The Philadelphia-area gambling market is set to get more competitive now that regulators voted Tuesday to award a license to Live! Hotel & Casino, a joint venture of two Eastern seaboard casino operators to be built in the city's stadium district.
Live! won a four-way competition for the last casino license in eastern Pennsylvania, and the fifth in the Philadelphia region. It will be owned and operated by the Cordish Cos. of Baltimore and Greenwood Gaming & Entertainment Inc., of Bensalem, Pennsylvania.
In a 172-page analysis released a few hours after the Pennsylvania Gaming Control Board's unanimous vote, members said they liked the "synergy" between a casino and 8 million sports and music enthusiasts who visit 400 events per year there. It presents an opportunity to market the complex as a year-round attraction, and best satisfies the state's goal of generating more tax revenue from two casinos in Philadelphia, the gaming board wrote.
A casino could take a couple years to build, even if the result is not challenged in court.
Bob Green, Greenwood's chairman, acknowledged fears from competitors that another casino would not draw new gamblers, but rather steal from the ones already there.
"There will be some cannibalization, but I think the market will expand generally," Green told reporters after the half-hour gaming board hearing at the Pennsylvania Convention Center in Philadelphia. "We believe that there is a significant untapped source of revenue" in south Philadelphia's stadium district.
If all goes well with permits from the city, crews could break ground within eight months and open the facility in 15 to 18 months, Green said.
The $400 million Live! Hotel & Casino is expected to house 2,000 slot machines and 125 table games in 200,000 square feet of space, along with an adjoining hotel with 240 rooms and 2,500 parking spaces. It will be built on a lot that currently houses a Holiday Inn just a few hundred feet north of Citizens Bank Park, home of the Philadelphia Phillies, and a few hundred feet south of Interstate 76. The Holiday Inn will be renovated and incorporated into the casino project. Just to the south of Citizens Bank Park is the XFinity Live! entertainment complex, developed by The Cordish Cos., as well as Lincoln Financial Field, home of the Philadelphia Eagles, and the Wells Fargo Center arena, where the Philadelphia Flyers play.
It was not the most expensive or glamorous project pitched to the gaming board. That was the $700 million French-themed Provence concept proposed by developer Bart Blatstein at the iconic former Philadelphia Inquirer and Daily News tower just north of downtown. But gaming board members saw Live! as the most financially stable and reliable revenue machine.
Live! will have to pay $75 million for the slot machine and table game licenses. Its owners expect $344 million in pre-tax revenue in the fifth year of operation.
The decision brought the two-year application process to a close and comes amid casino closings in Atlantic City, increasing competition on the Eastern seaboard and worries that a new casino will siphon gamblers from competitors that can scarcely afford to lose them.
Pennsylvania, which rocketed to the second-largest commercial casino market in 2012, is also feeling the effects of competition from other East Coast states. The state has opened 12 casinos since 2006 — including two, Sugarhouse and Harrah's Philadelphia, each within 12 miles of the stadium casino site — and there is a license for one more available.
But some analysts say the Philadelphia-area market is either saturated already or coming close, and wagering at slot machines, the bread and butter of Pennsylvania's casinos, has declined for two straight years. This fiscal year may make it three in a row. Meanwhile, in nearby Atlantic City, four of the city's 12 casinos have shuttered this year and a fifth, Trump Taj Mahal Casino Resort, says it will close next month.
The Cordish Cos. owns and operates the Maryland Live! Casino in Hanover, Maryland, while Greenwood operates Parx Casino and Racing, just north of Philadelphia in Bensalem.