PITTSBURGH -- The Penguins plan to fund their share of a new $278 million arena with expected revenue from a proposed horse racetrack and slot machine gaming facility in Harmar, WTAE's Paul Van Osdol reported Tuesday.

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Does Pittsburgh Need A New Arena?

Ted Arneault, president and CEO of MTR Gaming Group, which owns Mountaineer Race Track and Gaming Resort in Chester, W.Va., wants to build a $100 million track and casino called "Keystone Downs" near Route 28 and the Pennsylvania Turnpike.

The track would put $60 million -- or about 2 percent of expected annual slots profits -- toward a new "Igloo" to replace Mellon Arena. The Penguins would pay $47 million, which is what the Pirates put toward PNC Park.

The state would add $90 million, with $62 million coming from local taxpayers and $11 million from the federal government. The Pittsburgh Water and Sewer Authority and interest would make up the difference.

Slots are still illegal in Pennsylvania, but the Legislature is expected to vote this summer to legalize them at racetracks. Such a move has been publicly supported by Gov. Ed Rendell.

Keystone Downs must compete with six other developers who want the Pennsylvania State Horse Racing Commission's final track license. The other groups want tracks in Hays, Findlay, South Versailles, Beaver County and the Philadelphia area.

To complicate matters, the state recently awarded a license to a Mountaineer-controlled track in Erie. Arneault realizes that could be a problem, but he hopes the other groups seeking track licenses in Allegheny County will join him.

"By putting a group like that together, we have a much better chance of obtaining a license for the Pittsburgh area," Arneault said.

If that happens, Arneault said he can "ensure this arena will get built."

"We do, in fact, fill the gap for the Penguins from a private funding basis, and we can make all of this happen," he said.

Neither Allegheny County Chief Executive Jim Roddey nor Pittsburgh Mayor Tom Murphy commented on Tuesday's proposal. Both have recently said that the county and city don't have any money to help build an arena, and Murphy has gotten behind the Hays proposal, which is backed by Kentucky Derby operator Churchill Downs.

Former Gov. Tom Ridge said there would be state money available for an arena project, but Rendell has yet to commit to spending it.

Penguins owner Mario Lemieux, who did not attend a press conference to unveil the track-arena proposal Tuesday, has said the team could leave town if it does not get a new home.

"If they turn down Keystone Downs, then we have a $60 million gap in trying to solve a problem for this community," said Penguins president Ken Sawyer.