Pa. board awards casino slot licenses

NEW YORK --Sugarhouse Casino, a $550 million project headed by Chicago investor Neil Bluhm, and Foxwoods Casino Philadelphia, were awarded the first slot licenses for Philadelphia, the largest US city to allow casino gambling.

Five slots-only licenses around Pennsylvania were awarded yesterday by the state's Gaming Control Board from among 13 applications. Bidders denied licenses include Trump Entertainment Resorts Inc., whose shares fell the most in more than two years, and Isle of Capri Casinos Inc.

The Pennsylvania Legislature passed a law in July 2004 allowing for 61,000 slot machines at 14 casinos to reduce property taxes by as much as $1 billion. They are intended to generate $3 billion a year in revenue, which would make Pennsylvania the third most lucrative commercial casino market in the United States, behind Las Vegas and Atlantic City.

"Besides Las Vegas Sands, the public companies got shut out," said Eric Green, director of research at Penn Capital Management in Cherry Hill, N.J.. The gaming board may have been concerned the Philadelphia casinos would be used to funnel better customers elsewhere. "They wanted someone who would focus on that property and not send people to Atlantic City."

Majestic Star Gaming Pittsburgh won a license in Pittsburgh, beating out Isle of Capri, which had pledged money for a new hockey stadium. BethWorks Gaming LLC, a development of Las Vegas Sands Inc., in Bethlehem, Pa., and Mt. Airy Resort & Casino in the Poconos received at-large licenses.

Unsuccessful Philadelphia bidders included Donald Trump's $300 million TrumpStreet project, and Pinnacle Entertainment Inc., a Las Vegas-based casino company which proposed a $350 million project.

"No casino company from Atlantic City was given a license," Donald Trump said.

"We had a proposal that was going to help a very bad area of town, so I'm disappointed" in Pennsylvania Governor Ed Rendell," he said. "It would have been very good for Philadelphia."

The Sugarhouse casino will sit on a 22.6 acres, a site previously occupied by the Jack Frost Refinery.