Analyst says new Philadelphia casino offers warning for Meadowlands gaming
While a new casino development neighboring the Philadelphia Sports Complex won't lure business away from Atlantic City, it will serve as a warning to any company looking to someday open a casino in the Meadowlands, a gaming industry analyst said.
The planned 200,000-square-foot development — formed by Stadium Casino LLC, a partnership between gaming companies Greenwood Gaming and Entertainment Inc. and The Cordish Cos. — will be located on the site of an existing Holiday Inn near Philadelphia's professional sports venues and include a 240-room boutique hotel and up to 2,000 slot machines and 125 table games.
Stadium Casino LLC said in a statement the project's immediate proximity to the city's sports complex "will maximize revenues for Pennsylvania and far exceed the revenues that could be generated by other potential locations in the city."
But John Kempf, managing director of RBC Capital Markets' gaming research sector, said the location will dramatically reduce the casino's gaming revenues during sports and entertainment events held at Lincoln Financial Field, Citizens Bank Park and Wells Fargo Center.
"The typical gaming customer has no interest in sports events, so they'll stay home on game days because they don't want to deal with all the traffic," Kempf said. "The casino will see a big crowd before and after a game, but their core gamblers will stay away from the sports complex on those days. At the end of the day, it's not a benefit to have your casino in a sports complex."
While Kempf said a casino development near MetLife Stadium would see gaming revenues decline on New York Jets and New York Giants game days, he noted that unlike Stadium Casino in Philadelphia, it would also grapple with the Meadowland's additional entertainment venues — like Izod Center and the planned American Dream complex — which would intensify traffic congestion and further deter its most profitable customers.
"A CFO of a gaming company recently told me if he could find some way to never have a major band playing a concert at his casino, then he would do that," Kempf said. "All the concert people who never gamble go in and take up crucial casino space from core customers, so gambling volumes aren't as strong when casinos have concerts or when they're near venues that have concerts."
In terms of the proposed Philadelphia casino's impact on New Jersey's existing gaming market, Kempf said even though the project is located less than 60 miles from Atlantic City, "adding another casino to Philadelphia will have a bigger impact on Philly casinos than Atlantic City ones."
"This new casino will directly shift gambling share among the existing casinos in Chester and Philadelphia, like SugarHouse. The impact on Atlantic City won't be anywhere near as big as it was when Philly's initial stuff came in," Kempf said. "For so many months and years now, Atlantic City has been on a consistent decline from the increased competition in the area, but I think the impact from this new casino will be pretty minor. People who want to go to Atlantic City will still go, and people who want to stay in Philly will now just have another option."