Caesars Harrah’s Philadelphia Under Fire for Racetrack Conditions

Nobody ever said running a casino conglomerate was easy. Whether facing budget deficits, collapsing partnerships, or regulatory scrutiny, the CEO of any major casino company better have a firm grip on ways to keep calm and carry on, as the modern vernacular says.

And Caesars Entertainment Corp. has certainly experienced more than its fair share of all of the above: whether carrying the largest debt load of any casino business in history, walking out on a potential Suffolk Downs alliance in Massachusetts, or getting taken to task by that state’s Gaming Commission for a six-degrees-of-separation alleged connection to someone who the commish didn’t see as entirely kosher.

Shape Up or Else

Now you can add “potential casino closure” to that list of dreaded happenings, after Pennsylvania authorities shut down Harrah’s Philadelphia‘s adjoining harness race track due to unresolved issues with the track’s racing surface. And with just a little over a month before the track’s 2014 official racing season begins on March 8, this would be a closure of no minor inconvenience.

Even more problematic is the reality that Pennsylvania gaming regulators could shut down the casino itself if the racetrack issues are not put to bed.

The suburban Philadelphia-area racetrack’s problems started when the Pennsylvania Harness Racing Commission suspended the casino’s racing activities, noting that the company had not only failed to resolve the track surface issues, but had consistently missed opportunities to tell racing commissioners how they plan to resolve the problems.  A racetrack must have a  “written live racing agreement with a horsemen’s organization” in order to keep their gaming license valid, according to Pennsylvania law.

After a serious crash resulted in a track driver being tossed out of sulky and subsequently trampled by another horse when he hit the ground, drivers started to post complaints about the track conditions with racing authorities. Now the Harness Racing Commission – which operates under the auspices of the Department of Agriculture – has threatened to suspend the entire 2014 racing season until they get more concrete information on the issue from the track’s management.

More Fines for Violations

This isn’t the only problems Harrah’s Philadelphia has been facing of late, either. At the start of the new year, the casino was fined $90,000 by state regulators – $70,000 for credit issuance violations and $20,000 for allowing an underage woman to enter, gamble on slots, and drink alcohol in April 2013. The credit violations revolved around a lack of protocol for regulations and internal controls that occurred between July 2010 and January 2013.

As far as the racetrack issues are concerned, while Caesars Entertainment senior vice president Jan Jones said in an email the “issue will be resolved,” the Pennsylvania Gaming Control Board’s spokesman Doug Harbach says they are still watching and waiting, and “will continue to monitor the matter closely.”

There’s a lot at stake in the matter; as one of Caesars Entertainment’s Eastern Division properties (included with their four Atlantic City casinos) Harrah’s Philadelphia ranked #4 out of 12 of Pennsylvania’s casinos, pulling in $310.87 million in gaming revenues last year. The Chester, Pennsylvania casino’s racetrack is one of five that are licensed in the state.