The Pennsylvania Gaming Control Board voted 6-1 in quick and decisive fashion after more than a year of threatening to revoke the license it initially awarded four years ago.
INTERACTION: Agree with Foxwoods decision?
It was the first time the gaming board has revoked a $50 million casino license in its six-year history, and its decision seemed to stun both opponents and backers of a newly hatched plan featuring casino giant Caesars Entertainment Corp. as a major partner.
"I was shaking and crying, I couldn't believe they actually did the right thing," casino opponent Mary Strumpf of Philadelphia said through tears after the vote.
Fred Jacoby, a lawyer for the investor group that held the license, said he was surprised that the board overlooked the importance of Caesars' involvement.
"I was shocked, I really didn't expect to see revocation," he said.
The gaming members did not say why they voted to revoke the license, and they will issue an explanation in the coming weeks. After that, the investor group can bring a lawsuit to a state court to try to win back the license, but Jacoby could not say whether a lawsuit is a certainty.
If the gaming board begins taking new bids on the license, which is restricted by law to Philadelphia, considerable interest is anticipated from players including international casino magnate Steve Wynn, Caesars and Donald Trump's casino company.
"I do think there will be considerable interest, especially now that Pennsylvania has (legalized) table games at a very competitive (tax) rate," said Joseph Weinert, senior vice president of New Jersey-based industry consultant, Spectrum Gaming Group.
The vote followed weeks of scrambling by the project's backers and Caesars to assemble new financing for the $275 million project, negotiate a new ownership structure and overhaul the original, grander design plans. It also had sought to push the deadline for opening the casino from May 2012 to December 2012.
But it could not show that it has committed financing for the entire project, which would operate under Caesars' Horseshoe brand. And the group could not show that it had the concrete plans to develop the project past its initial, box-like stage.
The confidential paperwork the group submitted in recent days to gaming board investigators was incomplete and vague, the agency's top enforcement lawyer, Cyrus Pitre, told the board. More negotiations would be required, more conditions would have to be satisfied and hang-ups could still doom the project, despite the backers' description of it as a definitive agreement, Pitre said.
"They have their opinion of it, I have my opinion of it. I don't think it's a definitive agreement," he told the board. "We're looking at as late as May (2011) before we may have this whole thing complete."
The group that originally won the license included the Connecticut Indian tribe that owns Foxwoods Casino in that state and the charities of three wealthy businessmen, Lewis Katz, Ron Rubin, and Ed Snider, all of whom have longtime ties to Gov. Ed Rendell.
They won one of two licenses set aside for Philadelphia in a five-way derby, beating out Trump, Pinnacle and Planet Hollywood.
However, the project stalled in the face of local opposition and the tribe's financial problems, even as 10 other casinos opened around Pennsylvania since late 2006.
Originally, the partnership planned to open with 3,000 slot machines in late 2008.
But the Philadelphia City Council opposed the Foxwoods location and tried to stall construction by withholding approval of necessary zoning changes. When Foxwoods flirted with changing the location off the waterfront and into downtown Philadelphia, the gaming board ordered it back to its original property and last year began threatening to yank the license.
The Foxwoods group had faced daily fines of $2,000 - more than $700,000 to date - since failing to meet a Dec. 1, 2009, deadline imposed by the gaming board to provide information about its financing, design and construction.
As the Mashantucket Pequot tribe's financial woes mounted, the group began scaling back plans for the casino and searching for another major investor.
It found one: Wynn, who mysteriously pulled out in April, less than two months after pledging to rescue the project. Caesars surfaced earlier this fall as the third major casino operator in four years to take an interest in it.
