Feature Article |
Gaming the System
By Matthew Teague
ACT 71 DICTATED that seven people would oversee the expansion of gambling in Pennsylvania: four chosen by various members of the state legislature, and three — including the chairman — chosen by Governor Rendell. No gambling experts would preside, and no mayors from the cities in question.
They convened for the first time in December 2004 and, after some initial housekeeping, set about the business of picking among the state’s rich suitors. They would license two in Philadelphia, and one each in Pittsburgh, Bethlehem and the Poconos.
Soon, five potential Philadelphia casinos emerged: TrumpStreet, Pinnacle, SugarHouse, Riverwalk and Foxwoods.
On its face, the list of investors seemed like a surprising roll call of local and national celebrities — music mogul Quincy Jones, ex-Phillie Garry Maddox, Temple basketball coach Dawn Staley — but they only held small stakes. The real power behind the casinos offered no surprises: local bosses, partnered with out-of-state, big-money gambling outfits. Some had more muscle than others, and here they are, in a rough ascending order of political pull:
Pinnacle was by far the worst connected of the five sites. A Las Vegas company called Pinnacle Entertainment provided backing, along with Robert Johnson, founder of BET.
Riverwalk was proposed by Planet Hollywood, which brought the glitz of names like Stallone and Schwarzenegger. Riverwalk also claimed more minority investors than any other casino, and they were well connected, but to the wrong people: They enjoyed the favor of city officials, but as became clear later, the city’s influence meant little, if anything.
TrumpStreet, of course, featured Donald Trump, along with local investors like Pat Croce, former 76ers owner, and Brian Tierney, publisher of the Inquirer and Daily News.
SugarHouse’s investors were members of powerful families, like those of Neil Bluhm, a Chicago billionaire, and of Richard Sprague, an influential Philadelphia attorney; the extent of Sprague’s significance would become clear later.
About a third of Foxwoods is controlled by the Mashantucket Pequot tribe from Connecticut. But its most important investors are local: the family trust of Ron Rubin, a local developer; Ed Snider, head of Comcast-Spectacor, which owns the 76ers and Flyers; and, most important, the family of Lewis Katz, prominent local Democratic fund-raiser. (He personally donated $10,000 to Fumo in 2002.) Katz means more to Governor Rendell than just funds; the two are close, and spend a lot of time together out and about.
The operators, once assembled, jostled for sites around the city. Act 71 included a provision that no casino could be established within a 10-mile radius of any existing gambling halls, which include racetracks at Harrah’s in Chester to the south and Philadelphia Park in Bensalem to the north. That narrowed the available land to a thin strip across the city, and — in a pointed reminder of Ed Rendell’s original vision — the riverfront.
TrumpStreet proposed a site in the city’s northwest. The others all lined the river, from north to south: Pinnacle, SugarHouse, Riverwalk and Foxwoods.
The problem, of course, was that Philadelphia doesn’t look like Connecticut’s woodlands or Nevada’s deserts. There’s not a comparable site anywhere in the nation: Other gambling cities either have nowhere near Philadelphia’s population, or are like Las Vegas or Atlantic City, where gambling is the reason they exist. Philadelphia, though, is full of streets and cars and people and houses and shops and schools. So where, in all that, could the casinos fit without stomping on local toes?
They convened for the first time in December 2004 and, after some initial housekeeping, set about the business of picking among the state’s rich suitors. They would license two in Philadelphia, and one each in Pittsburgh, Bethlehem and the Poconos.
Soon, five potential Philadelphia casinos emerged: TrumpStreet, Pinnacle, SugarHouse, Riverwalk and Foxwoods.
On its face, the list of investors seemed like a surprising roll call of local and national celebrities — music mogul Quincy Jones, ex-Phillie Garry Maddox, Temple basketball coach Dawn Staley — but they only held small stakes. The real power behind the casinos offered no surprises: local bosses, partnered with out-of-state, big-money gambling outfits. Some had more muscle than others, and here they are, in a rough ascending order of political pull:
Pinnacle was by far the worst connected of the five sites. A Las Vegas company called Pinnacle Entertainment provided backing, along with Robert Johnson, founder of BET.
Riverwalk was proposed by Planet Hollywood, which brought the glitz of names like Stallone and Schwarzenegger. Riverwalk also claimed more minority investors than any other casino, and they were well connected, but to the wrong people: They enjoyed the favor of city officials, but as became clear later, the city’s influence meant little, if anything.
TrumpStreet, of course, featured Donald Trump, along with local investors like Pat Croce, former 76ers owner, and Brian Tierney, publisher of the Inquirer and Daily News.
SugarHouse’s investors were members of powerful families, like those of Neil Bluhm, a Chicago billionaire, and of Richard Sprague, an influential Philadelphia attorney; the extent of Sprague’s significance would become clear later.
About a third of Foxwoods is controlled by the Mashantucket Pequot tribe from Connecticut. But its most important investors are local: the family trust of Ron Rubin, a local developer; Ed Snider, head of Comcast-Spectacor, which owns the 76ers and Flyers; and, most important, the family of Lewis Katz, prominent local Democratic fund-raiser. (He personally donated $10,000 to Fumo in 2002.) Katz means more to Governor Rendell than just funds; the two are close, and spend a lot of time together out and about.
The operators, once assembled, jostled for sites around the city. Act 71 included a provision that no casino could be established within a 10-mile radius of any existing gambling halls, which include racetracks at Harrah’s in Chester to the south and Philadelphia Park in Bensalem to the north. That narrowed the available land to a thin strip across the city, and — in a pointed reminder of Ed Rendell’s original vision — the riverfront.
TrumpStreet proposed a site in the city’s northwest. The others all lined the river, from north to south: Pinnacle, SugarHouse, Riverwalk and Foxwoods.
The problem, of course, was that Philadelphia doesn’t look like Connecticut’s woodlands or Nevada’s deserts. There’s not a comparable site anywhere in the nation: Other gambling cities either have nowhere near Philadelphia’s population, or are like Las Vegas or Atlantic City, where gambling is the reason they exist. Philadelphia, though, is full of streets and cars and people and houses and shops and schools. So where, in all that, could the casinos fit without stomping on local toes?
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