But how much? That will be a central question during the three days of
Pennsylvania Gaming Control Board hearings that start Tuesday for five
applicants seeking Philadelphia's second casino license.
The gaming board last year directed applicants to say whether they
thought the Philadelphia region was already saturated with places to gamble.
The applicants were also asked to estimate how much each proposal would
add to losses by Philadelphia-area gamblers, as opposed to simply taking
business from SugarHouse, Parx, Harrah's, or Valley Forge. Taking existing
casinos' business is called cannibalization.
The owners of SugarHouse Casino in Fishtown will have a chance Thursday
to present evidence to the gaming board that a second casino in the city would
harm the industry.
"Simply put, the supply of gaming product has outstripped
demand," SugarHouse's attorney, John M. Donnelly, wrote in a legal filing
last month.
The applicants disagree.
Bart Blatstein's Provence and Ken Goldenberg's Market8 - both vying to
build in central Philadelphia - have released cannibalization estimates for
their own projects and the others. The three remaining applicants are Casino
Revolution, Live! Philadelphia, and Hollywood Casino Philadelphia.
Provence - proposed along Callowhill Street west of Broad Street -
estimated that about half its projected revenue from slot machines and table
games would be new money into the industry, money that would not have been spent
at another casino.
The Provence analysis, by Spectrum Gaming Group L.L.C., estimated Casino
Revolution's new revenue at 36 percent of overall revenue, Market8's at 35
percent, and Live! Philadelphia's at 34 percent. Spectrum said that 30 percent
of Hollywood Casino's revenue would represent an increase to the overall size
of the region's gambling pie.
Just as Market8 is bullish on its estimates of overall revenue for the
proposed casino at Eighth and Market Streets, its backers are more optimistic
than competitors on how much more money area residents and visitors will lose
in a new casino.
Market8 said 78 percent of its projected revenue would be new, while 69
percent of the revenue at Provence would be new.
PFK Consulting USA, working for Market8, made one estimate for a casino
in South Philadelphia, where three applicants have lined up close to I-76, and
suggested that 65 percent of the revenue would be new.
Joe Procacci's Casino Revolution, at the other extreme, estimated that
in the first year of operations a South Philadelphia casino would take $185
million in revenue from current casinos in the area, about 17 percent of the
total, Procacci's spokesman, A. Bruce Crawley, said.
That would force the existing casinos to retool themselves for the competition,
as has happened repeatedly around the country, Crawley said. "That will
eventually, over time, about four years on average, allow them to return to
previously existing revenue levels," Crawley said.
Live! said its casino near the sports stadiums would boost annual
gambling revenue in the region by $41 million more each year than the Center
City locations would. Incremental state tax revenue over a decade would be $170
million more for Live! than for the Center City proposals, Live! said. The company
did not break down the gain relative to its overall projected revenue.
Hollywood Casino said it provided cannibalization reports to the gaming
board, but declined to release them Monday.
Source: Philly.com
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