Second Philly Casino Faces Legal Challenges

Posted on: December 23, 2014, 06:00h. 

Last updated on: December 23, 2014, 05:08h.

Casino.org Staff Writer Read More

Expertise: Commercial Gaming.

The South Philadelphia casino that was granted a license by the Pennsylvania Gaming Control Board last month will face a number of appeals from competitors, a move that was expected by most observers as soon as the license was awarded.

Those appeals are coming both from losing bidders in the licensing process and the SugarHouse Casino, which is already operating in Philadelphia.

The new license was awarded to the Live Hotel and Casino, a property that will be located in the Sports Complex in South Philly.

Operators Greenwood Gaming and Cordish Cos of Baltimore say that the facility will be synergistic with the sports venues there, which could help retain visitors for multiple day trips to the area.

Appeals Were Expected Regardless of Winner

Even before that license was awarded, it seemed that appeals were likely regardless of who would win. SugarHouse has argued that a second casino in the city will simply take business away from them without growing the market, while there were sure to be hard feelings from losing bidders.

In the end, at least four appeals were filed: three from losing bidders and another by SugarHouse. There were a number of different arguments brought forward by those submitting the challenges, but they mostly boiled down to two points that were also brought up during the licensing process.

First, there’s the idea that the casino market in the Philadelphia area, and perhaps in the entire region, is already saturated. This argument is primarily being made by SugarHouse, as the existing casino is the one most likely to lose out should a second casino be opened in the city.

“The addition of another casino will not grow the market,” said lawyers representing SugarHouse. “Rather, it will result in the cannibalization of revenues from existing casinos to the detriment of both the Philadelphia gaming market as a whole, as well as the commonwealth.”

Eligibility of Ownership Group Questioned

The second argument, which appears to have been brought up in all four appeals in some form or another, is that Greenwood Gaming is actually ineligible to receive a casino license in the state of Pennsylvania.

This is due to the act that the company already owns and operates the Parx Casino in Bensalem; according to those appealing the decision, giving this second venue to Greenwood violates the state’s gaming laws.

“Certain individuals and entities who maintain an ownership interest in Stadium also maintain an ownership interest in Parx, which exceed the thresholds stated in the Gaming Act,” said Frank Keel, a representative of Bart Blatstein, who proposed building the Provence casino in Philadelphia’s Center City. “The Gaming Act prohibits entities that have category one licenses, that is racetracks, to even apply for a category two license, which is slot machines, and Parx owns a race track in Bensalem.”

A similar appeal was also filed in behalf of Market8, another proposed Center City Casino. The third losing applicant, PHL Local Gaming, has also appealed the casino on the grounds that the Greenwood-Cordish casino “would constitute a violation of both the letter and spirit of the Gaming Act.” PHL also believes that the board didn’t properly consider local community support or opposition of each project, or the “mandate to ensure minority inclusion as a part of the winning bid.”

The appeals were filed late last week, just in time to meet a 30 day deadline to challenge the gaming control board’s decision in the state Supreme Court.