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According to multiple sources, the proposed Philadelphia Live! property could be the latest in a long line of abandoned casino endeavors. Less than a year after a new law paved the way for construction, investors seem to have caught a case of cold feet.
Reports indicate that Cordish Company and Greenwood Gaming are shopping their joint Pennsylvania project and its considerable list of assets.
We've heard same. https://t.co/OnzSsme796
— Chris Krafcik (@CKrafcik) October 19, 2018
In addition to early-phase construction costs, the duo has invested more than $100 million in licenses for the so-called Stadium Casino:
Apparently, it will be up to the new owners to apply for the $10 million PA sports betting permit.
Teaming up with a competitor presents a number of unique challenges, though. And those challenges would only be amplified in Pennsylvania.
The two companies would first need to agree on management of the property itself, then about online gambling and the Category 4 mini-casino license acquired at auction. Sports betting is on the horizon, too. The required logistics span everything from investments to partnerships.
Further complicating matters, Greenwood would have to weigh any decisions about the new Live! casino against its existing PA properties, Parx and the South Philly Turf Club.
And then there’s the difficult environment that the high taxes and licensing fees create.
It’s possible the two companies have decided that selling off the assets to more-interested parties is preferable to investing more capital and splitting the spoils.
Cordish isn’t overly invested in online gambling or sports betting at this point in time. And much like a newly hired general manager inheriting a head coach, it may not want to begin those journeys by taking on partners that are at least partially chosen by someone else.
To the extent a Philadelphia casino would excite Cordish, a lack of complete control over satellite casinos and new verticals could create headaches.
This scenario has played out multiple times since PA passed its gaming reform law last year. Some casino operators see expansion as an opportunity, and others see it as a good reason to get out of Dodge. Four of the state’s 12 existing casinos have changed ownership over the past year, and a fifth changed day-to-day management.
Now, it looks like yet another one may follow suit.
Greenwood has access to the new verticals through Parx, so the Stadium project is somewhat redundant from that standpoint. It will offer online gambling and sports betting, rolling out the latter at the Turf Club, too. Regulators have awarded interim approvals for both.
At the end of the day, selling off the extra assets – the interactive permits, the Category 2 license in Philadelphia proper and the Category 4 license – could provide the best return on investment.
The aforementioned MGM is the first name that comes to mind when considering parties that could be interested.
The company’s wish list includes expanding its sports betting and online gambling presence, and Pennsylvania market access is a longtime MGM goal. It was even in advanced talks to purchase Sands Bethlehem before the deal fell through last year.
The Philadelphia casino license could be a solid backup plan for MGM, especially considering its prime location for PA sports betting. All the better that it comes with online gambling and a satellite casino already baked into the cake.