06/25/2003 11:00PM

Pa. slots bill passes

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The Pennsylvania Senate passed a bill on Wednesday night legalizing slot machines at racetracks in the state, but the bill faces an uncertain future in the House.

The bill, which is supported by Pennsylvania Gov. Ed Rendell and which passed in the Senate by a vote of 27-22, would allow racetracks to operate 3,000 machines each initially. The tracks would be required to pay a $50 million upfront licensing fee, but would then be allowed to retain 46 percent of the revenue from the machines.

Supporters of the legislation say the machines will generate more than $800 million a year for the state budget and will revitalize racing in the state. Rendell has championed the bill as a way to reduce property taxes while increasing the amount of money awarded to schools.

The prospect of slot-machine gambling at Pennsylvania racetracks has set off a fierce competition for the state's two remaining track licenses. Currently, eight companies have filed applications for the licenses, which are expected to be awarded later this year.

Pennsylvania currently has two Thoroughbred tracks, Philadelphia Park and Penn National, and two harness tracks, the Meadows, owned by Magna Entertainment Corp., and the Downs at Pocono.

Pennsylvania regulators earlier this year approved licenses for two other tracks, one in Chester near Philadelphia and the other in Erie, a town in northwestern Pennsylvania near the border with Ohio.

Lawmakers in the House are expected to add provisions to the Senate bill that would expand gambling to land-based casinos and riverboats, as well as authorize additional locations for slot machines. Senate lawmakers have said they would oppose any legislation that expands gambling beyond tracks, and many House members are also opposed to a dramatic expansion of gambling in the state.

The bill that passed the Senate on Wednesday bans political contributions by racetracks owners, and it prohibits elected officials from owning more than 2 percent of any racetrack. The bill also states that if a racetrack with slot machines is sold, the new owners would be required to put up $50 million for a new license.

Also on Wednesday, legislators in Ohio set aside a plan to put a referendum on the ballot to legalize slot machines at tracks in favor of raising sales taxes.