Quite simply, it represents more supply, and more supply outside Atlantic City equals less demand in Atlantic City," said Harvey Perkins, executive vice president of Spectrum Gaming Group.
For Atlantic City’s slumping casino industry, SugarHouse means more competition from the up-and-coming Pennsylvania gaming market. Since the first casino opened in Pennsylvania four years ago, Atlantic City gaming revenue has been in a tailspin, falling from us$ 5.2 billion in 2006 to us$ 3.9 billion in 2009 and down 8 % so far this year.
Now, Atlantic City will have to deal with a new rival only about an hour’s drive away. SugarHouse threatens to cut deeper into Atlantic City’s crucial Philadelphia-eastern Pennsylvania feeder market, which accounts for about 20 % of the resort town’s customer base.
“Quite simply, it represents more supply, and more supply outside Atlantic City equals less demand in Atlantic City,” said Harvey Perkins, executive vice president of Spectrum Gaming Group, a casino consulting firm based in Linwood.
SugarHouse will look to tap the population of the nation’s sixth-largest city for a steady flow of customers. The us$ 355 million casino sits on the Delaware River waterfront, not far from the Ben Franklin Bridge. SugarHouse’s name is inspired by the Jack Frost sugar refinery that once stood on the 22-acre site at Delaware and Frankford avenues, in the city’s Fishtown section.
SugarHouse will have 1,600 slot machines and 40 gaming tables, but the casino hardly resembles the gigantic, resort-style gaming palaces that rule Atlantic City’s oceanfront.
“We are a small property,” acknowledged Wendy Hamilton, SugarHouse’s general manager. “We like to say small, but mighty.”
Hamilton, a former Atlantic City gaming executive, declined to divulge SugarHouse’s projected annual revenue. However, once SugarHouse opens, the Pennsylvania Gaming Control Board will publish its monthly revenue, just like it does with the state’s nine other casinos.
SugarHouse has only 4,180 sqm of gaming space. That is even less than the 5,574 sqm of gaming space at the Atlantic City Hilton Casino Resort, the smallest of the resort casinos. SugarHouse’s gaming space is only about one-third of what is found in Atlantic City’s biggest properties.
Dennis Gomes, the new buyer of Resorts Atlantic City, maintained that SugarHouse simply can’t offer the same amenities, beachfront location and hotel accommodations that draw customers to the New Jersey shore. “That’s why I’m never going to be worried about Pennsylvania gaming, because they can’t duplicate what we have here,” Gomes said.
Critics have ridiculed SugarHouse’s low-slung building as a “dressed-up Walmart or Home Depot.” Parent company Rush Street Gaming, controlled by Chicago billionaire real estate developer Neil Bluhm, scaled back the casino from its original, grander design.
Hamilton, though, defended the building’s appearance, describing it as a “metropolitan design” that mixes steel, bright colors and architecturally stylish sharp angles. “It’s a big deal that gaming is coming to Philadelphia,” she said. “This casino has an upscale city feel to it. People will be shocked when they come through the front door.”
SugarHouse’s urban surroundings include vacant warehouses, some light industrial offices and three high-rise condominiums. The casino’s back patio overlooks the Delaware River and Ben Franklin Bridge, but the scenic view is somewhat marred by old pipes, pilings and crumbling piers left over from the Jack Frost refinery days.
“We are working with the U.S. Army Corps of Engineers. It is a lengthy process,” Hamilton explained of SugarHouse’s ongoing efforts to remove the eyesores from the river.
Hoping to please local residents and city planners, SugarHouse has built a walkway-bike path behind the casino that provides public access to the riverfront. Hamilton said the walkway is all part of blending in with the neighborhood. However, gambling opponents claim the casino clashes with Philadelphia’s historic character and should never have been built.
“It takes away from the history of Philadelphia as the nation’s birthplace, where the Declaration of Independence was written, where the Constitution was written and all of the other great things the city has to offer,” said Dan Hajdo, a spokesman for the anti-gambling group Casino-Free Philadelphia.
Casino-Free Philadelphia members staged a noisy protest when SugarHouse held its groundbreaking ceremony last year and are promising to show up again when it opens. The group says it wants to “bankrupt” the casino.
“What we will be doing is sending our message,” Hajdo said. “We’re going to continue our fight for the city, to make people aware of the social cost of predatory gambling. There’s still a very large, very active and very motivated group of Philadelphians opposed to the casino.”
Hajdo predicted SugarHouse will generate crime and gambling addiction. But Hamilton said the casino will serve as a catalyst for economic development and jobs, all for Philadelphia’s benefit. More than 20,000 people applied for the casino’s 800 jobs, with most of the workers coming from Pennsylvania, she noted.
SugarHouse is the first of two casinos planned for Philadelphia. The second, called Foxwoods, is proposed on the Delaware River four miles south of SugarHouse, but has been delayed while the owners struggle to put together a development deal.
In addition to Atlantic City’s gaming industry, SugarHouse will face competition from casinos in suburban Philadelphia - the Parx Casino in Bensalem and the Harrah’s Chester Casino & Racetrack.