Momentum is building in Harrisburg to put the Foxwoods Casino license up for bid statewide, instead of guaranteeing that it stays in Philadelphia.

Lawmakers in the House and Senate are preparing to introduce bills when the General Assembly reconvenes in January that would take away Philadelphia's automatic right to a second casino.

The prospect of losing a casino could be an unexpected outcome of the prolonged collapse of Foxwoods.

SugarHouse Casino in Fishtown finally opened in September, but the stalled Foxwoods project in South Philadelphia lost its right to run a casino in a 6-1 Gaming Control Board decision Dec. 16.

State Rep. Curt Schroder (R., Chester), chairman of the House Gaming Oversight Committee, is drafting legislation that would allow the auctioning of the Foxwoods license to the highest bidder anywhere in the state.

Republican leaders, including incoming House Majority Leader Mike Turzai of Allegheny County, have indicated that they support the idea, Schroder said.

In the Senate, Democrat John N. Wozniak of Johnstown plans to reintroduce legislation that would open up bidding for not only the Foxwoods license but also one reserved for the financially struggling Valley View Downs racetrack in Western Pennsylvania's Lawrence County.

Wozniak introduced a similar bill in May, but the full Senate never voted on it.

He said in an interview that the bill might advance further now that the gaming board had revoked the license and the matter was more pressing.

"Philly could still be in the mix," Wozniak said. "I'm not saying you can't have it there. But let the private sector make the determination."

When Pennsylvania legalized gambling in 2004, legislators failed to think through what would happen if a license was revoked. In particular, the gaming act is silent on whether a casino operator should get a refund of the $50 million licensing fee for a slots parlor, said Doug Sherman, general counsel for the gaming board.

Litigation seems likely.

The Foxwoods investors have 30 days to appeal to Commonwealth Court after the board files its final order on the license, said Doug Harbach, a gaming board spokesman. Though the ruling was made Dec. 16, the order has not yet been filed.

Philadelphia is the only city or county in the state with a set-aside for two licenses. Under the 2004 gaming law, Philadelphia would get two and Pittsburgh one, and 11 licenses would be scattered across the state. Two of those 14 licenses have not been awarded.

Schroder said that he thought bids on the Foxwoods license should start at $50 million, and that letting the market decide a location would take some of the politics out of the process.

When the gaming board awarded Philadelphia's two licenses in December 2006, it was widely perceived that political connections had played a role in the selections. One license (Foxwoods) went to a group led by friends of Gov. Rendell, and the second (SugarHouse) was awarded to a project including onetime allies of then-State Sen. Vincent J. Fumo, the Democratic power broker who spearheaded legalized gaming in Pennsylvania.

State Rep. Michael O'Brien, a Philadelphia Democrat who supports Schroder's bill, said he believed gaming in Philadelphia already had reached a saturation point, with Parx to the north in Bensalem, SugarHouse in the city, Harrah's Chester to the south, and a proposed smaller resort casino in Valley Forge to the west.

"That's it. That's the market," O'Brien said. He added that the lackluster results so far for SugarHouse were evidence that the market was at its tipping point.

In November, SugarHouse reported that its 1,599 slot machines averaged $206.53 each in daily winnings. That compared with $279.25 at Parx and $242.37 at Harrah's.

If Philadelphia holds on to its second license and gets a do-over from the gaming board, local politicians, community activists, and urban planners hope that the state has learned from its mistake.

Unlike other parts of Pennsylvania, the awarding of Philadelphia's casino licenses sparked intense community and political backlash.

"The support just wasn't there," Wozniak said. "We wasted a whole lot of time, and they wasted a whole lot of money."

Taxpayers, he added, "got burned" in lost gaming revenue to reduce wage taxes.

Putting the license out to bid may correct that, he said, by placing a casino where it's wanted. "There's interest in my region," he said. "There's nothing in the center of the state."

City officials have argued that the gaming board, by deciding in 2006 that Philadelphia's two casinos would be on the Delaware River, effectively made critical land-use decisions for Philadelphia - with little input from the city or its residents.

Even if it wanted to challenge the site selection, the city had little recourse. The gaming law was written to skirt local challenges to projects by requiring that any lawsuit be heard by the state Supreme Court.

In the case of Foxwoods, just five miles south of SugarHouse, neighbors warned of untenable congestion if the project opened in South Philadelphia's commercial corridor along Columbus Boulevard.

Harris Steinberg, executive director of Penn Praxis, a project-based arm of the University of Pennsylvania's School of Design, called the process of selecting casino sites "flawed."

"It was divined by legislators to keep Philadelphia out of any decision-making," Steinberg said. Penn Praxis was not against gambling per se, but objected to suburban-style, big-box casinos blocking out prime waterfront space, he said.

City Councilman Frank DiCicco, whose district would have included the Foxwoods project, recalled having had only five minutes to present his concerns about traffic to the gaming board during public hearings in 2006. Mayor John F. Street gave DiCicco five minutes of his own allotted time so DiCicco could keep talking.

"I had to talk in double-time to try to get my message out," said DiCicco, a long-standing opponent of Foxwoods.

State Sen. Larry Farnese, a Democrat from South Philadelphia, introduced a bill in the spring that would allow the city to designate acceptable sites for casinos while having the board pick the operator. The bill did not advance, but Farnese plans to reintroduce it in light of the Foxwoods action, said Cathie Abookire, a spokeswoman for Farnese.

In 2006, the gaming board's decision to place both of Philadelphia's casinos on the waterfront fanned public debate on how the waterfront should be developed. Penn Praxis held dozens of community meetings to arrive at a "civic vision" for making the seven or so miles of riverfront more accessible to the public and linked to the rest of the city.

Alan Greenberger, chairman of the City Planning Commission, said that if there were a do-over, he hoped the gaming board would pay greater attention to the potential impact of a project on the neighborhood and traffic.

"The Foxwoods site, to this day, had a really long list of serious questions associated with its development that still have not been answered," he said.

As for a location for a second gaming house, Greenberger said he liked Market Street East - at one point considered by the Foxwoods investors as an alternative. A casino, he said, could "energize Market Street."

Meanwhile, philanthropist H.F. "Gerry" Lenfest wants to incorporate the SS United States into a casino project and recently approached the Foxwoods group about teaming up. His overtures were rebuffed.

Lenfest said last week that he would discuss a possible purchase of the 16-acre Foxwoods property on Columbus Boulevard pending the outcome of the potential appeals process.

"We're in a holding pattern just to wait and see what happens," Lenfest said after a City Hall event Monday.

Contact staff writer Jennifer Lin at 215-854-5659 or jlin@phillynews.com.