Six casino proposals for Philadelphia face closer look

Gaming commissioners listened to 94 people testify over the course of two days.

They heard from friends, employees, colleagues, and contractors of the six applicants for Philadelphia's second casino license.

They learned such trivia as the fact that a young Bart Blatstein built the city's first Wawa, that millionaire produce wholesaler Joe Procacci works out of a cubicle at his South Philadelphia headquarters, that developer Ken Goldenberg helped to fix up a Philadelphia public school.

They heard testimonials from Las Vegas employees of Wynn Resorts, as well as endorsements and warnings about casinos from neighbors in river wards, Center City, and South Philadelphia.

And now, after hours and hours of testimony Thursday and Friday, the seven political appointees who oversee the state's gaming industry will shift their attention to the fine print of each proposal.

Teams of investigators, attorneys, and forensic accountants already are poring over applications that are so vast they can be best measured by the pound rather than the word.

In Harrisburg and regional offices across the state, the Pennsylvania Gaming Control Board has assigned about five people to each application.

Their combined task is to gauge the "suitability" of each applicant for the board.

The process could take anywhere from nine months to a year, said Cyrus Pitre, chief enforcement counsel for the gaming board, who attended the public hearings last week.

Investigative teams, Pitre said, "will take as long as it takes."

With so many billions at stake and with the checkered early history of casinos in Nevada, the U.S. gaming industry today is among the most closely regulated businesses. In Pennsylvania, the gaming board requires the licensing of suppliers and key employees, as well as owners.

Pitre said the gaming board has forensic accountants who are now scrutinizing the finances of each proposal.

"You have some very complex agreements that have to be dissected," Pitre said. "Some might have financing that's ready, and they are able to go.

"Some might have pieces of financing," he said. "We're looking to see who can deliver what they promise."

Two applicants - Wynn Resorts and the partnership between Cordish Cos. and Greenwood Gaming & Entertainment Inc. - have said they will finance their casinos from existing cash. The other groups will need to borrow money. Those arrangements must be spelled out in detail to the board and include commitment letters.

Investigators, meanwhile, are examining the backgrounds of all principals to ensure that they are suitable to hold a gaming license. This includes personal histories, criminal checks, litigation, and business track records.

Pitre said the gaming board has begun one-on-one interviews with each principal for every application. But the investigations will go further and include interviews with neighbors, associates, and others.

Seven years ago, when the state issued the first round of gaming licenses, an investor with one of the projects recalled coming home to find investigators knocking on the door of a neighbor.

"We knock on doors where you live," Pitre said, "and where you used to live."

He added that if anyone is perceived as "dragging his feet" with information, the investigators will recommend to the board that an application be withdrawn with prejudice.

At the same time as the beyond-the-scenes work, commissioners soon will shift from listening to applicants to questioning them. Kevin O'Toole, executive director of the gaming board, said the next round of hearings could take place in late summer or fall.

The gaming board decided last June to reissue a second license in Philadelphia after it had revoked the privilege for the Foxwoods Casino group. Investors in that project lost their financing because of the 2008 financial downturn and were unable to salvage their plans.

In addition to the Wynn and Cordish-Greenwood proposals, the board has received applications from Blatstein, who wants to build The Provence on North Broad Street; Goldenberg, who is pitching Market8 in Center City; Procacci, who is leading the effort for Casino Revolution in South Philadelphia; and Penn National Gaming, which has proposed Hollywood Philadelphia also in South Philadelphia.

at 215-854-5659 or jlin@phillynews.com, or on Twitter @j_linq.