As The State Journal went to press this week, Pennsylvania was preparing to issue provisional gaming licenses to the state's horseracing tracks, giving them the go-ahead to plug in what ultimately will be thousands of slot machines.

Indeed, the harbinger of competition for West Virginia's gaming industry has come to roost, no longer a looming threat, but a reality. Pennsylvania competition is at the door, and Ohio voters soon will have the chance to weigh in on whether to allow slot machine gambling in their state, bringing even more competition to West Virginia tracks.

"We've been telling legislators for two years that this day is coming," said John Finamore, senior vice president of regional operations for Penn National Gaming, which owns Charles Town Races and Slots in Jefferson County.

"They've accused us of being fear-mongers," Finamore said. "I've had legislators say, 'I'll believe it when I see it.' Well, guess what -- the (Pennsylvania) racetracks will be given their licenses this week."

Ohio voters will decide Nov. 7 whether to approve Ballot Initiative 3, which would permit 35,000 slot machines at racetracks in the state, Finamore said.

"And the Maryland governor has said slot machines are a priority for him this year," Finamore said. "This day is here. The Legislature needs to understand that the industry has been trying to prepare for this, and once we get behind, it's very hard to catch up again.

"Right now, West Virginia properties have such a leg up on the competition in Pennsylvania, Ohio and Maryland. We don't want to lose that ground," he said.

Support Exists

The West Virginia Racing Association and representatives from the state's racetracks have tried unsuccessfully for two years to convince state lawmakers that residents in the four counties with tracks should be able to vote on whether casino-style table games can be added.

The association produced a new poll this month that shows more West Virginians than ever support the idea of a local options election on table games. As The State Journal reported last week, nearly 61 percent of state residents polled support the idea of allowing residents in those four counties to have a vote. In addition, a majority of Republicans, Democrats and independents who responded to the poll said they believe the voters in those counties should be able to decide whether their racetracks could offer table games.

The gaming industry's argument has stayed the same since it first started campaigning for table games two years ago: Out-of-state slot machine competition will have a negative impact on the track's video lottery performance, which will affect local jobs and state revenues. Adding table games will help West Virginia tracks stay a step ahead of the competition, allow them to preserve revenues and to add rather than lose jobs.

But political reticence and skepticism has kept the local option election bill legislatively stalled. In fact, the full membership of the House of Delegates has yet to debate the issue let alone vote on it, even though the high-profile bill has been introduced in each of the past two legislative sessions. The West Virginia Senate approved the table games bill in 2005, but members wanted the House to act first in 2006. It never did.

Pennsylvania Plans

The seven-member Pennsylvania Gaming Control Board was scheduled to vote Sept. 27 on whether to give provisional slot licenses to the six racetrack owners. With those licenses in hand, racetracks such as The Meadows, a harness track just 20 minutes from Wheeling, will start constructing facilities to house the new video slot machines.

When those buildings are ready for gamblers, Pennsylvanians no longer will have to cross state lines to try their hands at slot machines. And in December, the Gaming Control Board will work on finalizing the track licenses and pick from among several developers interested in creating stand-alone slot parlors.

In all, Pennsylvania has authorized up to 61,000 slot machines, and track owners are not content to get slot players for just a little while. They want to keep them around.

According to some media reports, track owners are spending more than $1 billion to replace old grandstands with new slot parlors connected to restaurants and spas.

Pennsylvania Gov. Ed Rendell has said he expects Pennsylvania's slots parlors to pull in $3 billion a year, with most of the state's share to be used to help cut local taxes and boost the state's share of spending on public schools.

Competition Timeline

Bob Marshall, president and general manager at Wheeling Island Racetrack and Gaming Center, said he anticipates The Meadows will be ready for video lottery by April, which means he will start to see a drop-off in gambling at Wheeling Island in March.

"It's so important to us that we get this table games bill," Marshall said.

Marshall said if the Legislature finally approves the local option election bill during the 2007 session, West Virginia tracks realistically will not be ready to offer table games until fall 2007, assuming local voters approve the measure. That unavoidable delay comes from the time needed to market the referendum, retrofit gaming areas for the new games and hire and train new staff members.

For Wheeling Island, that means an expensive lag time between the track losing money from competition at The Meadows while fronting a significant amount of cash to create the table gaming atmosphere.

"I anticipate a 30 percent to 40 percent drop-off in revenues," Marshall said. "Last year we paid $110 million in taxes, so take off about $30 (million) or $40 million of that."

He said state revenues are not the only area that will be affected -- Wheeling's share of video lottery revenues go to police and fire pension funds. In addition, Marshall said as much as 30 percent of the track's employment could be laid off after Wheeling Island feels the full effect of competition from Pennsylvania.

"We'll know pretty quickly once they're online how it's going to affect us," he said. "We have started preparing for it by not hiring anyone new. We are trying to make the jobs impact as low as possible."

Mountaineer Race Track and Gaming Resort in Chester also will feel the effects from Pennsylvania competition, but attempts to contact Mountaineer CEO Ted Arneault were unsuccessful at press time.