If Philadelphia holds on to its second gaming license, the city's commerce director said Thursday, he could see building a casino as part of a hotel complex for the expanded Convention Center in Center City.

Another idea he considers worth exploring: putting a casino on the Delaware River waterfront, just north of the SugarHouse Casino in Fishtown.

After testimony before the House Gaming Oversight Committee here, Alan Greenberger, who also serves as the deputy mayor for planning and economic development, emphasized that he was only offering suggestions. But he said the city's goal should be to use a big project like a casino to spur additional economic activity.

Greenberger said that with the expansion of the Convention Center, the city will need a second large-scale hotel complex. "Could the presence of a casino of some scale enable that deal to happen?" Greenberger asked. "I'm using that as an example of taking a casino and leveraging it."

SugarHouse opened the city's first casino last September on Delaware Avenue. Investors in the Foxwoods Casino group were supposed to build a second casino on Columbus Boulevard in South Philadelphia, but they lost their license in December after repeated delays.

In the wake of the license revocation, State Rep. Curt Schroder, a Republican from Chester County who chairs the House Oversight Committee, has sponsored a bill to take Philadelphia's second license and auction it off to the highest bidder anywhere in the state.

That could bring the license back to Philadelphia - or not, Schroder explained at the hearing's start.

The investors behind the Foxwoods Casino project are currently challenging in court the state's revocation of the license.

If the action stands, Schroder proposes putting the license out to bid within 30 days.

Greenberger testified that he thinks the license will stay in Philadelphia for the simple reason that more people live in Southeastern Pennsylvania than anywhere else, making a casino here more feasible than in a remote part of the state.

In 2006, when five groups were bidding on two slots licenses for Philadelphia, the Pinnacle investor group had backed the development of a casino on 27 waterfront acres in Kensington at the former Conrail rail yard.

"Most people thought that was a pretty good site," Greenberger said after the hearing.

Greenberger told the committee, however, that whatever happens, the city needs to have more say in where a project is located. Under the current system, that power currently rests with the Pennsylvania Gaming Control Board, with limited input from city planners.

Philadelphia's budget is already feeling the impact of having only one casino.

With the revocation of the Foxwoods license, the city has been forced to revise its budget projections for the next five years, said Uri Monson, executive director of the state agency that oversees Philadelphia's finances, the Pennsylvania Intergovernmental Cooperation Authority (PICA).

He said the city originally projected a $31 million balance for fiscal years 2011 to 2015.

But without a stream of host fees from a second casino, the balance is likely to fall to just $11 million.

Monson said a second casino was expected to add a net benefit to the city budget of about $7 million a year.

He added that this year, the city's share of state funds from gaming will total $86.2 million in fiscal year 2011, which will result in a very slight reduction in Philadelphia's wage-tax rate.

But Paul Boni, a board member for the advocacy group Stop Predatory Gambling, said the financial benefits of gaming are overstated because they don't factor in the social cost of problem gambling.

Boni asked the House panel: "How much has been extracted from working people in your districts, who are now addicted to gambling because we've made it so convenient? That's the question legislators should be asking."

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