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The Pittsburgh Penguins are off the market, and owner Mario Lemieux says the team will look at relocating while it attempts to reach a deal for a new arena.

"It is time to take control of our own destiny," Hall of Famer Lemieux said in a statement issued by his team Thursday.

The Penguins are free to move when the 2006-07 season ends following a state panel's rejection Wednesday of a casino company's offer to build the team a new arena for free.

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Lemieux said talks will begin shortly with state and local leaders about a new arena, but added a move outside Pennsylvania is another option.

"Accordingly, starting today, the team is off the market," Lemieux said, "and we will begin to explore relocation offers in cities outside Pennsylvania."

Among the cities known to be interested in the Penguins are Kansas City, Mo.; Houston; Portland, Ore.; and Winnipeg, Manitoba.

The Penguins, who have sought a new arena since Lemieux's group brought the team out of bankruptcy in 1999, have had two major setbacks in the last week.

Last Friday, Canadian businessman Jim Balsillie stunned the Penguins and the NHL by pulling out of an estimated $175 million agreement to buy the team. Balsillie was expected to close on the deal last week, only to back out after the NHL insisted he agree contractually to not move the team.

On Wednesday, a Pennsylvania gaming panel awarded the single license to build a slots machine parlor in Pittsburgh to Detroit-based gambling company owner Don Barden rather than a Penguins-supported gaming concern. Isle of Capri Casinos promised to build a $290 million arena for the Penguins next door to its casino if it was granted the slots parlor license.

While Isle of Capri could appeal the gaming board's decision, overturning the award could prove difficult because of language built into the state gaming law designed to prevent lengthy delays once the licenses were awarded.

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Within an hour of the slots announcement, state, county and city leaders rushed to assuage the Penguins, promising to start talks immediately on a so-called Plan B agreement to build the arena. A site has already been secured, and the Barden group has pledged $7.5 million a year for 30 years to help fund the arena. The state also would kick in $7 million.

Allegheny County Chief Executive Dan Onorato and Pittsburgh Mayor Luke Ravenstahl said they were ready to negotiate an arena deal immediately and were certain an agreement could be reached. Both said Thursday they were disappointed the Penguins have not yet moved to meet with them.

Maybe that's because the Penguins would have to contribute money to the Plan B deal - something they weren't required to do by Isle of Capri.

Lemieux, exasperated the Penguins still don't have a replacement for 45-year-old Mellon Arena, warned Monday that there would be considerable uncertainty if Plan B became the only option. But, until now, he has not actively sought offers from other cities.

"I'm not sure about Plan B," Lemieux said. "Plan B, in my opinion, is going to use taxpayers' money. I've never heard of a government turning down $290 million in private money to build a public facility. It's unheard of. At this point, frankly, I'm really not sure of what's going to come of it."

While the Penguins were discouraged by the Isle of Capri's failure to obtain the slots license, they are now in position to negotiate a more favorable arena agreement.

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Lemieux can use relocation as a powerful bargaining chip, and thus apply even more pressure on government officials to reach a deal quickly. Privately, Lemieux group executives have said the team would relocate only if it became certain there would be no new arena.

NHL commissioner Gary Bettman met recently in Pittsburgh with Onorato and Ravenstahl, presumably to discuss how Plan B would work if the Isle of Capri wasn't chosen. Onorato and Ravenstahl also called Bettman following the gaming board decision.

Despite the Penguins' long-standing arena issues, Pittsburgh remains one of the NHL's strongest U.S. markets. The Penguins, who have no NBA team in town to draw away attention and fans, played to 92 percent of arena capacity last season, despite a fourth consecutive last-place finish.

Ticket sales are strong for the rest of this season. TV ratings also are among the highest of any U.S. city.

Bettman's desire to keep the Penguins in Pittsburgh is one reason he wouldn't allow the sale to go through without strong contract language that prevented Balsillie from moving the team.

Pittsburgh's other two major sports teams, the Steelers and Pirates, also gained their new stadiums in 2001 following similar Plan B negotiations with political leaders. The original plan to fund the stadiums through a county sales tax hike was overwhelmingly rejected by voters.

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