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When the stakes are high, the investment risk is usually worth it; so thought numerous casino companies that competed for Pennsylvania gaming operator licenses.
After more than two years, the state’s Gaming Control Board awarded permanent operators licenses to all 11 lucky companies in late December.
The first six had previously been conveyed to the state’s existing racetracks. As of press time, two have already opened, with another location imminent. The others are scheduled for 2008.
From a final field of five applicants, the two prized Philadelphia licenses went to the Foxwoods Casino, owned by Connecticut’s Mashantucket Pequots and several local sports figures and businessmen, and SugarHouse, owned by a powerful legal and development conglomerate.
The remaining licenses went to: Detroit casino developer Don H. Barden for Pittsburgh’s Majestic Star Casino; the Las Vegas Sands Corp. will open the Sands Bethworks in Bethlehem; Louis A. DeNaples will develop an aging Pocono Mountain resort.
I suspect, but cannot prove, that a few of these licenses also had some emotional elements. For example, since 1857, Bethlehem – 60 miles from Philadelphia – housed the once thriving163-acre Bethlehem Steel Corporation. It was America’s second largest steel producer. Following a 2001 bankruptcy, the company was acquired, then closed. A casino could help rejuvenate the land, people and local economy.
Some unhappy losers were Donald Trump, Pinnacle Entertainment and Riverwalk, locally-owned, but to be managed by Planet Hollywood. A 113-page report attributed poor locations that prohibited local social and economic integration, plus Trump and Pinnacle’s ties to Atlantic City, for the rejections. However, approximately 15 miles down Interstate 95 is Harrah’s new property, and Harrah’s owns four Atlantic City casinos. Does that make sense?
The report triggered a 30-day appeals timeframe for any opposing groups. SugarHouse and Foxwoods have both “lawyered up” with some heavyweight legal counsel to meet any opposition head on. Stay tuned for the outcome.
Will Pennsylvania gaming affect Atlantic City, only 60 miles from Philadelphia? It already has in its early stages. However, Pennsylvania’s high tax structure will limit even the wealthiest operators from offering amenities and promotions comparable to those in AC.
Recently, I commented on some Atlantic City public relations nightmares and opportunities; Pennsylvania’s Philadelphia Park faced its own within a month of its December 19 opening.
The racino’s 2,100 slot machines generated $180 million in its first 30 days. However, in late January, the casino confronted a customer relations issue, picked up by every news outlet in the country.
A customer playing a Wheel of Fortune slot machine hit a jackpot, bonus lights and all. Using his player’s card identification, the machine personally congratulated Mr. Wilkinson for winning $102,000. Three slot attendants verified his win, and asked he wait 45 minutes for payment.
Then, the bottom dropped out for poor Wilkinson. Apologetically, security officers informed him that during a system test, the message had mistakenly come through on his machine. Management told the retired carpenter a system malfunction had caused the bogus win.
In a written statement, the casino claimed, “The error caused an incorrect message to be sent to the promotional screen. There was no winning combination in the machine that would have triggered a jackpot.”
However, not to appear totally heartless, management offered Wilkinson two buffet “comps”, totaling $40. Wilkinson’s response to the “generous” offer was to file a fraud complaint with the Pennsylvania Gaming Control Board, who began an investigation.
The corporate bureaucracy ultimately overturned their decision. Within several days, Philadelphia Park awarded Wilkinson $76,500, or $102,000 minus taxes. The management stated that their original reluctance to pay, despite the glitch, was to ensure no collusion between Wilkinson and the programmer.
Corporate spin or crisis management? The public has to feel confident that if they win, they get paid. Second, the buck stops with the management – customers shouldn’t be penalized for computer errors. Also, Wilkinson was no hotshot gambler; he was an average guy who came in, trusting the integrity of the system.
When the new casinos open, they must ensure “glitches” don’t happen. No gaming property needs unfavorable press right out of the starting gate.
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International Casino Exhibition 2009 - UK
