Steve Wynn does not venture lightly into offbeat casino-gaming jurisdictions. He didn't bother taking a shot at Singapore. The head of Wynn Resorts (WYNN) called his brief courtship with a slot-machine palace at Aqueduct Race Track "temporary insanity." And he eschewed Pennsylvania, even when his archenemy on the Vegas Strip, Sheldon Adelson of Las Vegas Sands Corp. (LVS), opened a casino there.

But this year, Pennsylvania legislators legalized table games like blackjack, craps, and roulette. And suddenly, Wynn was all over it. On Wednesday, he attended a hearing to discuss partnering with the Mashantucket Pequot Indian tribe, which owns the Connecticut casino Foxwoods, on a stalled casino project in Philadelphia -- an hour from Atlantic City.

On a quarterly conference call days earlier, Wynn cooed about the South Philly location's proximity to "all my old friends -- the Italians and Jews and every conceivable type of ethnic group that likes to play craps." He vowed to open "the cutest casino you've ever seen" near the "dandy" Walt Whitman Bridge.

Wynn later revealed a $600 million budget for this proposed casino: a fraction of the cost of erecting one of his Vegas operations. It won't have a hotel; instead of the luxury amenities that serve as profit centers on his Strip properties, the Philly casino will focus strictly on gambling.

Foxwoods Fumbles

The Mashantucket Pequot tribe has been trying since 2006 to launch a Philadelphia operation, but for reasons financial and organizational, they have been unsuccessful, and are in danger of having their unused license revoked. Pennsylvania is penalizing the tribe $2,000 per day for tardiness, until Foxwoods gets its act together.

There are two reasons why it makes sense for Wynn to wrest a controlling interest in the casino. One is the taxation on the newly permissible table games. Slots in Pennsylvania run at a pre-tax 60% margin, but table games will run at a 25% margin. Pennsylvania's dual-rate structure is unique in the U.S., and table games tend to be less profitable on a per-bet basis (though they usually generate more money per bet).

The combined rates leaves Pennsylvania with the fourth-lowest casino tax in the United States, says Larry Klatzkin, a gaming analyst with Chapdelaine Credit Partners. "This would serve Steve Wynn well, given his high success rate with table-game high rollers," Klatzkin wrote in a recent report. "This tax rate plays to his sweet spot."

Secondly, Wynn, who once had a Golden Nugget casino in Atlantic City stands to gain from being back on the East Coast. "From past experience, he knows how strong his brand here is," says Harvey Perkins, senior V.P. of Spectrum Gaming Group, an international gaming consultancy. "Philadelphia will allow him to create a portal for cross-marketing customers in the Northeast and bringing them to his properties in Las Vegas, which is the lowest-taxed place for casino gaming."

The Philadelphia Story

And being in Philadelphia, of course, gives Wynn the opportunity to compete against his nemesis, Adelson, who owns the Venetian and Palazzo resorts. He and Wynn publicly engage in the kind of personal sniping you rarely see in corporate Vegas: a mundane spat over customer parking, a dust-up over who owned the tallest casino, even a petty dispute at their synagogue. Last year, after Adelson reportedly lost 95% of his $28 billion net worth, Wynn sarcastically called him a "master of the universe."

Whether Wynn gets licensed in Philadelphia is uncertain. In making his appeal on Wednesday, Wynn was greeted by a busload of cheering union workers -- and protesters who insist that he wants to do nothing but bilk money from folks with gambling weaknesses. During the proceedings, Wynn, a University of Pennsylvania graduate and the son of a parent with a gambling addiction, declared, "I feel like I'm coming home in Philadelphia." Wynn is due to present his plans for the project formally on April 26.

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