The Pennsylvania Gaming Control Board will hold a hearing in Harrisburg this week to determine whether to award a license for the proposed mini-casino at the Nittany Mall, but that doesn’t necessarily mean the saga is coming to an end.
A hearing for SC Gaming OpCo’s category 4 license application is scheduled to open the board’s meeting at 10 a.m. on Wednesday. Later in the agenda, the board will have the opportunity to vote on whether or not to approve the license for SC Gaming, which is owned by investor and former Penn State Trustee Ira Lubert.
It will likely be the board’s final hearing on the license application, unless it decides it needs additional information, PGCB spokesperson Doug Harbach said. The board can also defer the decision to a later date
“I would say generally speaking in the regular process of things this is the final hearing in the licensing process,” Harbach said.
But even if the board does approve the license, SC Gaming will have other hurdles to clear before it can move forward.
Three parties will present arguments during the hearing: SC Gaming, the PGCB’s Office of Enforcement Counsel and Stadium Casino, which was the losing bidder for at a 2020 auction to apply for Pennsylvania’s fifth Category 4 license and which was granted intervenor status to contest the license approval.
While Stadium, which contends ownership questions make SC Gaming ineligible for the license, was granted intervenor status at a PGCB hearing in December, the board denied discovery. Stadium will be permitted 15 minutes for oral arguments, but cannot call any witnesses.
If the license is granted, Stadium can appeal the decision directly to the Pennsylvania Supreme Court, according to a provision in the state gaming law. The PGCB cannot issue the license until the appeal process has been resolved.
Stadium also has a parallel lawsuit pending in Commonwealth Court contesting the legality of awarding SC Gaming the license. At the hearing in December, Stadium attorney Mark Aronchick suggested the lawsuit could drag out over several years.
If it is awarded the license and survives the appeal — no casino license decision in Pennsylvania has been overturned on appeal to date — SC Gaming would then have to decide whether to wait for resolution of the lawsuit before commencing with construction on the casino in the former Macy’s property at the College Township mall.
The Proposed Casino and Stadium’s Opposition
Lubert won the 2020 auction with a $10 million bid and subsequently formed SC Gaming OpCo as the company that would apply for the license and own the casino. State law for Category 4 casinos requires bidders to have ownership in existing casinos in Pennsylvania, and Lubert was eligible because of his ownership interest in Rivers Casino Pittsburgh. Subsequent filings for the license application list among SC Gaming’s vice presidents local developer Robert Poole and Penn State Trustee Richard Sokolov, who Stadium suggests may have ownership interests.
In January 2021, Bally’s, which does not have any casinos and was not eligible to bid on the license, announced it was partnering with Lubert on the estimated $123 million casino project. The casino would have 750 slot machines, 30 table games and sports betting along with a restaurant and bar, entertainment venue and a multi-outlet quick-serve food and beverage area.
A management company license for Bally’s Pennsylvania is also on the PGCB agenda for Wednesday.
Lubert, Stadium argues, piggybacked into the venture parties who would not be eligible to bid, and if that’s the case the company says the Gaming Control Board does not have statutory authority to consider granting the license to SC Gaming OpCo.
“Between the bid and the application Mr. Lubert brought in a number of other interests on this project and they are people clearly who have interests that need to be looked at carefully as ownership interests,” Aronchick said at the December hearing. “Because if they are ownership interests they weren’t allowed to bid they shouldn’t be in this project and this application shouldn’t be considered.”
If SC Gaming OpCo were not eligible, Aronchick said, the statute calls for the bid to be awarded to the second highest bidder or a new auction held.
Lubert, however, has argued in filings that he is the sole owner SC Gaming OpCo and, in response to Stadium’s claim that Poole and Sokolov may have contributed to the bid payment, says he paid for the bid with his own funds. SC Gaming attorney Stephen Kastenberg said in December that Stadium has offered no evidence Lubert does not wholly own SC Gaming.
Kastenberg characterized Stadium as “a sour grapes competitor.”
Supporters of the casino have argued it will provide a new entertainment venue to revitalize the College Township mall and an economic boost with approximately 400 jobs and millions in tax revenue.
Opponents have been vocal about their worries of increased crime, negative effects on other businesses and gambling addiction and have unsuccessfully urged College Township Council and Penn State leaders to object to the licensure approval. About 3,300 people signed a hard copy petition and online petition against the casino.
The public comment period closed in June 2022 and no public comment will be heard during Wednesday’s hearing, which will be live streamed on the PGCB website.
