The gambling arm of Morgan Stanley is expected to announce the hiring of Kevin DeSanctis, the president and chief operating officer of Penn National Gaming Inc., to operate its proposed $1-billion-plus casino project in Atlantic City.

DeSanctis, 53, considered a key strategist behind Penn National's explosive growth, announced in late July that he would leave the firm by year's end to form his own gambling company, called Revel Entertainment. Three people knowledgeable about the negotiations say Revel beat out other contenders to operate the Morgan Stanley casino, including Hard Rock Casinos.

"It's a done deal," said a person familiar with the discussions. "It will be announced within days."

A Penn National executive said yesterday that DeSanctis was in the process of signing his severance package to formally end his ties with the company.

DeSanctis did not return calls yesterday seeking comment.

DeSanctis, a longtime Atlantic City veteran, worked at Donald J. Trump's casinos there in the early 1990s.

"Kevin is excellent," Trump said yesterday of the prospect of DeSanctis' running a casino in the resort, where last year's gambling revenue topped $5 billion for the first time. "They couldn't pick a better man."

Morgan Stanley Gaming Cos. Holdings, a subsidiary of the Wall Street firm, made a significant investment in the Trump Atlantic City casinos last year after Trump's casino company emerged from bankruptcy. Trump's casinos received a $500 million line of credit from Morgan Stanley to make upgrades and for Trump to expand his gambling business into other markets, including Pennsylvania.

Michael Garrity, director of Morgan Stanley Gaming, would not comment on DeSanctis' hiring. In a previous interview, he said that Morgan Stanley was the financial sponsor of a project to build a casino on a 20-acre parcel in the city's South Inlet section and that the company would be bringing in an experienced casino operator.

Among the names that surfaced in the spring was Hard Rock Casinos. While Revel Entertainment would be the operator, Morgan Stanley may still use Hard Rock as the brand for its casino, according to a person familiar with plans for that site.

A Hard Rock executive confirmed earlier this week only that talks were ongoing with Morgan Stanley.

DeSanctis previously was chief operating officer at Sun International Hotels, where he oversaw operations for the Mohegan Sun Casino Resort, Resorts International Casino & Hotel, and Paradise Island.

He also worked at Mirage Resorts and Hilton Hotels in Las Vegas.

DeSanctis joined Penn National of Wyomissing, Pa. - which operates casinos, racetracks, racinos and riverboat casinos in 13 markets - as the No. 2 executive, behind chairman and chief executive officer Peter M. Carlino in February 2001. The company's stock price has soared since then.

Many have credited DeSanctis as one of the keys behind the company's growth. Penn National became the world's third-largest gambling company after acquiring riverboat casino operator Argosy Gaming Co. of Illinois for $2.2 billion in September 2005.

Spurred by the success of its Charles Town, W.Va., racino - which last year posted revenue of $440 million - Penn National is building a similar racetrack with slot machines in Grantville, just outside of Harrisburg, which is scheduled to open late in 2007.

When his departure from Penn National was announced July 27, DeSanctis said he intended to pursue other opportunities within the industry through his new company.

"I will be establishing this entity," he said, "so I can invest directly as a principal shareholder and apply my 25 years of experience in managing and developing gaming properties."


By Suzette Parmley
Inquirer Staff Writer

© 2006 Philadelphia Inquirer and wire service sources.