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 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.
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 says he made the $10 million payment out of his personal bank account within 48 hours of winning the September 2020 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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