Court dismisses suit alleging state gaming board lacks authority to re-issue former Foxwoods license

A lawsuit claiming the state gaming board has no legal right to re-issue Philadelphia’s second casino license was Monday dismissed by state Commonwealth Court.

RPRS Gaming, L.P., a minority partner in HSP Gaming, L.P., aka SugarHouse Casino, filed the suit in July 2013. RPRS alleged that nothing in the state gaming act or other legislation permits the Pennsylvania Gaming Control Board to reissue a revoked license.  The license at stake here is the one previously granted to Foxwoods Casino, then yanked by the PGCB when Foxwoods failed to build at Columbus Boulevard and Reed Street.

The gaming board filed an objection to RPRS’s suit, and then in October, the Court granted a petition to intervene filed by Tower Entertainment Group – one of the five applicants seeking the casino license that RPRS alleged the state had no authority to re-issue.

In short, Commonwealth Court agreed with the state gaming board and Tower that RPRS was creating a false distinction between issuing and reissuing a license “when no such distinction was created by the General Assembly,” states the opinion written by Judge Bernard L. McGinley. McGinley writes that the gaming board has been given the right to issue two licenses in Philadelphia and the right to revoke licenses for cause. McGinley agrees with the gaming board that since “the main goal of the legalization of gambling in Pennsylvania was to increase revenue … it is implausible that it was the General Assembly’s intent for the Board t lack the authority to issue a license that had been revoked.”

Note that the original suit was not filed by HSP Gaming as a whole. According to details in the attached court decision, RPRS brought the issue to HSP’s management committee, but HSP told RPRS that “it was having trouble reaching a consensus on RPRS’s recommendation for HSP to bring suit to challenge the Board’s authority to reissue a Category 2 license in Philadelphia … because of its concern with respect to how such a suit would be perceived by officials of the City of Philadelphia and others.”

At last year’s suitability hearings,  SugarHouse General Manager Wendy Hamilton didn’t tell the gaming board they couldn’t re-issue the second license. Instead, they said the board should opt not to, at least not now, because the market is saturated and a new Philadelphia casino would only cannibalize revenue from SugarHouse and other casinos in this part of the state.

The PGCB is expected to decide among the five Philadelphia applicants at an upcoming board meeting.

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