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Five Companies Vying for Two Casino Licenses in Philadelphia
. Foxwoods,  Pinnacle, Donald J. Trump, Planet Hollywood,
 and Sugar House Gaming 
By Suzette Parmley, The Philadelphia Inquirer, The Philadelphia Inquirer
Knight Ridder/Tribune Business News

Dec. 29, 2005--Two major gambling companies announced plans for Philadelphia casinos on the last day prospective slots parlor operators could file license applications, heating up the competition for the two city sites.

The owner of Foxwoods Resort Casino in Mashantucket, Conn., and Pinnacle Entertainment Inc., of Las Vegas, both submitted applications to the Pennsylvania Gaming Control Board yesterday, along with two dozen other companies, who raced to meet the state-imposed deadline of midnight.

The latest entrants bring the total to five applicants for a casino project in Philadelphia. Foxwoods and Pinnacle will vie with Donald J. Trump, Planet Hollywood, and Chicago-based Sugar House Gaming to win the right to operate slots in the city.

Brian McGill, a gambling analyst with Susquehanna Financial Group, said the 11th-hour proposals by Foxwoods and Pinnacle, both successful casino operators, would make Trump's push more difficult.

"While Trump appeared to have an excellent chance in a small field, the company now finds itself facing formidable competitors for a license," McGill said.

Across Pennsylvania yesterday, those businesspeople willing to pledge to pay a $50 million license fee in hopes of landing a license to operate a slots parlor seemed to be scrambling to get huge amounts of paper to Harrisburg. Some trucked boxes of application forms and supporting materials to the state Gaming Control Board. Others, such as the team behind what is now called TrumpStreet Casino & Entertainment Complex, loaded up a bus with paperwork, partners and supporters from the community.

Applicants needed to at least have a postmark before midnight last night to comply with state law. Nick Hays, a spokesman for the gaming agency, said it would be days before all of the prospective slots operators are known.

The Mashantucket Pequot Tribal Nation, which controls Foxwoods Development Co. L.L.C., the commercial gambling affiliate, announced its partnership with a group of local investors to develop a $350 million casino on the Delaware River waterfront.

They include Comcast Spectacor chairman Ed Snider; the daughter of Lewis Katz, a partner in the New Jersey Nets; and real estate developer Ronald Rubin's family. They make up the principal backers of Washington Philadelphia Investors L.P., which would own 70 percent of the casino, with Foxwoods owning 30 percent. Other investors include music producer Quincy Jones, Philadelphia 76ers president and general manager Billy King, and former Phillies' centerfielder Garry Maddox.

About 42 percent of the casino's profit would go to charity, said Maureen Garrity, spokeswoman for Philadelphia Entertainment & Development Partners, which is developing the Foxwoods casino.

The casino would occupy a 16-acre parcel between Reed and Tasker Streets formerly owned by Harrah's Entertainment Inc., which dropped its plans there after its acquisition of Caesars Entertainment Inc. last summer.

Pinnacle Entertainment said it wanted to build a casino on land formerly optioned by Ameristar Casinos Inc., before that company dropped its plans for a casino on Nov. 3. Pinnacle said the casino would cost between $250 million and $400 million. It would open with 3,000 slot machines, multiple bars and restaurants, a multiplex movie theater and/or performance venue.

Wade Hundley, president of Pinnacle Entertainment, said after Ameristar pulled out, Pinnacle executives were en route to Philadelphia within days to check out the location in Fishtown.

"We came and looked at the site," Hundley said yesterday. "It made a lot of sense. It's a great location with very good access, and you're able to draw from both Pennsylvania and New Jersey."

Unlike the other four applicants for city slots parlors, Pinnacle does not plan on having any partners in the project, Hundley said.

Pinnacle owns riverboat casinos in Louisiana and Indiana, with one being rebuilt in Biloxi, Miss., and land-based casinos in Reno, Nev. It has three casinos in Argentina, and others under development in St. Louis and the Bahamas.

Yesterday, the road to riches for slots operators was paved with paper rather than gold.

Sugar House Gaming, a Chicago gambling company that wants to build a $450 million casino on the Delaware River waterfront, trucked in 27 boxes weighing 1,350 pounds.

Not to be outdone, Trump Entertainment Resorts Inc. hauled four huge trunks and 28 boxes weighing 1,575 pounds. Inside them were detailed renderings and neatly bound documents of its proposed $350 million casino on the site of the former Budd Co. factory in the Nicetown neighborhood.

Even before the engine had turned off in Harrisburg, the doors to the bus opened, and out jumped Pat Croce, one of the investors in TrumpStreet.

Croce spread his arms and proclaimed: "Philly is in the house!"

After unloading one of the trunks and a dozen boxes at the gaming control board's office, Croce, the former 76ers president, was more subdued.

"I think my back still hurts," Croce said after he reboarded the bus. "One of the trunks was really heavy. I think it had Donald's wallet in it."

The state Gaming Control Board is expected to award all 14 licenses in December 2006, while racetracks may receive conditional licenses to operate slot machines in late summer.

All are taking the ultimate gamble and competing for the chance to operate a slots parlor in the second-largest gambling market to open since California legalized it in 2000.

"They are salivating at where to reinvest, and they have a lot of capital," Barbara Cappaert at KDP Investment Advisors, a high-yield debt research firm based in Montpelier, Vt., said. "Every state that has opened up to gaming, it's been a big windfall for state legislatures to help shore up their budgets."

The absence of proposals by MGM Mirage and Steve Wynn in Pennsylvania opened the way for relatively unknown companies, like Sugar House Gaming controlled by billionaire Neil G. Bluhm, to apply.

The projects range in size and made for a few unusual alliances of former rivals.

While the Philadelphia area is home to the most proposed casinos, there are five or six projects battling for the Pittsburgh license. Gambling operations proposed for outside Pittsburgh and Philadelphia will be competing for just two licenses for stand-alone slots parlors, or the two more restrictive resort gambling licenses.

For some applicants, Pennsylvania offers a way to protect their investment in Atlantic City, like Phoenix-based Aztar Corp. and Boyd Gaming Corp., of Las Vegas. Both companies own casinos there.

One applicant that beat the rush was the Mohegan Tribal Gaming Authority, which is among the seven racetrack owners eager to add slots. It was the first to file an application when it did so on Dec. 8. Wyomissing-based Penn National Gaming Inc., which is set to open a $212 million Hollywood-themed racino, a racetrack with slots, in Grantville, Pa., filed last Thursday.

Known for opulent gambling palaces in Las Vegas, Wynn had his reasons for staying out of Pennsylvania. The tax rate of 54 percent levied by Pennsylvania versus 9.25 percent in Atlantic City was a big one.

"If Pennsylvania decided to give the tourist industry in the state a shot in the arm to build nice destination resorts, I would love to be in Pennsylvania," Wynn said. "But right now, it's not where someone can justify a large investment. It's pretty tough to do with a 54 percent tax rate."

Ameristar, which originally wanted to build a $450 million casino-entertainment complex along the waterfront in Fishtown, pulled out in early November, also citing the high tax rate.

Still the lure of big profits from slot machine gambling did draw proposals from about two dozen groups. Sugar House Gaming president Greg Carlin flew in late Sunday night -- on Christmas -- from Chicago and worked up through yesterday's deadline with his development team. They juggled three sites before closing a deal for the site of the former Jack Frost sugar refinery.

"The last few days have been hectic," Carlin said.

Western Pa. Slots

The following projects in the western half of Pennsylvania have been pushed by their developers as possible locations for slot machines.


The Meadows, Washington County.

Presque Isle Downs, Erie.

Valley Views Downs*, Beaver County.

Bedford Downs*, Lawrence County.

*Both companies are appealing racing application denials by the Pennsylvania Harness Racing Commission.

Slots parlors (developers)

North Shore site, Pittsburgh, (MTR Gaming Group Inc.)

PNC Park area, Pittsburgh (Merrill Stabile).

Penguins hockey arena, Pittsburgh (Isle of Capri Casinos Inc./Lemieux Group L.P.)

Station Square, Pittsburgh (Harrah's Entertainment Inc./Forest City Enterprises Inc.)

Majestic Star, Pittsburgh (Don Barden).

Nemocolin Woodlands Resort, Fayette County (Maggie Hardy Magerko).

SOURCES: Listed companies

Staff writer Angela Couloumbis contributed to this article. Contact staff writer Suzette Parmley at 215-854-2594 or


Copyright (c) 2005, The Philadelphia Inquirer

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