Penn National Gaming Withdraws Plan to Build $480 Million Philadelphia Casino
Penn National Gaming Inc. has decided to withdraw its bid to build a $480 million casino in Philadelphia. The decision leaves four potential licensees for the casino process in South Philadelphia.
As the name implies, Penn National Gaming is a Pennsylvania-based gaming company. This makes the announcement a particular disappointment, but the company’s familiarity with the local political arena might have played a role in their decision to withdraw their bid. It appears they saw the handwriting on the wall about the location the city officials prefer–and it was not the location Penn National preferred.
Timothy Wilmott’s Statement
Penn National CEO Timothy Wilmott said in a press release that Philadelphia city official wanted a downtown casino, which is one of the reasons the company decided to pull out of the process. Another reason for the pullout was the crowd gaming market in the Philly market. The southeast Pennsylvania region has four casinos already. New York is planning on building four more casinos, while New Jersey’s politicians have discussed building a casino in northern New Jersey after 2016.
Wilmott said conditions have changed since the company first filed its application. The statement continued, “The market potential in Philadelphia is less today. as a result of the ongoing gaming saturation in the mid-Atlantic region, as well as continued softness in the economy.”
Penn National Gaming Plan
The plan Penn National had proposed was much different than the standard casino development. A Hollywood Casino would have been built in the vicinity of the south Philadelphia sports stadius. A nonprofit corporation would have had ownership of two-thirds of the casino. The nonprofit would have distributed gaming revenues to area schools and city pensions.
Of the remaining applicants, two still call for a development in the south Philadelphia area. The other two want to build a casino in the downtown area of the city. Earlier this month, minority investors in the area other casino operation, SugarHouse, filed a suit calling for the second license process to end. The SugarHouse owners say the market is saturated and a new casino would cannibalize the customer base of SugarHouse. A court tossed out the lawsuit in June 2014.
SugarHouse Casino – Area Gaming Venues
SugarHouse Casino in found at 1001 North Delaware Avenue in Philadelphia. The property includes 54 table games and 1,600 gaming machines on its gaming floor. The Philadelphia area is also home to the Valley Force Casino Resort in King of Prussia, the Sands Casino Resort in Bethlehem, and the Harrah’s Philadelphia Horse Track in Philadelphia. While Harrah’s is a racetrack, it has a gaming space with 2,800 gaming machines and 155 table games, including poker tables.
Penn National Gaming
Penn National Gaming Incorporated is based out of Wyomissing, Pennsylvania. The company has been in operation since 1972 and has an operating income of $500 million. The company owns 26 gaming facilities in 18 different U.S. states and will soon add the Plainridge facility in Massachusetts. Penn National also operates on Canadian casino.
Penn National Properties
Penn National owns casinos in Tunica, Mississippi; Shreveport, Louisiana; Aurora, Illinois; Henderson, Nevada; and 10 other U.S. cities. Nine of these casinos share the brand name “Hollywood Casino”, while 3 others fall under the “Argosy” brand. The Henderson casino is M Resort. Penn National also manages (but does not own) Casino Rama in Rama, Ontario, Canada.
Penn National also owns 6 race tracks and 7 combination race tracks/casinos (so-called “racinos”). The racinos are found in Maine, West Virginia, Pennsylvania, Florida, and New Mexico. The final two are still under construction: the Dayton Raceway in Ohio and the Mahoning Valley Race Course in Austintown, Ohio.
The traditonal racing venues are found in Ohio (2), Texas (2), Maryland, and New Jersey. The two Texas raceways are Sam Houston Race Park in Houston and Valley Race Park in Harlingen, though Penn National only owns 50% of the stake in these locations. The New Jersey racecourse is Freehold Raceway in Freehold Borough. Penn owns 50% stake in this raceway, too.
Penn National bought Hollywood Casino Corp in 2003 and Argosy Gaming Company in 2005. In 2006, the company unsuccessfully tried to acquire Harrah’s Entertainment (now “Caesars Entertainment”). Harrah’s was eventually taken over by two private equity firms, which were saddled with $30 billion in debt to buy America’s largest gaming company. These days, Caesars Entertainment’s debt is down to $23 billion, but many analysts believe the company eventually may have to file for bankruptcy.