After four interminable years, that on-again/off-again casino project on the Philadelphia waterfront has been put out of its misery. Comcast‘s Ed Snider, his fellow juiced-in investors and putative savior Caesars Entertainment had the rug yanked from beneath them in a 6-1 vote by the Pennsylvania Gaming Control Board, which stripped the gaming license from the “Penn’s Landing” casino — now Horseshoe Philadelphia — which was originally to have been run by Foxwoods Resort Casino. After a soap opera’s worth of financial, political and regulatory problems, the PGCB had enough, sending $182 million in startup capital swirling down the drain.
Snider’s loss is not necessarily anyone else’s gain, since he and Caesars could litigate the matter for years on end. Accordingly, the PGCB has put a “freeze” on the license for the time being. (This form of playing “keep away” probably suits Caesars CEO Gary Loveman just fine, having lent $67 million in seed money to the Penn’s Landing consortium.) Political pressure has been mounting for some time to move the license elsewhere in the state and yesterday’s edict will ratchet that tension even higher.
In addition to $25 million in earnest money, Caesars was expected to borrow $200 million more. Although the company’s bargain-tier Horseshoe brand was the only one not already deployed in the Baltimore-Atlantic City corridor, the downmarket image can hardly have placated already-vexed regulators. (Recall that Steve Wynn thought better of an off-brand “SW” casino when Philadelphians proved cool to the idea.) Downsizing of the slot-machine quotient by 50% and an even more drastic reduction of the parking garage were cognizant of the economic riskiness of a half-billion-dollar casino (and of the need to not outshine other Caesars properties in Atlantic City) but didn’t play with state officials. A pushed-up grind joint wasn’t what they had in mind.
But the biggest sticking point was Snider et. al.‘s severe reduction of the amount of profit participation they intended to channel to nonprofits. The only hard-and-fast donation was for a Mashantucket Pequot museum in Connecticut (!) — a parting gift to Foxwoods that understandably stuck in Keystone State craws. Ironically, it was the original size of the charitable set-aside (42% of total profits) that was the deal-breaker for Wynn, who’d have equally understandable difficulty selling his shareholders on the notion.
Although Loveman may need to have his head examined for attempting to further erode his company’s overexposed position in Atlantic City, Caesars might be the only completely blameless party in this mess. Mayor Michael Nutter wasted over a year flip-flopping on the planned site and supporting a wild goose chase for a new location. Regulators should have shut that farce sooner than they did and the Foxwoods/Snider bunch made an art form of missing deadlines. Also, the awarding of a license to a group of Gov. Ed Rendell‘s most prominent supporters stank of cronyism. The Philadelphia Inquirer‘s editorial board continually poured kerosene on a tense situation, hauling out its stock of Victorian anti-gambling clichés when Foxwoods Philly finally bit the dust.
The oft-criticized PGCB got this one right. Snider’s gang of nincompoops had been indulged long enough. It’ll be borderline tragic, though, if they use the court system to deprive other Pennsylvania cities of the economic opportunity which Snider’s crew had dropped in its well-connected lap — and proceeded to bungle spectacularly.
Finally … something good emerges from the Station Casinos bankruptcy, the industry’s feel-bad story of 2010. S&G congratulates the Boys & Girls Clubs of Las Vegas on its prospective windfall and applauds the charitable spirit that makes it possible.
