A mini-casino proposed for the Nittany Mall inched closer to a hearing that will determine its fate after the Pennsylvania Gaming Control Board heard arguments related to an opposing party’s claim that a license should not be granted.
The board on Wednesday granted Stadium Casino, which was the losing bidder at a 2020 auction to apply for Pennsylvania’s fifth Category 4 license, intervenor status as a participant in SC Gaming OpCo’s licensing hearing but denied the company’s requests for discovery. Representatives for Stadium will be permitted 15 minutes to present oral arguments at the hearing.
A date has not yet been set for the licensing hearing.
Developer and former Penn State trustee Ira 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.
But Stadium, which also filed a still-pending lawsuit in Commonwealth Court against Lubert and the board, contends that after the bid Lubert involved other parties that call into question ownership and eligibility. In January 2021, Bally’s, which currently has no casinos in Pennsylvania, announced it was partnering with Lubert on the project, and filings for the license application list SC Gaming OpCo vice presidents Robert Poole and Richard Sokolov, who Stadium suggests may have ownership interests.
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.
“If we are right, and that will be for another day, there’s no statutory authority to consider that application,” Stadium attorney Mark Aronchick said on Wednesday. “There are red flags galore that demonstrate the rightness of at least us pursuing this in an active way and with discovery.
“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. 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 OpCo attorney Stephen Kastenberg said Stadium has offered no evidence Lubert does not wholly own SC Gaming. The board, meanwhile, is not only allowed but compelled by statute and its own regulations to determine eligibility.
“Stadium is trying to put the cart before the horse and turn sort of this whole world upside down,” Kastenberg said. “It is your obligation to decide whether SC Gaming is a suitable and qualified and eligible applicant. That is the entire question that is presented. This is not some unique situation where there’s some special role that stadium should be playing.
“They are simply a sour grapes competitor raising the kind of issues the board has seen time and again.”
The board has its own mechanisms to investigate the issues raised by Stadium through its Bureau of Investigation and Enforcement and Office of Enforcement Counsel, both Kastenberg and the OEC’s Ashley Gabrielle said as they argued in opposition to Stadium’s requests for discovery.
The proposed 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. In announcing the company’s partnership with Lubert in 2021, Bally’s estimated the project would total $123 million and would take a year to complete.
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
Aronchick briefly noted that opposition during his arguments.
“There’s a public interest in what did Mr. Lubert do here,” he said. “Who’s coming in and what do they have and what’s going on? So that’s the justice [aspect of the petition].”
