gaming (on boats that cruise or remain permanently docked) if a bordering state authorizes any form of casino gaming.

The measure provides that only holders of Atlantic City casino licenses would be licensed to conduct casino gaming on waterborne platforms; that no single license holder in Atlantic City would be licensed to conduct casino gaming on more than three boats; and that waterborne casinos would be subject to the same tax rate on gaming revenue as that which now applies to land-based casinos.

ACR 62 was introduced in January and referred to the Assembly Tourism and Gaming Committee.

An identical measure, Senate Concurrent Resolution 16, is pending in the Senate Wagering, Tourism & Historic Preservation Committee. Sen. Wayne R. Bryant (D-Camden) is the sponsor.

Previous New Jersey Update

New York

New Developments (updated 11/28/01)

New York gambling plan becomes law: By an overwhelming margin, the New York State Legislature passed legislation last month to greatly expand gambling in the state, with leaders talking of a crucial need for new revenue sources in the wake of the World Trade Center attacks.

The Republican-controlled Senate approved the bill by a lopsided vote of 52-8 on October 24. The next day, the Democratic-run Assembly passed the measure 92-41. The bill went immediately to Gov. George Pataki, who signed it on October 31.

The new law expands the permitted number of Indian-run casinos in the state from two to as many as eight, allows video lottery terminals at many horse tracks, and permits New Yorkers to buy tickets to the multistate Powerball lottery.

Senate Majority Leader Joseph Bruno (R-District 43-Rensselaer, Saratoga) estimated that the package could be worth $1 billion annually to the state within the next three or four years.

"We're desperate for cash," Bruno said. "Our revenues have fallen off a cliff."

Bruno and Assembly Speaker Sheldon Silver (D-District 62-New York) both said they and the governor were impelled to support the measure by the economic and fiscal reverberations of the trade center disaster.

The package, described as the largest expansion of gambling in New York's history, calls for up to three casinos in the Niagara Falls-Buffalo region to be run by the Seneca Indians, and up to three American Indian-run casinos in the Catskill mountains.

New York currently has two Indian casinos - one near Utica and one near the Canadian border.

Previous New York Update

North Carolina

New Developments (updated 10/22/01)

Casino boat leaves North Carolina: Lloyd Milliken moved his casino boat from Shallotte Point back to Little River, S.C., earlier this month after Brunswick County District Attorney Rex Gore vowed to confiscate the Magic Mermaid's gaming machines and block future "cruises to nowhere" off the North Carolina coast, saying state law prohibits them.

But Milliken said he is determined to bring the 110- foot boat back to Brunswick County, which it left after only two cruises.

"I wasn't about to leave my boat there and have it be raided," Milliken said. "But 1 am not giving up. 1 still think 1 am right, and the district attorney is completely wrong."

In July 1999, a three-judge panel of the 4rh V.S. Circuit Court of Appeals ruled that the federal Johnson Act (15 V.S.C. §1175) (a provision of which permits offshore gaming on cruise-to-nowhere vessels, outside a state's territorial waters, from states that choose to allow the activity) does not preempt existing state anti-gambling laws.

According to that ruling, directed at South Carolina in particular but also applying to Virginia, West Virginia, Maryland and North Carolina, states are free to decide that their existing laws prohibiting land-based casino gaming also apply to cruise-to-nowhere operations.

However, the South Carolina Supreme Court ruled earlier this year that none of South Carolina's nine existing anti-gambling statutes applies to day-cruise vessels, leaving such vessels free to operate gaming cruises from docking sites in the state until the South Carolina Legislature enacts legislation specifically banning gaming activity on day-cruise operations.

A similar court ruling in North Carolina, should it come, could open the way for gaming cruises there.

Milliken said he is prepared to spend up to $2 million on legal fees in an effort to continue the Brunswick County cruises. He also said he plans to begin operating a casino boat from Charleston in the coming weeks.

Previous North Carolina Update

Pennsylvania (updated 5/22/03)

Pittsburgh casino proposal: On May 16, Pennsylvania state Sen. Jim Ferlo (D-Allegheny) introduced Senate Bill (S.B.) 761, which would establish the Pennsylvania Gaming Commission and permit the operation of riverboat casinos and hotel casinos in Pittsburgh.

The commission would be authorized to issue two operator licenses for riverboat gaming, and two operator licenses for hotel gaming. Each licensee would be permitted to operate one casino; no person could operate more than one casino; and no person would be allowed to own, directly or indirectly, an equity interest of more than five percent in more than one operator license.

S.B. 761 defines a “riverboat” as a watercraft, including a barge, on which gaming, dockside or otherwise, is conducted. The watercraft need not be self-propelled and may be permanently moored.

Riverboat casinos could operate on any rivers or lakes that are “used or are susceptible to being used as arteries of navigation or commerce, including any natural or artificial space, inlet, hollow or basin” situated in or adjacent to a bank of such a river or lake. However, “eligible waters” would not include any artificial space located more than 500 feet from the closest edge of the main channel of an eligible river or lake.

An applicant for an operator license would pay a nonrefundable application fee set by the commission, but no less than $250,000. Licenses would be subject to renewal every two years, with the renewal fee set at $25,000.

Riverboat casinos and hotel gaming establishments would be allowed by operate 24 hours a day, seven days a week.

The measure imposes a tax on adjusted gross gaming receipts at the rate of 35 percent.

At this point, the authorization to operate casinos would apply only to Pittsburgh, but a spokesman for Sen. Ferlo said it could be expanded to include other cities.

S.B. 761 was referred to the Senate Finance Committee.