PNG Chairman: Laws on Foreign Corruption a Roadblock to Growth
Oh, those pesky laws.
Peter Carlino, chairman of Penn National Gaming, the powerful casino company that owns a number of racetracks scattered throughout the United States, wants to expand beyond North America. But federal laws, specifically the 1977 American Foreign Corrupt Practices Act, are making it difficult.
Speaking to potential investors at the Baron Investment Conference in New York last week, according to CNBC.com, Carlino indicated Penn National was courting an Asian country for the purposes of expansion but was stymied by the federal law that makes it illegal to bribe foreign entities. Specifically, the CNBC report said, payoffs to border guards were a “line item” to help get things done.
“It seems OK to me, frankly,” CNBC.com quoted Carlino as saying. “If that's the game, we'll play it.”
That was the game American aerospace company Lockheed played in the 1960s and ‘70s, paying millions of dollars to government officials in Germany, Italy, Hong Kong and Saudi Arabia to get them to buy their airplanes. An investigation by the U.S. Securities and Exchange Commission determined hundreds of other companies had similar pay-to-play programs.
After that discovery, Congess passed the federal law requiring transparency in accounting and making it illegal to bribe foreign officials.
Penn National is a juggernaut in the U.S. gambling industry, thanks largely to Carlino's ability to see expansion opportunities and exploit them. Ten of the publicly traded company's 28 gambling properties are tied to pari-mutuel gambling licenses. Although it began as a racetrack company and its namesake, Penn National racecourse in Pennsylvania, has been around for decades, make no mistake: Penn National Gaming is a casino company. If it needs to build, buy or operate a racetrack in order to get a casino, it will do so.
As Carlino said, “If that's the game, we'll play it.”