As expected, the Pennsylvania Gaming Control Board gave the last Philadelphia casino license to a partnership of Cordish Gaming and Greenwood Gaming. The flashy Live! Hotel & Casino will nestle in the stadium area in the south part of
town. “We’re right off I-95 and I-76, so you can expand your reach and pull from two neighboring states and the region,” said David Cordish. He added, of his plans, “I think the secret to casinos is what you do besides the gaming, because everybody games the same way. The best thing you can do with gaming is surround it with other amenities.”
The three losing bidders have a month to appeal the decision to the state Supreme Court. However, the PGCB’s choices haven’t been overturned once, so that’s probably a wasted effort. Appelants would have to show that regulators were misled or that there was a “capricious disregard” of pertinent evidence. The “prudent man” standard could be invoked, but it would probably help no rival project: It requires that the project be shown to be economically sensible and thus is more likely to be invoked by SugarHouse (pictured) or Harrah’s Philadelphia, which want no new casino.
Talk immediately turned to the market impact of Live! Moody’s Investor Service analyst Keith Foley told the New York Times, “Another casino folding in Atlantic City doesn’t necessarily make room for another casino in Pennsylvania. This region is already in an oversupply situation. There’s a risk that the existing casinos will suffer or the new casinos will suffer.” Slot revenues in the Philadelphia area have declined for two years.
What’s more, New York State could approve four new casinos as soon as Friday, adding to its tally of 14 racinos and tribal casinos. Pennsylvania still has one license that remains unawarded. Perhaps thinking of the steep tax rate in Pennsylvania, Boston College professor of economics Richard McGowan said, “The states are going to make some extra money, but the casinos are going to be working on incredibly small profit margins. There’s going to have to be some consolidation in this industry.”
Since Parx Casino will be just 18 miles from Live!, owner Greenwood Gaming risks cannibalizing itself. All the more reason for Greenwood executives to hope they can book many more months like the last one, before Live! opens. Its table games revenue shot up 21%, while SugarHouse had an 11% uptick. These gains came at the expense of Valley Forge Casino Resort (-22%) and Harrah’s (-19%).
* Onetime Philly aspirant Foxwoods Resort Casino and competitor Mohegan Sun continue to lose slot business to neighboring states. Total slot handle was nearly $1.1 billion but, in revenue terms, Foxwoods was off 5% and Mohegan Sun down a tiny fraction of a percentage point.
