In the final public hearing for the licensing of the Nittany Mall Casino, the Pennsylvania Gaming Control Board (PGCB) voted today to grant the Category 4 license to Ira Lubert’s casino development company, SC Gaming OpCo, and Bally’s.
The state’s fifth Category 4 PA casino license comes two and a half years after Lubert won an auction to apply with a $10 million bid. The $127 million casino project is planned for the 94,000-square-foot former Macy’s property at the College Township mall.
This will dismay hundreds of concerned Centre County citizens who think gambling should stay away from Penn State University Park. No public comments were heard during this hearing, which was live streamed on the PGCB website.
Ira Lubert and Bally’s application deemed suitable
Lubert’s attorney explained that there has been overwhelming support from the local community, but that the majority of the opposition has come from individuals who simply oppose gambling in general. He also pointed out that many of those opposing only do so because of a fear of increased crime, a concern that’s been disproved.
Cyrus Pitri, Chief Enforcement Counsel with the Office of Enforcement Counsel (OEC), requested that the board move forward in their consideration of this application.
“There is nothing unsuitable by the application,” Pitri told the board. “Any future ownership cannot occur unless a petition is filed with this board and this board approves that petition. Anything else jeopardizes the application; it jeopardizes the license.”
Cordish Companies, the competing casino developer, challenged Lubert’s claim to the license for the proposed casino at this hearing.
Cordish argues against Category 4 PA casino license
Cordish’s attorney, Mark A. Aronchick, contended that the gaming board should not consider the application because Lubert allegedly transferred ownership stakes in the casino to undisclosed, unlicensed investors in violation of the state’s gaming act.
“We have a statutory right that the General Assembly gave us as the second bidder to challenge what happened with the first bid,” said Aronchick. “That’s a statutory right; it’s not sour grapes. The General Assembly wants people in our position to make those challenges.”
Aronchick objected to it being confidential to look at the transaction documents that Lubert entered into. The board denied their motion to other data.
Aronchick also objected to the board giving notice of this hearing two weeks ago. He said:
“We didn’t know there was going to be a hearing today until two weeks ago. And then we got together this expert report that we submitted on Monday. Everything submitted on Monday was moved into evidence.”
The board ruled that the report was not timely. “That’s not fair, that’s not right,” said Aronchick. “You could easily have managed a response.”
He argued that the board does not have the discretion to decide their own jurisdiction unilaterally. Aronchick continued:
“Respectfully, you do not. It is an abusive discretion, a gross abuse. It violates our statutory rights. It violates due process. It’s unprecedented, and it’s not what the General Assembly intended.”
SC Gaming claims PGCB has statutory authority
Stephen Kastenberg with Ballard Spahr LLP, SC Gaming’s attorney, said although his colleague (Aronchick) “has been fond of repeating today and last month that this is a jurisdictional and a statutory authority question for the board, it is not. You will have the statutory authority to consider, deny and approve licenses. That’s your statutory authority.”
He said they agree with the decision of the board not to consider the expert report.
Bally’s partnered with Penn State alumnus and former university trustee Lubert. The alliance was made soon after he won the PGCB September 2020 auction for a Category 4 satellite casino. Lubert outbid Cordish, which operates two casinos in Pennsylvania — Live! Casino Hotel Philadelphia and Live! Casino Pittsburgh.
Lubert and Cordish qualified to participate in the September 2020 auction because they held ownership stakes in a slot machine license in the Commonwealth. Lubert owns a 3% stake in Rivers Casino Pittsburgh.
Lubert’s competitor can appeal to the Pennsylvania Supreme Court
State College resident Andrew Shaffer said it is still possible for Lubert’s competitor to appeal the PGCB’s granting of the casino’s license to the Pennsylvania Supreme Court, and they do not believe the license can be issued until the appeal process has been completed.
“It is also possible that the Commonwealth Court will overturn the PGCB’s granting of the license as a result of the parallel court case that is still ongoing,” he said. “However, if the casino’s development does move forward, Lubert’s team reports that construction of the casino is expected to take about 12 months.”
Not everyone happy with the PA casino license approval
Shaffer told PlayPennsylvania the PGCB commissioners made no mention of his community’s opposition to the casino during the hearing and was dissatisfied that statements by Lubert’s team to the effect that the State College community and their local area leaders were strongly in support of the casino were allowed to go into the record unchallenged.
According to Shaffer:
“Our community had no one in today’s hearing to represent us — precisely because the PGCB closed the public comment period seven months ago. They ignored the comments that were submitted before then, and they refused to allow public comment at this meeting.”
At this point, it appears the Bally’s Casino is on track to become the fifth and final mini-casino to open in Pennsylvania. The fourth one, Parx Shippensburg, is readying for a grand opening on Feb. 3.
