Big win for a 2nd Philly casino: SugarHouse drops its objections

Casino03
Newest rendering of Stadium Casino LLC’s proposed Live! casino and hotel in South Philadelphia.

It’s a go. After a three-year legal wrangle, SugarHouse Casino has dropped its effort to block a second Philadelphia gaming license, paving the way for Stadium Casino LLC to build its Live! hotel and casino in South Philadelphia.

SugarHouse dropped its appeal of the licensing decision after Gov. Wolf signed a bill Monday repealing the 2004 ownership restriction on casinos, an action that rendered objections to Stadium Casino’s license “moot,” lawyers for SugarHouse said in a petition to the state Supreme Court. Going forward, casino operators will not be prohibited from owning two or more in the state.

The legislation signed by Wolf also authorizes a major gaming expansion in Pennsylvania to include internet gambling, interactive gambling parlors in airports including Philadelphia International, and video gaming terminals in certain truck stops.

In addition to SugarHouse, the broader Philadelphia region is home to four of the state’s 12 currently operating casinos: Parx Casino and Racetrack in Bensalem, Harrah’s Philadelphia in Chester, Valley Forge Casino and Resort in Upper Merion Township, and Sands Casino Resort in Bethlehem.

“The board considers the licensing decision now final and unappealable,” said Doug Harbach, a spokesman for the state Gaming Control Board. “Thus, we have notified Stadium Casino that the fee of $50 million for its slots machine license is due Nov. 15.”

“We are thrilled to be teed up to build the hotel and casino. Our site is one of the premier locations in the U.S. for a truly upscale casino with world-class amenities,” said David S. Cordish, chairman and CEO of Cordish Cos. of Baltimore, an investor in the Stadium Casino joint venture. He said construction will commence next year near the city’s sports complex, with the opening planned for 2020.

Proposed for Philadelphia’s Live! hotel and casino will be a $600 million, 200,000-square-foot complex, with 200 hotel rooms, 2,000 slots, and 125 table games. Cordish Cos. operates two casinos in Florida and one in Maryland. It also owns and operates Xfinity Live!, a dining and entertainment venue near the South Philadelphia stadiums.

After the Gaming Control Board selected Stadium Casino LLC to build Philadelphia’s second casino at 900 Packer Ave. in November 2014, Market East Associates, a losing bidder, and SugarHouse, the city’s first casino, appealed, delaying the project.

Their appeal challenged the scope of businessman Watche “Bob” Manoukian’s financial stake in the city’s second casino. Manoukian owns an 85.84 percent interest in Parx.

In June of this year, the state Supreme Court sent the license appeal back to the gaming board for a second evidentiary hearing, and on Aug. 9, the board gave the OK — again — to Stadium. Manoukian would not hold a financial interest in Stadium Casino that exceeded 33.3 percent, the board said, and Stadium was in full compliance with the state Gaming Act.

Manoukian said he would transfer $34 million to a trust for his sons, who would own a portion of the proposed South Philadelphia casino. He added that he would fund the rest by “irrevocable and outright gifts,” and that he had no monetary right or claim or investment in the trust.

Greenwood Racing, Manoukian’s company, is in a 50-50 partnership with entities controlled by Cordish Cos. in the Stadium Casino venture.

Market East Associates did not appeal the gaming board’s Aug. 9 decision. SugarHouse and its lawyers at Sprague & Sprague filed a “petition for review” on Sept. 7, asking the state Supreme Court to vacate the gaming board’s August order — the appeal that now has been dropped.

In addition to the issue of multiple casino ownership, the legislation signed into law by Wolf on Monday removed requirements in the 2004 law that gamblers at the state’s two resort casinos — Valley Forge and Lady Luck Casino Nemacolin near Pittsburgh — must either be guests, buy memberships, or use the facilities’ amenities to gamble.

Valley Forge paid a $1 million fee to the state Department of Revenue this week to open its casino to the public at no cost.

“We are thrilled to be able to welcome our guests to our casino in the same manner as the other Pennsylvania casinos,” said Valley Forge Casino Resort president and CEO Eric Pearson. The casino plans to add up to 250 slot machines and up to 15 poker games, according to a release from the company.

Expansion of gaming in Pennsylvania took effect immediately and permits 10 new “mini” casinos. An auction process will run from Jan. 15 to July 31. Initial bidders must already operate one of the state’s 12 licensed casinos.

The new “minis” will be allowed 300 to 750 slot machines and 30 table games. Operators can open casinos near their current gaming halls, but they must stay 25 miles away from the nearest competing casino.

Back in February 2013, six applicants made pitches before the Gaming Control Board to build Philadelphia’s second casino. The proposed locations were in Center City, along the Delaware River waterfront near Port Richmond and Fishtown, on North Broad Street (at the former home of the Inquirer, Daily News and Philly.com), and at three sites in South Philadelphia.

Since 2010, SugarHouse has operated the city’s only casino near the Delaware River and I-95.

A Second Casino
for Philadelphia

Now that SugarHouse has dropped its objections to Stadium Casino LLC, plans can move forward for Live! hotel and casino, located near Citizens Bank Park.
Staff Graphic