PITTSBURGH — The state auditor general wants to tie the license to operate a slots parlor in Pittsburgh with responsibility for fully funding a new arena for the Pittsburgh Penguins.

The Penguins have partnered with Isle of Capri Casinos Inc. on a $1 billion development plan that would include a new $290 million, 18,500-seat arena for the team. The Penguins have played in Mellon Arena — the oldest and smallest in the National Hockey League — since they began as an expansion team in 1967.

Isle of Capri has pledged to pay the full cost of the arena if it gets the casino license.

Auditor General Jack Wagner, a former state senator and Pittsburgh City Council president, wants other bidders to match that offer.

"The offer of a new arena should be required of every bidder for the Pittsburgh license," Wagner said Monday. "All we are doing is asking the casino owner, which will make hundreds of millions of dollars in profits in Pittsburgh over the next 30 years, to give something back to our community."

Applications for the state's 14 slot machine licenses must be postmarked by Wednesday. The city of Pittsburgh is guaranteed one license for a free-standing slot machine operation.

Several entities are vying for the Pittsburgh license, including Don Barden, a Detroit businessman said to be the nation's first black casino owner.

Penguins player/owner Mario Lemieux has warned he might move the team if it does not sign a new arena deal by the end of the 2006-2007 NHL season.

The city-county Sports and Exhibition Authority board voted last week to let the Penguins extend their Mellon Arena lease for just one year, through June 2008, instead of five years.

Meanwhile, one developer backed out of seeking the stand-alone slots gambling license in Pittsburgh.

Beaver County developer Charles J. Betters said in a statement Monday that his Pittsburgh Development Group will not apply for the license because it would not be in the city's best interest. He wants the slots gambling parlor license to go to the Penguins.

Betters' group, however, will continue to pursue a thoroughbred racing license for a 640-acre mixed-use project in the city, he said. If the group gets that license, it will then try to get a gambling license for that venue.