Recent reports from a number of sources have revealed that the proposed Philadelphia Live! property could be the most recent of the Keystone State’s many abandoned casino projects. This is perhaps due to a case of cold feet on the part of the investors despite the fact that it has been less than a year since the state passed a new law that paved way for the construction of the Philadelphia Live! casino project. The reports have indicated that the joint venture between Greenwood Gaming and Cordish Company as well as the considerable list of assets it is associated with are currently being shopped.
This move is rather odd especially because of the rather huge amounts that have been invested in the project – both companies have invested over $100 million in licenses for the so-called Stadium Casino as follows: $10 million for an interactive gaming permit, $40.1 million for a Category 4 license as well as a whopping $50 million for a Category 2 license. As you may have noticed, the licenses listed do not include sports betting and therefore it will be up to the new owners to apply for the $10 million sports betting licenses that the state is currently offering.
Why Is This Happening?
While joint ventures certainly have their fair share of success, partnerships among competitors – as in the case of the Philadelphia Live! project – presents several unique challenges which given the current state of Pennsylvania’s gambling market, would only be amplified further.
To put this into perspective, for this to work, the two companies would have to first need to come to an agreement of the property itself before doing the same for every other aspect of the project. This means that the required logistics would range all the from investments to the other strategic partnerships they may be involved with. Furthermore, Greenwood Gaming, one of the partners, would need to weigh all the decisions about Philadelphia Live! against its existing properties in the Commonwealth, which include Parx Casino and the South Philly Turf Club.
Moreover, Pennsylvania’s gaming control board has not been shy to back its controversial and rather exorbitant tax rates and licensing fees, which would at some point become a burden even for companies as big as Greenwood Gaming and Cordish Company. All things considered, it would seem like selling off the project and associated to more interested parties is way more appealing than investing more capital and splitting the spoils once the project begins operations, or if it begins operating.
Both Greenwood and Cordish will be benefiting in one way or the other from the sale of the project. For instance, in the case of Greenwood Gaming, selling the extra assets will be a great return on investment. Cordish in the other hand will be able to concentrate on other more relevant and worthwhile expansion plans.