The local investors are expected to file an appeal in court but will have to go it alone. An attorney for Caesars, which already runs Harrah's in Chester, said after the vote that his company has no role to play going forward.
Caesars would have become a one-third owner of the casino, previously called "Foxwoods," and would have managed it under its "Horseshoe" brand.
The board's staff in March said such a ruling as yesterday's would mean it would take at least four years for a second casino to open in Philadelphia - including anticipated legal challenges, rebidding and new-applicant approval, as well as the construction of a new casino project.
The revocation is a stunning political blow to Gov. Rendell in his final month in office. Rendell, who is close with the project's local investors, ran for office on casino gambling as a way to raise money for the state.
Rendell, through a spokesman, yesterday said he "doesn't know enough about the facts of the decision to comment, but obviously the process worked."
The vote was 6-1 with just board member Jim Ginty, appointed by Rendell in July to a second three-year term, pushing to give the casino investors more time. Ginty said he was worried about the loss of 650 construction jobs and 1,200 casino jobs, along with delays in local gaming taxes for the city and school district.
Ginty warned that the state General Assembly might grow frustrated and pass legislation to move the casino license out of the city.
Mayor Nutter yesterday said lack of a second casino - the first, SugarHouse, opened in Fishtown in September - would affect the city's five-year financial plan.
Nutter, who helped push the local investors into a failed attempt to relocate the casino to Center City, said the city is not to blame for the project's fatal delays.
"The economy, the recession clearly had a big impact, and I think there were some internal issues," Nutter said. "This matter a long time ago moved way away from the city."
Fred Jacoby, an attorney for the local investors, called the vote arbitrary and unreasonable, and said the investors want a refund for the $50 million fee they paid for the casino license.
Doug Sherman, chief counsel for the board, said the state gaming law has no provision for a refund and the board has no authority to issue one to the investors.
The board, long frustrated by delays in the project, last month set a deadline of last Friday for a signed, finalized deal on what the investors would build, how they would pay for it, who would own it and who would manage it.
Cyrus Pitre, head of the board's Office of Enforcement Counsel, yesterday said the investors submitted letters from two banks that said they were confident but not yet committed in funding $200 million for the $275 million first phase of construction. Pitre said the submitted ownership information had blank spaces and other areas in which information was promised later.
For the other $75 million, $21 million was pledged by Comcast-Spectacor chairman Ed Snider and a charitable trust set up by the daughter of New Jersey Nets owner Lewis Katz.
Real-estate developer Ron Rubin, who in the initial plan had been a partner through a charitable trust, had not volunteered to help fund the Caesars deal, Jacoby said.
Caesars contributed $25 million, and the local investors hoped to raise raise the remaining $29 million. Caesars agreed to provide a $10 million bridge loan if the local partners could raise at least $19 million.
Pitre said the documents showed the deal might not close until as late as May 2011.
The board was clearly unhappy with changes made to an original pledge of 42 percent of the casino profits going to local charities for children, an anticipated $300 million over 10 years.
The new plan would taken sent some of that money, $6 million over seven years, to the Pequot Museum in Connecticut.
The Mashantucket Pequot Tribal Nation, which runs two casinos under the Foxwoods brand in that state, was originally a major partner and planned to manage the casino. The tribe, after serious financial troubles, was now little more than a passive investor.
"I guess there's charity and then there's charity," Jacoby said after the board questioned sending the money to Connecticut. "I hadn't realized that until today."
A small group of Casino-Free Philadelphia members cheered yesterday's decision, but anticipated another casino operator would seek the license.
Casino developer Steve Wynn, who briefly partnered with the local investors, said he would seek the license if it was revoked.
Trump Entertainment Resorts has a federal lawsuit pending against the board, claiming it should be given the license.
"We keep fighting," said Lily Cavanaugh, spokeswoman for Casino Free.
Staff writer Catherine Lucey contributed to this report.