Cordish Appeals Bally’s State College Casino License to Pennsylvania Supreme Court
Posted on: February 25, 2023, 02:40h.
Last updated on: February 25, 2023, 02:47h.
The Cordish Companies isn’t folding on its fight in Pennsylvania to prevent a gaming license from being issued to the Bally’s Corporation for a Category 4 satellite casino in State College near Penn State University’s main campus.
The Pennsylvania Gaming Control Board (PGCB) last month unanimously voted in favor of issuing Bally’s a Cat. 4 mini-casino license for its proposed $123 million project at the Nittany Mall. Bally’s wants to repurpose the former Macy’s anchor store into a casino with 750 slot machines, 30 table games, and a sportsbook.
Created through the state’s 2017 gaming expansion package, the Cat. 4 opportunities were awarded through a series of auction rounds. Initially limited to only the state’s full-scale casinos, the PGCB opened up the auctioning to key individual investors in slot machine licenses after the bidding went dry in March 2018.
Ira Lubert, who owns a 3% stake in Rivers Casino Pittsburgh, bid as an individual during the PGCB’s auction round held on Sept. 2, 2020. Lubert was the high bidder with a winning offer of $10,000,101.
Cordish, doing business in Pennsylvania as Stadium Casino, LLC, later confirmed that it was outbid by Lubert. Cordish qualified to present an auction tender because it operates Live! Casino Hotel Philadelphia. The company also operates the Cat. 4 property Live! Casino Pittsburgh in Westmoreland.
Cordish Petitions State Supreme Court
Pennsylvania’s 2017 gaming law said only companies holding a slot license in the commonwealth or individuals who hold key ownership positions in a slot concession qualified to bid on the Cat. 4 licenses. The law also requires that only those companies and individuals are to tender the winning amount in order to secure the licensing opportunity.
Cordish contends that Lubert violated the bidding rules by orchestrating an investment group before bidding and submitting his $10 million payment. In its appeal to the Pennsylvania Supreme Court, Cordish attorneys say the PGCB had no legal authority to move forward with Lubert’s casino pitch after he wrongfully partnered with investors before paying the licensing fee.
Lubert did not pay the entire winning bid to the Board himself, as required by … the Gaming Act. Instead, Robert Poole, Richard Sokolov, and possibly other persons or entities invested in the payment for Lubert’s winning bid,” the Cordish appeal alleged.
“Their contributions were not mere loans made in the ordinary course of business; rather, the contributions bought the investors an interest in the Category 4 license for which Lubert would have the right to apply as the winning bidder,” the argument added.
Cordish said Lubert soon after being deemed the high bidder revealed that he had created an entity called SC Gaming OpCo, LLC, and had brought on investors. SC Gaming then in January 2021 announced that Bally’s had signed an agreement with the firm to design, develop, construct, and manage the Nittany Mall casino. Bally’s was prevented to bid during the Sept. 2020 auction since it does not own a slot license in Pennsylvania.
Cordish is seeking to have the state Supreme Court overturn the PGCB’s decision to allow the Bally’s casino project to move forward.
Lubert has continually denied the Cordish allegations, calling his opponents “sour grapes.” The Penn State alumnus and former trustee has been adamant that he made the $10 million payment out of his personal bank account within 48 hours of winning the auction.
The local State College community is seemingly strongly opposed to allowing a casino at the Nittany Mall, which is less than five miles from Penn State University. Casino.org has fielded hundreds of comments and letters in opposition to the Bally’s plan and only a handful in support.
The public’s opposition, however, has little legal recourse to stand in Bally’s way. That’s because College Township where the Nittany Mall is located did not opt out of the state’s Cat. 4 bidding pool prior to the PGCB’s August 2019 deadline.
The public’s hope in keeping State College free of a land-based casino presumably rests with the Pennsylvania Supreme Court. Whether the state’s highest court agrees to review the Cordish appeal will be determined in the coming months. If the state does take up the matter, the dilemma could drag on for years.
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Last Comment ( 1 )
Thank you for this excellent update on the litigation surrounding the licensing of the Nittany Mall Casino, Devin! To amplify what is stated in the "Public Backlash" section of this article, here is an excerpt from paragraph 42 of the petition to review: "The Board received over 1,200 pages of public comments on SC Gaming’s proposal. The overwhelming majority of these comments – 672 out of the 773 written comments – expressed opposition to the proposal. In addition, petitions asking the Board to deny SC Gaming’s application that were signed throughout the public comment period received over 3,300 signatures, and were themselves accompanied by over 570 additional comments near universally expressing opposition to SC Gaming’s proposal." And this was just the public opposition to this casino that was expressed directly to the PGCB prior to the 6/12/2022 public feedback submission deadline! There are also hundreds of additional public comments opposing the casino that were submitted to College Township that are documented on College Township's Casino Information webpage -- but the Township declined to send this feedback to the PGCB because it might trigger a lawsuit against the Township by the casino developer who claims he wants to "create jobs and help the State College region’s economy grow." There are hundreds of comments opposing the casino that were submitted to the Penn State Board of Trustees that are documented on Penn State's Trustees webpage for their 9/23/2022 meeting -- but Penn State also never sent these comments to the PGCB. And there are still more hundreds of comments opposing this casino that were submitted to casino.org that you covered in your excellent article of 1/23/2023. After being ignored by the commissioners at the PGCB, the public's hopes in this case now indeed rest with the Pennsylvania Supreme Court.