House OKs auction for casino license

HARRISBURG — The state House of Representatives has approved a bill to hold a statewide auction to finally award the license that was yanked from the Foxwoods Casino project in South Philadelphia, but the measure is likely to hit a legislative brick wall once it lands in the Senate.

On Wednesday, the House voted, 140-48 to open up the auction for the coveted license for a casino anywhere in the state, with bidding starting at $65 million. The state Gaming Control Board would have the ultimate say over where, and to whom, the new casino should go.

If the bill were to continue gaining legislative traction, it could result in Philadelphia losing its right to a second casino under the state gaming law passed in 2004.

But, for the moment, that is a big "if."

A top Republican in the Senate — the one who controls the flow of legislation to the floor, no less — is skeptical not just of whether there is enough consumer demand for another casino in Philadelphia, but whether all signs are pointing toward a saturated market for gambling statewide.

"We have to take a long-term look at the industry and its return to the state treasury," Senate Majority Leader Dominic Pileggi (R., Delaware) said this week. "I think there is still an open question whether the commonwealth will benefit."

Asked if he believed the bill would be brought to a floor vote between now and when the legislature breaks for the summer, Pileggi would only say: "It's too soon to tell."

Sen. Vincent Hughes (D., Phila.) opposes the House bill but for a different reason: He is angry at what he believes is a thinly veiled attempt to circumvent the original intent of the gaming law, which required two casino licenses be granted to Philadelphia.

"They need to stop all the foolishness, and they need to start that process of putting that license in Philadelphia," said Hughes, the ranking Democrat on the Senate Appropriations Committee. "The law requires it. I don't know why people feel like they can ignore the law."

Hughes said that of any area in the state, Philadelphia is best positioned to host a successful gaming parlor that would keep sending much-needed revenue to the state to help lessen the sting of property tax bills. The law directs a portion of slot-machine proceeds to property-tax relief statewide and to wage-tax relief in the city of Philadelphia. Money also is supposed to go to economic development and tourism projects, among other uses.

"Stop getting in the way of extra property-tax relief for homeowners across the commonwealth," said Hughes, arguing for keeping the license in the city. "Stop being a boil on the butt of progress."

Mayor Nutter has said the city and its cash-starved School District stand to lose millions of dollars if the license goes elsewhere. For the next fiscal year, for instance, the state has said there will be $782.5 million available for property-tax relief, with approximately $89 million going to Philadelphia for wage-tax relief, according to Hughes.

The Foxwoods group first won the license in 2006 to build a casino on the Delaware River but was set back by political and neighborhood opposition as well as financial problems. In late 2010, state gaming regulators, running out of patience, stripped the group of its license.

Foxwoods investors — including a family trust connected to Lewis Katz, one of the new owners of the parent firm of The Inquirer — unsuccessfully appealed the action in Commonwealth Court.

As it stands, at least three developers have expressed interest in building a casino in Philadelphia.

One of them, Bart Blatstein, has said he wants to open a casino and entertainment complex at the Inquirer and Daily News Building at 400 N. Broad St.

"Nothing has changed the fact that the most significant revenue benefit for Pennsylvania, both immediate and long-term, will come from locating the remaining license in Philadelphia," said Mark Nevins, spokesman for Blatstein's project.

Contact Angela Couloumbis at 717-787-5934 or acouloumbis@phillynews.com, or follow on Twitter @AngelasInk.