Pennsylvania gaming regulators revoked the license for a proposed Philadelphia casino Thursday that would have been a potentially powerful competitor for the slumping Atlantic City market.
Ironically, Atlantic City's largest casino operator, Caesars Entertainment Corp., had stepped in to try to rescue the long-stalled Foxwoods casino project, but the deal did not come together fast enough for the Pennsylvania Gaming Control Board.
In a 6-1 vote, the board denied the latest request by Foxwoods developers to push back the deadline for opening the casino from May 2012 to December 2012. Caesars had joined with the Foxwoods group in recent weeks in an effort to finance and develop the project after previous plans collapsed, including brief talks with Las Vegas gaming mogul Steve Wynn to take over the casino.
The developers failed to prove they had the financing to build the $275 million project, which would have operated under Caesars' Horseshoe brand. The gaming board insisted that the Foxwoods group submit a financing plan and other key documents in time for its meeting Thursday in Harrisburg, Pa. Gaming officials said the paperwork that was filed in recent days was incomplete and vague.
This was the first time the board revoked a $50 million gaming license in Pennsylvania's four-year history of casino gambling. Pennsylvania has been a formidable competitor for Atlantic City, costing the resort billions of dollars in gaming revenue in a battle for customers.
There are 10 casinos operating in Pennsylvania, including the newly opened SugarHouse gaming hall in Philadelphia. Foxwoods' demise means that Atlantic City will not have to deal with a second Philadelphia competitor anytime soon.
"It's temporarily good news for Atlantic City," said Harvey Perkins, executive vice president of Spectrum Gaming Group, a New Jersey-based casino consulting firm. "It's one less near-term supply addition."
Don Marrandino, president of the four Atlantic City casinos owned by Caesars Entertainment, declined to comment on the gaming board's action. Caesars' corporate office in Las Vegas also declined comment.
The Foxwoods group has the option of appealing the board's ruling. The license is restricted to a casino in Philadelphia. Barring an appeal, the license will be put up for new bidding by potential casino developers.
Perkins speculated other Atlantic City casino operators may make a bid in hopes of securing a foothold in the Pennsylvania market. He noted Caesars Entertainment, formerly known as Harrah's Entertainment Inc., already has a presence in both markets as operator of Bally's Atlantic City, Caesars Atlantic City, Harrah's Resort and Showboat Casino-Hotel in Atlantic City, as well as the Harrah's Chester Casino and Racetrack in Chester, Pa.
"It's perhaps a viable option for an operator in the Atlantic City market," Perkins said. "Pennsylvania is playing out to be a lucrative growth market. Beyond the Atlantic City operators, it also opens up the regional competitive landscape because it makes a prime piece of real estate available."
Trump Entertainment Resorts Inc., owner of three Atlantic City casinos, was among the competitors that lost out to Foxwoods in the first round of bidding for the license four years ago. Trump is still fighting for that license in an ongoing lawsuit. Bob Griffin, Trump's chief executive officer, declined to say whether the company would consider making a new bid now that Foxwoods has lost the license.
"We're not going to make our plans known publicly," Griffin said. "I have seen Foxwoods say they intend to take this to court. We're going to see how that plays out in court."
The group that originally won the license included the Indian tribe that owns the Foxwoods casino in Connecticut and charities of three wealthy and politically powerful businessmen, Ed Snider, Lewis Katz and Ron Rubin. Snider is the owner of the Philadelphia Flyers and 76ers professional sports franchises.
Developers hoped to build the Foxwoods casino in South Philadelphia at Columbus Boulevard and Reed Street on land overlooking the Delaware River waterfront, but were plagued by delays. The Foxwoods site is four miles south of the SugarHouse casino, which also fronts the Delaware River.
Casino-Free Philadelphia, an anti-gambling community organization that tried to block SugarHouse from opening, vowed to oppose plans for a second gaming hall in the city.
"We'll continue to fight against a casino anywhere in the city," the organization said in a statement after the gaming board's vote. "Our objective now is to prevent the casino rebidding process from taking place."
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