SugarHouse opposes any second casino license

In addition to citing increased competition, SugarHouse Casino raised questions about the eligibility of certain applicants for the city's second license.
In addition to citing increased competition, SugarHouse Casino raised questions about the eligibility of certain applicants for the city's second license. (TOM GRALISH / Staff Photographer)
Posted: December 18, 2013

The owners of SugarHouse Casino have formally objected to the issuance of a second casino license in Philadelphia, arguing that the region's gambling market will be tapped out after their planned $155 million expansion.

In documents filed Friday with the Pennsylvania Gaming Control Board, SugarHouse's owners also raised questions about the eligibility of certain applicants for the license.

If granted, the petition to intervene would allow SugarHouse, which employs 1,500 full- and part-time workers, to make its case during licensing hearings scheduled to start Jan. 28.

SugarHouse's preliminary statement, filed by Atlantic City lawyer John M. Donnelly, painted a bleak future for the gambling industry if a second Philadelphia casino opened.

It would mean thousands more slot machines would serve a static pool of gamblers. "Revenues will be split, resources will be strained, capital improvements will be postponed, and employees will lose their jobs as casinos cut costs," the filing said.

To support the argument that another casino in the Philadelphia market would hurt existing operations, SugarHouse cited data from Cincinnati, where Horseshoe Casino opened in March, joining three already there.

Total gambling revenue for the Cincinnati market climbed 8.1 percent in the eight months after Horseshoe opened compared with the same period the year before, but revenue for the casinos in the market before Horseshoe fell 27.7 percent, SugarHouse said.

A second front in the SugarHouse petition is a challenge to the eligibility of certain applicants. The petition questioned whether Penn National Gaming Inc., which is involved in Hollywood Casino Philadelphia, and Greenwood Gaming & Entertainment Inc., a partner in the Live! Hotel & Casino, are ineligible because they own racetrack casinos.

Parx owner Greenwood Gaming declined to comment.

A Penn National spokesman said the company was "confident in our proposal and that the ownership structure put forth satisfies the statutes."

Pennsylvania law restricts ownership to, in the simplest terms, one casino and a third of another. SugarHouse also said it wants to explore whether applicants are in overall compliance with that rule.

Several of the current applicants for the second city casino license already own part or all of a casino. They include Penn National, Greenwood Gaming, and Ira Lubert, a partner in Valley Forge Casino, Rivers Casino, and the proposed Market8.

Separately from Friday's SugarHouse action, minority investors in SugarHouse have challenged the gaming board's authority to reissue a second license in the city.

Those investors also had sued SugarHouse's majority owner to block the SugarHouse expansion.


hbrubaker@phillynews.com

215-854-4651

@InqBrubaker

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