An American Indian tribe has agreed to buy the Pocono Downs Racetrack, then add slot machines and a casino there, in a $505 million project.
The Mohegan Tribal Gaming Authority, which operates the Mohegan Sun casino and resort in Uncasville, Conn., intends to buy the property from Penn National Gaming Inc.
Penn National Gaming had hoped to add slots to the Wilkes-Barre track itself, said chief executive officer Peter M. Carlino on Friday.
But due to restrictions imposed by the state's new slot-machine law, "we concluded we had no alternative but to sell this property," he said in a prepared statement.
Under the law, a company that owns 100 percent of one slots facility in Pennsylvania is allowed to own only a third of another.
So Penn National Gaming will focus on adding slots by early 2006 to its flagship racetrack, Penn National Race Course in Grantville, said Carlino.
Pocono Downs, about a 21-w-hour drive from Lancaster, has been owned by Penn National Gaming since 1996.
Wyomissing-based Penn National Gaming, which has an off-track wagering parlor at East Towne Mall here, said it expects the sale to be completed by year-end, subject to regulatory approvals.
The deal would make Pocono Downs the first Pennsylvania racetrack to be owned by an American Indian tribe.
According to published reports, the Mohegan authority intends to:
--Pay $280 million to Penn National Gaming for the 40-year-old track, on 400 acres, plus off-track wagering parlors in Erie, Carbondale, East Stroudsburg, Hazleton and Allentown;
--Invest $175 million in constructing and equipping a casino there, to open in early 2006;
--Spend $50 million for a gaming license to operate 3,000 slot machines at the racetrack.
Carlino hailed the Mohegan authority's "proven track record as a successful and experienced gaming resort operator."
Opened in 1996, its Sun casino employs 9,500 workers who earn between $10 and $12 an hour, plus benefits that include medical, dental, vision and prescription insurance, Gambling Magazine reported.
While the Mohegan authority has invested in other tribal gaming operations in Wisconsin and Washington state, the Pocono Downs project would be its first outside existing tribal property, it said.
William J. Velardo, the Mohegan authority's president and chief executive officer, told the Citizens' Voice newspaper in Wilkes-Barre that the racetrack property there fit perfectly into the authority's long-term diversification strategy.
The attractive and sizable property, its proximity to highways and population centers, and the opportunity presented by Pennsylvania's new slots law combined to make the project appealing, Velardo told the newspaper.