Board: Investors have no standing to challenge casino license

The state's Gaming Control Board said Wednesday that local investors in the SugarHouse Casino had no legal standing to challenge the agency's awarding of a second casino license in Philadelphia.

The board also asserted that under the state's gaming act, any challenge to its actions had to be made to the state Supreme Court, not Commonwealth Court.

On July 29, minority investors in SugarHouse filed a complaint in Dauphin County Court to stop the board from reissuing a second license for a Philadelphia casino. The group, called RPRS Gaming L.P., controls about a third of the casino and is led by Philadelphia lawyer Richard A. Sprague and auto magnate Robert Potamkin.

The gaming board said RPRS was "not harmed or aggrieved by the board's issuance" of another license and had no legal basis to file a claim.

When Pennsylvania legalized gambling in 2004, the legislature included a provision that any challenge to the actions of the gaming board would automatically go to the Supreme Court. The legislature wanted to make sure gaming was implemented as promptly as possible.

The gaming act set aside two licenses for Philadelphia. The licenses went to investors behind SugarHouse Casino and Foxwoods Casino.

SugarHouse opened in September 2010, but the Foxwoods project faced repeated delays, prompting the gaming board to revoke its license in December 2010.

On July 11, 2012, the gaming board announced that it would reissue the second license and subsequently received applications from six groups.

In its recent filing, the agency said that if the SugarHouse investors wanted to challenge the reissuing of the license, they would have had to have acted last summer by filing a complaint with the Supreme Court.

The lawsuit by SugarHouse investors represents "the very type of delay" the gaming act intended to prevent, the gaming board said in its filing.

Moreover, the gaming board said, as minority investors, the local group is not the "appropriate entity" for bringing legal action. "The board's licensee, SugarHouse, would be the appropriate plaintiff," the filing said.

The challenge to the city's second casino license comes at a critical time. The gaming board has begun an exhaustive review of each of the applicants. Public hearings on the suitability of projects are supposed to be held later this year, with a selection early next year.