Parx Casino Eyes Hotel Takeover Amid State Gaming Regulation Changes

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In a significant shift in their expansion strategy, Parx Casino — the largest revenue-generating casino in Pennsylvania — has announced plans to acquire an existing hotel, rather than constructing a new one, as part of its property in Bensalem, just north of Philadelphia. The move comes as the casino, owned by Greenwood Racing Inc., navigates a delicate state judicial situation involving the proliferation of skill-based gaming machines across Pennsylvania.

Parx’s strategic change was prompted days after the Pennsylvania Supreme Court made it public that it would be assessing the legality of these skill games—gaming machines that highly resemble slot machines—that have been installed in numerous local businesses within the state. The casino stressed that the court’s decision would have a critical impact on its progression with the development of a luxury 300-room hotel and an events center, a project valued at approximately $100 million.

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A change of course was, thus, deemed necessary by Greenwood, with the focus moving from new construction to the acquisition of the Inn at Fox Chase, a 167-room property located across from the casino. The property was sold a year ago for $13.75 million, but exact details about Greenwood’s transaction have not been disclosed. The Inn at Fox Chase holds a solid 3.8-star rating out of 5 on Google, showcasing a respectable reputation within the local hospitality sector.

The pending Supreme Court review will focus on the claims by the state Attorney General, Michelle Henry, that the skill games in question are unauthorized forms of gambling. Lower courts, however, have ruled that skill games cannot come under regular gambling legislation, as players’ ability to influence the payout through their skill reduces the reliance on chance. While supporters of skill games argue that the revenue they generate played a key role in managing pandemic-related financial struggles and keeping up with the increasing inflation, opponents such as traditional brick-and-mortar casinos insist that these unregulated and untaxed machines are illegal and pose a threat to their business.

Marc Oppenheimer, Parx’s Chief Marketing Officer, confirmed to the Philadelphia Business Journal that the prevalent uncertainty surrounding skill games was the primary reason for the pause in their ambitious hotel project. He stated, “Until we have greater clarity on those things, we weren’t comfortable making a nine-figure investment.”

The hotel acquisition marks a new chapter for the Parx Casino. Plans are already in place to refurbish the Inn at Fox Chase, including a complete makeover of the topmost floor to facilitate luxury suites. The lower floors, already recently renovated along with the reception area, will remain open to patrons with existing reservations throughout the refurbishment period. Additionally, current employees of the hotel will have the opportunity to maintain their positions under the new management.

Last year, Parx reported a hefty gross gaming revenue (GGR) of $588.2 million from its physical casino operations, supplemented by an additional GGR of $58.3 million from its online operations, leading the state’s casino industry. The casino’s bet operations also retained a considerable $17.4 million of punters’ wagers. The imminent conclusion of the hotel acquisition this week underscores Parx’s commitment to growth and diversification, and the casino’s long-term drive to enhance its presence and services continues unabated since its inception in 2006.