By now, Steve Wynn's intended return to mid-Atlantic gaming is well-known.  Wynn Resorts will be stepping in as "managing partner" for the Mashantucket Pequots and other investors, with a controlling interest in the project: at least 51%.  This will need official approval from the Gaming Control Board (GCB), but its almost unfathomable that the GCB would stand in the way given the recent ultimatum the board previously gave the Foxwoods group for securing financing.

This is obviously great news for Pennsylvania and Philadelphia gaming: no one has a better reputation for developing quality casinos than Steve Wynn.  He set a new standard for Atlantic City in 1980 with the Golden Nugget, than for Vegas in 1989 with the Mirage, than again for Vegas in 1998 with Bellagio and more recently with Encore.   One could argue that PA won the Wynn lottery of sorts: for years he's been flirting with a mid-Atlantic return with some interest in Atlantic City's Bader Field and the withdrawn bid for Aqueduct VLTs (NYC) last Fall.

Of course, Wynn Resorts' apparently scaled-down plans for the casino cut against his own gaming history (no real luxe, no hotel), but once again Wynn is reading the market and adjusting accordingly.  Pennsylvania's relatively low table games tax (16% now, 14% later), probably helped raise his interest in PA gaming. That was a key move: New York and Maryland legislators should take note. 

Table games are increasingly inevitable for gaming in these two mid-Atlantic hold-outs.  As with VLTs, however: setting the tax rate could make a major difference in the success of adding table games at properties in these states.  The general good news for mid-Atlantic gaming is that Pennsylvania's high slots tax rate (55%) hasn't precluded interest from two top-tier, international gaming developers (Wynn Resorts & Venetian Sands) - though it might have stalled such interest from being realized for a few years.  States with gaming sites less potentially lucrative than the Philly waterfront or northeast PA (proximate to New York) may need to go farther to attract such high quality gaming firms.

There are, of course, still questions about market saturation with regards to regional gaming, especially in the  greater Philadelphia-Wilmington region.  Wynn's entry raises the ante for all the area operators: they will be under increasing competitive pressure to keep their customer base consequent to the opening of the Wynn-Foxwoods casino. But overall, I think Wynn Resorts' entry into the mid-Atlantic gaming market raises the entire regional industry by increasing its national (& international) profile.  A Wynn property will probably raise standards all around,

Cross-marketing with all regional properties will provide one key to competitive success, as Harrah's demonstrated years ago.  Without other regional properties, Wynn Resorts would be at a disadvantage in this area.  Then again, this is the fellow that basically designed modern player's clubs, based on the old green stamp model.  I doubt many people on earth no more about about building a loyal customer base in gaming than Steve Wynn. 

In the meantime, he sounds like he's having fun  - from philly.com: 

"All my good old friends, Italians and Jews and every conceivable type of ethnic group that love to shoot craps and gamble," Wynn said, describing his anticipated clientele. "And they're 10 minutes away by car or bus from my casino on the river."

I think that's Steve Wynn winking and nodding to gaming's past, but also underlining his grasp of the regional gaming market. 

Into Delaware...the state Senate may vote on the bill as early as tomorrow, sending it to the governor to sign.  The tax is relatively high for table games (29%) -- much higher than Pennsylvania's 16%, but the fees are also lower and could be as low as $5 million for the three racinos if they reach a certain quote for capital improvements.

Unlike PA - where horseracing interests opposed table games- there's a nice bonus for the horseracing industry: 4.5% ot the new revenues.   The state projects 700 more gaming jobs and 40 more regulatory positions from adding table games, according to this Delaware Online piece.

I like the progress on gaming for Delaware (though not the splits), and once again appreciate the efforts of the legislature and pro-gaming governor.  However, the racinos are happy -- after the diminished returns on sports betting.  Meanwhile, there's growing momentum in Maryland to catch up: a logical move -- I've been saying (and writing ) for two years that there never was much logic to the slots-only approach, and finally -- finally - that perspective has gained some real political traction.   However, with 2010 being a state election year-- don't expect much progress in Maryland until at least 2011.

Update 1/29/10: This is a done deal -- Delaware will get table games: play should begin in May.

Finally, table games are a reality in Pennsylvania - Gov. Ed Rendell signed the compromise bill into law today.  Here are some key points:

• fees: $16.5 million for large casinos, $7.5 million for new resort casinos
• 250 table games for large casinos, 50 for resorts
• splits: 16% state/84% industry for year 1, 14% state/86% thereafter
• $3 million for problem gambling fund
• resort casinos allowed 100 more slot achines (max. 600)
• state will allow a third new casino license (two more licenses are still open from 2004 legalization bill)
• new ethics rules for PA GCB & casino employees

Quick & dirty analysis:

• Pennsylvania took a major step towards mid-Atlantic gaming supremacy today
• the fees & splits are industry-friendly for the labor-intensive table games (read: low profit margins)
• $$ towards problem gambling fund is admirable
• limitation on numbers of table games is problematic, but not overly-restrictive
• after almost five months of legislative back-and-forth, PA leaders did the right thing by legalizing table games in a way that will grow the state's gaming industry, create many well-paying jobs and contribute substantial revenue to the state govt. & local governments

In Atlantic City, they pay very close attention to anything that happens in Pennsylvania gaming, hence this little nugget I read today from the Press of Atlantic City, via AP:

Top Pennsylvania legislators apparently have resolved a key disagreement holding up casino gambling expansion.

 Two people briefed on a telephone conversation Wednesday among legislative leaders say the group agreed on a provision that would allow new applicants for Pennsylvania's last remaining resort casino license.

The agreement also would possibly create another license in 2017.

The legislation would also legalize table games at slot-machine casinos in an effort to raise revenue for the cash-strapped state.

 Of course, there's been hopeful signs on PA table games before that haven't borne out, but  certainly this appears to be good news if you are looking forward to the added revenue, jobs and recreational opportunities on PA table games.

Pennsylvania governor Ed Rendell has done a complete turn on table games in the past four months. Now, he's the strongest advocate, as he grows increasingly frustrated with Assembly delays in passing a table games bill.  Now, he's fed up, threatening state layoffs, the closure of state parks and the shutdown of the state museum in Harrisburg.  (That's a cool museum, would hate to see it closed) from www.philly.com:

Gov. Rendell yesterday upped the ante in his bid to balance the state budget, saying that without a table-games bill he would have to close the State Museum of Pennsylvania and some state parks in addition to laying off at least 1,000 more government employees. Rendell last week said layoffs of 1,000 more state workers were "imminent" if no gambling bill was on his desk by Jan. 8. The bill - the final unresolved part of the state budget the governor signed in October after a 101-day impasse - would bring in $250 million in license fees and taxes that Rendell said is necessary to keep the government running.

The House passed its bill, but the Senate is stalled and the two sides have been wrangling over fees and splits for four months.  This should have been resolved well before the budget was concluded: I still can't fathom the logic of passing a budget that includes table games revenue without actually agreeing to terms that would allow accurate revenue projections.  Hopefully, the table games split will end up at approximately 15/85, a reasonable outcome for the casinos and the state.

Unfortunately, the Pennsylvania case demonstrates one problem related to tying state budgets too closely to gaming revenues.  Politics often gets in the way of the desired outcome (a balanced budget).  Gaming revenue is also variable, and whilst you can depend on a certain broad range of revenue in any given year, dips of 10-15% are typical depending on economic circumstances.  Better to project the income as supplementary (to specifically add to an existing fund for higher education, aid to seniors, etc.), rather than necessary to balance state ledgers.  

With budget negotiations in their final stages in Pennsylvania, the tax rate and annual fee on table games in the state's casinos is still not settled.  Now, a coalition of five of the casinos is applying major pressure to keep the rate at 12% and the annual fee to $10 million, and they have allies in labor groups, with a novel "10 and 12" battle cry. 

Table games will certainly be a boon for PA gaming (and the state treasury)-- though the proposed House tax rate of 34% tax rate and $20 million fee is potentially stifling, given the higher labor costs for this type of gaming.  The PA AFL-CIO's backing for lower tax and fee is an interesting development and signals a labor play for the future dealers.  If it helps achieve the lowest possible tax rate and fee, then this really could be the start of an interesting collaboration between at least some PA casinos and organized labor viz dealers, in sharp contrast to the antagonistic situation in Atlantic City.  

However, thus far the new Pennsylvania Casino Association (PCA) doesn't appear to include Mohegan Sun, Penn National or Harrah's  -- instead consisting of the newer, independent operators.  PCA has also threatened legal action in opposition a proposal to allow smaller resort casinos to increase from 500 to 1,500 slot machines and allow players who are not resort guests/

Three years and a lifetime of legal hassles after being awarded a slots license in 2006, Philadelphia's SugarHouse casino began construction along the Delaware River yesterday.   From Philly.com (Philadelphia Inquirer), here's more:

Chicago developer Neil Bluhm said the last three years had been "a long road" for the controversial slots parlor on North Delaware Avenue in Fishtown andNorthern Liberties. "We'll have some fun. We'll create some jobs and we'll help beautify part of Delaware Avenue," Bluhm told about 300 community, political, and financial supporters seated under a party tent. Bluhm said the casino would be built in 10 months, and would create 500 full-time jobs and 500 construction jobs. Nutter, who opposed the project when he took office in 2008 but who came to support it in March, said the road to the groundbreaking "wasn't always easy." But, he added, "we ended up in the right place." He acknowledged that he had "serious and significant differences of opinion" about the project when he became mayor. But he said SugarHouse modified its design, and addressed concerns about traffic and parking. "There comes a point when you just have to move forward," Nutter said.

Mayor Nutter's shift was key to this, and finally, the successful political synchronicity that brought this project to groundbreaking despite the vocal, if minority, opposition movement.  That's an ambitious completion schedule for opening-- but then again, Sugar House has had plenty of time to plan. 

They have mixed feeling about their current governor (Ed Rendell), but a new Quinnipiac U. poll shows that Pennsylvanians want table games at their casinos, according to the Philadelphia Inquirer.  And its not even close: 67%to 27% in support to help the state with its budget problems. 

I'm not surprised at all by these numbers: there's widespread support for table games -- the myth that full-scale casinos will lead to all sorts of social problems, chaos, etc. grows weaker by the day as people see the truth around them, in their own communities.  Pennsylvania's casinos have demonstrated that they can profit, bring in boatloads of cash for the state and be good neighbors that provide jobs. 

In August, I was cutting through Jersey and heard a radio ad for a job fair at Harrah's Chester -- a job fair! - in the midst of this 'Great Recession.'   Table games appear imminent in the keystone state, although the details are still vague, including the all-important license fee and split percentages on the more labor-intensive table operations.  These will probably end up at something like $15 million and 12-18%, according to this report.

Obvious implications for Maryland and elsewhere -- apparently regional competition and the implications therein was a topic of conversation at the most recent public meeting of Maryland's Location Commission.   That's good news-- Maryland gaming officials need to be moving in this direction, as they are looking at the strong possibility of racinos with table games right over the borders in Pennsylvania, Delaware and West Virginia by mid-2010.

But would Marylanders show the same public approval for them as Pennsylvanians have expressed?  We don't really know-- I've never seen any polling on this question for Maryland.  I'm speculating that there would be support, though not as strong as the 67% approval in PA.  Why?  Because Marylanders have yet to see gamng up close and nearby, and therefore questions remain -- especially with the Arundel Mills opponents whipping up local opposition.  However, if a poll would be done-- I think a majority of Marylanders would likely support table games, thus providing legislators with a rationale to act.    

They're almost here....Pennsylvania legislators finally broke a deadlock over the state's budget and reached a compromise that includes the addition of table games to PA casinos. The revenue splits aren't clear at this point, though a bill introduced last week would:

• $10 million per casino for a license fee
• $500,000 renewal fees
• a revenue split of 79/21: 20% in taxes - 2% for localities, 18% for the state, specifically allotted to a Property Tax Relief fund & 1% for the state's agriculture department for use in various ways

If the deal goes through, table games will probably begin in six to nine months in PA, or begin sometime in the Spring or early Summer of 2010.  This depends on the ability of individual operators to get them up and running.

Not a bad deal for Pennsylvania-- assuming it goes through.  Gov. Ed Rendell hasn't favored the addition of table games, but the budget priority will probably override his objections.  Right off the bat, he can add upwards of $100 million in revenue via fees With table games at over 30% of revenue in Atlantic City, this will clearly be a boon for the PA casinos.

Currently, approximately 22-25% of AC's customers come from PA and that number will drop by at least a few percentage points (if not more), further hurting AC casinos.  Of course, this makes Delaware's move to table games that much more likely.  It will probably increase the chances that Jefferson County, West Virginia voters will approve table games at Charles Town Races and Slots in a scheduled referendum. 

The combined PA/DE/WV tables games play also puts more pressure on Maryland leaders to minimally review the new competitive threat posed by regional table games and act accordingly, if merited.

Now that the Pennsylvania Gaming Control Board has unanimously supported Foxwoods' move back to the Delaware River waterfront, the fall-out is predictable.  Leading off is the Philadelphia Inquirer, which yesterday editorialized:

By reaffirming that location in a unanimous vote a week ago, gaming board members under the gavel of Gregory C. Fajt unwittingly may help drive gaming reform. Meanwhile, they've thumbed their noses at city efforts to make the best of a bad bet in hosting slots parlors. For nearly three years, Foxwoods has been stymied, with good reason, by neighborhood and official city opposition. Foxwoods officials bowed to reality last year by agreeing to seek a deal to move to Center City. Either the Gallery or Strawbridge's would have been better than the riverfront, while still problematic.

That gambit gave the gaming board a clear opening to take the whole process back to square one. Foxwoods had failed to meet a deadline to open, so the board could have refused a license extension and ordered new bids. Instead, the board took what its members may regard as the easy way out by sending Foxwoods back to the river. That may prove to be a fruitless mission, however.

 Yes -- Philadelphia gaming is beset with problems, this no one can argue with.  But what's the source, and is the GCB really at fault with the latest move?  Maybe, but would it be fair to just pull the bid from Foxwoods because it "failed to meet a deadline to open" when it has been stymied at every step by a lethargic city permit process and shrill opposition no matter where it was placed?  

If anything, Foxwoods planners deserve some credit for adapting a year ago and agreeing to move to center city, in the face of neighborhood opposition to the riverfront after the firm won in the PA Supreme Court. Who knows what may occur in Philly, but I do think Foxwoods has been above-board, and sensible amidst tremendous difficulty and obstacles -- virtually none of its own making.