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The same can be said of SugarHouse Casino, largely a so-called “box of slots” with restaurants but no hotel or significant other facilities associated with it. (A hotel and concert venue were part of its 2006 proposal, but at a May 2013 expansion petition hearing, a company official said a hotel could still be added "if demand warranted down the road.")

As such, SugarHouse has spun off little additional development in the area. It is an “in and out” location. Gamblers don’t stay around to patronize nearby businesses, since there are few to enjoy. All the money that’s been spent in developing the project, and all that is proposed to be invested, has added little to Philadelphia’s economic base because it has not done much to expand the hospitality sector. That needs to change. Whether a project is constructed with public or private funds, it should act as a catalyst for additional economic activity.

Such projects should be valued on how much they add to economic growth potential. A highway acts as a magnet for additional business and household activity. Members of Congress fight for defense facilities because they add dramatically to the local economy. Rural areas demand that their inefficient and costly post office buildings remain open because they serve as central locations for the towns. Similarly, Philadelphia officials providing input into the licensing decision and state Gaming Control Board members making the final decision all need to evaluate the next casino in the context of what it can add to the economy both locally and regionally. That does not seem to have been a major or even a minor factor in the awarding of licenses in the past. However, such an approach is critical.

The importance of creating more than a gaming location was brought to the forefront with the latest release of the Pennsylvania Gaming Control Board’s summary of slots and table game results. In the first drop on record, slots revenue fell two percent for the fiscal year that ended June 30, 2013, with the Sands Casino Resort in Bethlehem the only one of the 11 Pennsylvania casinos posting a gain. That falloff came even though the Valley Forge Casino Resort was open all year. (It was only open for three months in the previous fiscal year.) If you exclude Valley Forge, the drop was about 3.7 percent statewide. That happened even as the economy was beginning to improve. While table games revenues rose, it was not enough to offset the losses in slots revenue, meaning total casino revenues fell.

While Valley Forge Casino Resort may have cannibalized some activity in the other casinos, it also appears to have increased the total market. Still, gaming growth is slowing; there is no doubt about that. The clear implication is that spending on slots and table games has hit a plateau. Some would argue that means a second license should not be granted. We won’t know until we get the next yearly numbers whether Valley Forge added to or cannibalized activity, but it’s possible there is some potential for more growth.

Such trends strengthen the argument that any gains from a new casino are not likely to be strong if all that’s built is another “box of slots.” Thus, if a new license is to be granted, it must be for something more than just a basic casino operation. The next casino should expand the market, not simply shift demand around.

How can that be achieved? Very simply, the new project must serve as more than just a location for gaming: It must draw in visitors for a variety of hospitality-related reasons. That is a great opportunity for Philadelphia, especially given its economic base.

Philadelphia has two major economic concentrations. One is the so-called “eds and meds,” or the educational and medical sectors. The second is hospitality, which is driven by Philadelphia’s world-class museums, historical sites, restaurants and music and theater attractions. Building a resort-type casino would provide the perfect addition to the region’s hospitality sector. It would attract visitors who not only want gaming but would also be interested in visiting the Constitution Center, seeing the Phillies play, listening to the Philadelphia Orchestra, taking in an exhibit at the Museum of Art or eating at “Iron Chef” Jose Garces’ restaurants. It would add to the region’s hotel space that is needed to attract larger conventions to the underutilized Pennsylvania Convention Center.

The drive to become less dependent on gaming is the clear trend in metro areas with casinos. Atlantic City, for example, is fighting back and non-gaming revenues are rising. Indeed, the goal of the New Jersey Casino Control Commission and the Atlantic City Redeveloping Commission is to make the resort much more of a resort. Casinos in the shore town are following suit by diversifying their attractions, as evidenced by a 12-percent increase in luxury tax revenues in 2012, an all-time high, according to the state Treasury Department.

It’s clear that non-gaming revenues are becoming a more important factor and a focus of attention for Philly’s key competitor. You can also see the same trend in Las Vegas, which has been repositioning itself for years. If Pennsylvania doesn’t meet the changing patterns of demand for gaming-based locations, it could suffer the same fate of Atlantic City: faltering gaming revenues. But Atlantic City gets it and is reacting. That will put growing pressures on Philadelphia’s casinos if they don’t respond in kind.

Successfully growing the tourism/hospitality market could produce enormous returns. The Greater Philadelphia Tourism Marketing Corporation estimates that roughly 39 million visitors have an economic impact of nearly $10 billion and support 90,000 jobs. Clearly, a casino that complements tourism and creates additional reasons to visit the region will generate significant new business, jobs, income and taxes. But there have to be attractions beyond what are already available. There is no one model that can accomplish the goal of making the next casino a destination, not just a place to gamble. In the past, Philadelphia has tended to choose its big projects based on the path of least resistance. But that leads to the least long-term economic benefits for Philadelphia. It is time for a project that benefits the city’s and region’s economic potential, not what simply fits in.