Allentown
72° F
Scattered Clouds
Scattered Clouds

Berks-based Penn National makes pitch for Pennsylvania's final stand-alone casino license

By 69 News & Associated Press, (follow: @69news), news@wfmz.com
Published On: Jan 28 2014 01:27:36 PM CST
PHILADELPHIA -

A hearing that will help determine who will receive the license to open Pennsylvania's fifth and final stand-alone casino got underway Tuesday with Berks County-based Penn National Gaming pitching its Hollywood Casino proposal.

The gambling giant wants to build a $480 million casino near the sports stadiums in south Philadelphia.

Gregory Fajt, a member of the Pennsylvania Gaming Control Board, questioned whether the project is distinctive enough, asking Penn National executives "what do you think will separate you from the myriad of other casinos within a 150-mile radius."

The company, headquartered in Wyomissing, responded that convenience is gamblers' No. 1 priority, pointing to the casino's location near Interstates 76 and 95 and saying it would draw gamblers from southern New Jersey.

But, like the other proposed casinos, Penn National would also take gamblers from SugarHouse and other Pennsylvania facilities.

Penn National projects that 60 percent of the casino's patrons would be new, with 40 percent cannibalized from existing casinos, Jay Snowden, the company's chief operating officer, told the board.

Board members also asked about Penn National's plan to split the project into development phases, questioning why the company wouldn't build it all at once.

"When I hear different phases for projects, I get a little skittish because we've been burned before," Fajt said.

Tim Wilmott, president and chief executive officer, replied the company does not want to overspend on a casino project, pointing to the troubled $2.4 billion Revel Casino Hotel in Atlantic City, N.J., which filed for bankruptcy less than a year after its April 2012 opening

"We don't want to end up like Revel, where it's overcapitalized in a market that can't support that level of investment," he said.

Wilmott acknowledged the project's second development phase, which contemplates a 500-room hotel, an event space and 1,000 additional slot machines, might never materialize if the market doesn't grow sufficiently.

Penn National owns or operates 19 casinos and 11 race tracks across the country, including the Hollywood Casino and Penn National Race Course in Grantville, Pa.

Pennsylvania regulators are also hearing from a developer who wants to convert the former home of The Philadelphia Inquirer and Daily News into the $700 million Provence casino.

Three other applicants will get their chance Wednesday and Thursday. The gambling board expects to make a decision within a few months.