Inquirer Editorial: The chips are down

An uncharacteristic note of caution has crept into the state gambling board's efforts to saddle Philadelphia with another casino. Regarding the likelihood that there is scant demand for even more gambling in the region, Gaming Control Board member Gregory Fajt said last week, "Saturation is the elephant in the room. It's something I'm personally concerned about."

Now he tells us. With SugarHouse in Fishtown, three more gambling houses in Philadelphia's suburbs, and a total of a dozen statewide, Pennsylvania now claims more casinos than Atlantic City. The seaside gambling mecca, meanwhile, has just watched one of its casinos fold, while another is in bankruptcy despite substantial tax breaks from the Christie administration.

If gambling's plummeting fortunes just an hour's drive from Philadelphia don't suggest saturation, consider the signs closer to home. Last year, for the first time since the commonwealth's casinos started opening in 2006, Pennsylvania's total gambling revenues fell compared with the year before. That included substantial declines in the take from slot machines, which makes up the bulk of casino winnings, in the Philadelphia area.

State gambling officials attribute the slump to new competition in neighboring states such as Maryland and Ohio - pressures that don't appear likely to abate soon. The same can be said for expanding opportunities to gamble legally online.

SugarHouse officials played Cassandra during the gambling board's hearings last week, suggesting prospects for the city's first casino are grim if a rival gets the go-ahead. Those warnings were transparently self-serving, of course, but independent experts have come to much the same conclusion. And even those who stand to gain the most from another casino license - the applicants - have acknowledged that they expect to cannibalize some of the other casinos' take.

But why not let another casino go ahead so the market can sort out winners and losers? Because Pennsylvania's casinos never constituted a market. Rather, they are the progeny of a government program conceived and directed by state officials.

It's not hard to imagine tomorrow's struggling casinos returning to the government that begot them in search of breaks and bailouts to save the jobs and communities that have come to depend on them. Will the legislature that created the monster then be able to turn it away? Or will Philadelphia end up with another empty building, perhaps in one of the prime Center City locations being proposed by two of the casino applicants?

For all its faults, Philadelphia is a city on the ascent. The areas being targeted for its next casino - particularly those in Center City - will probably see development even without state-sanctioned slot machines. And the gambling board has nothing to lose from at least delaying a decision to see whether the casinos' luck continues to run out.

The gambling board's Fajt said that given concerns about saturation, the city's next casino must offer more than gambling. If officials are really after something other than slots and blackjack, though, why press ahead with a casino at all?