Judges toss SugarHouse suit seeking to kill off 2nd casino license

THE COMMONWEALTH Court yesterday rejected a lawsuit from some SugarHouse Casino investors who claimed the state Gaming Control Board does not have the authority to reissue a second casino license here.

The investor group, led by attorney Dick Sprague, insists the 2004 state law that allows casinos gives the board the authority to issue licenses but not to reissue licenses revoked from others.

Sprague yesterday said he will appeal the ruling to the state Supreme Court.

"I look upon the Commonwealth Court just as a halfway station to the Supreme Court," said Sprague, who has 30 days to file an appeal. "We'll appeal more quickly than that."

The Gaming Control Board argued in legal pleadings that the investors' "interpretation is clearly contrary to the goals" of the state's casino law, according to yesterday's ruling.

Three Commonwealth Court judges agreed with the board's argument that the law was meant to raise the "largest possible source of revenue" by granting every license intended to be issued.

The judges also agreed that the investors' interpretation would mean every casino in the state "will either stay in business forever" or the number of casinos will eventually shrink.

The judges also took note of a $36 million loan the state made to help the board, the state Department of Revenue and the State Police with startup costs to regulate the new casino industry.

The 14 casino-license holders will pay back that loan once all of the licenses are granted.

Philadelphia's successful applicant and the winner of a license in Lawrence County will be the final two licenses to be granted.

Bart Blatstein of Tower Investments, one of five applicants for the city's second casino license, also objected to the SugarHouse lawsuit. The judges accepted his arguments, which were similar to those made by the board.

Sprague's group of investors, known as RPRS Gaming LP, control 33.65 percent of SugarHouse. High Penn Gaming LP, controlled by Chicago billionaire Neil Bluhm, is the majority owner with 66.25 percent.

The Gaming Control Board awarded casino licenses in December 2006 to SugarHouse and a group of investors known as Foxwoods, who planned a casino on Columbus Boulevard in South Philly. The board revoked the Foxwoods license in December 2010 after that group failed to move their project forward.

Richard McGarvey, spokesman for the Gaming Control Board, said the lawsuit had no impact on the board's "continued deliberations" about the five applicants for the Philadelphia license.

"The Board is continuing its deliberations of the applicants and all of the supporting materials for each in an attempt to achieve a qualified majority vote in support of a single applicant," McGarvey said in an email.