On Wednesday, 9th August, the Pennsylvania’s licensing and regulatory agency responsible for overseeing gambling industry in the state, approved that the applicants behind the Stadium’s proposed casino project in Philadelphia are compliant with the state’s law and meet all the ownership requirements.
On Wednesday, the board ruled out that the proposed second casino project in Philadelphia is within the law and there is no actual setback for awarding a license to the casino operators. The board voted unanimously that the proposed ownership structure does not violate the law in any way.
The casino project is a joint venture between The Cordish Companies and Greenwood Gaming & Entertainment, and namely the participation of the latter appeared to be the stumbling block. Greenwood Gaming & Entertainment is a company owned by the affluent businessman Watche “Bob” Manoukian, who owns 85.84% interest in another casino, which violates the state’s law.
Under the Pennsylvania’s legal code, the owner of one casino is not allowed to hold more than 33.3% shares of another. The joint venture for the opening of a second casino in Philadelphia is known under the name Stadium LLC. In 2014, the bidder appeared to be among the favorites for winning a casino license.
But the aforementioned ownership controversy ruffled the feathers of other casino-license applicants, including SugarHouse and Market East Associates who challenged the board’s decision, explaining that Manoukian’s interest had not been adequately evaluated.
This brought the case to the Supreme Court, which sent it back to Pennsylvania Gaming Control Board for a second check. After a two-fold close examination of the process, the board reaffirmed its previous ownership ruling that Mr. Manoukian does not violate the law in any way.
Prior to the board’s ruling, Mr. Manoukian stated that he will transfer a part of his shares in the second casino project to a trust for the benefit of his 3 sons. After the transfer, the businessman said that his shares in the joint casino venture will total 28.33%. In that way, the businessman will not exceed the state’s ownership cap.
After the board’s decision, Cyrus Pitre, chief enforcement counsel for the board explained that the license will be issued only when the board is sure that the transaction of shares is finalized. The board is to issue a written document, which will reflect its opinion on the matter. After that, the opponents of the decision are allowed to file appeals within a period of 30 days.
It is expected that the decision will unleash a hail of negative reactions, as the attorney Richard Sprague, representing the Sugarhouse casino already shared his intention to challenge the board’s decision. Nevertheless, the applicants behind the Stadium’s proposed casino project see the board’s decision as another move onward, even though not there yet.