A Pennsylvania mini-casino’s sports betting license caused a $10 million game of chicken. But in the end, eager to enter the state’s sports betting market, the operator wrote a check with a lot of goose eggs.
Stadium Casino LLC, an affiliate of The Cordish Companies, fought the Pennsylvania Gaming Control Board in Oct. 2019 over forking over $10 million in licensing fees for Live! Casino Pittsburgh. Cordish had already paid the hefty fee for a sports betting license for Live! Casino Philadelphia and was hoping that the mini-casino in Westmoreland would be covered as well. A weird voting structure officially nixed that hope in April 2020.
At the recent July 14 PGCB meeting, Cordish agreed to pay the $10 million fee for online sports betting. The following day, Fubo Gaming announced it had struck a market access deal with The Cordish Companies to bring sports betting and iGaming to Pennsylvania.
A high stakes game of chicken
Live! Casino Pittsburgh, a mini-casino in Westmoreland, opened in Nov. 2020. A few months later, the $700 million Live! Casino Philadelphia opened in Feb. 2021.
Cordish argues against paying extra $10 million
During an October 2019 PGCB meeting, Stadium Casino petitioned the board for a sports wagering license and the necessary approvals to conduct sports betting at both casinos which were still under construction at the time.
The main point of contention was the $10 million licensing fee for sports betting which Stadium believed they should not have to pay for each casino.
Mark Stewart served as legal counsel for Stadium Casino during an Oct. 2019 presentation before the board.
“The notion that there is some public benefit from that is really a mirage,” said Stewart. “You would have a Category 4 Casino (Live! Pittsburgh) paying the same amount, $10 million, as it could have for its slots and tables approval combined at the minimum bid and the table fee, but only for a source of revenue that’s averaging around 2.1% of total gaming revenue at the properties that are currently conducting sports wagering. “
Joseph Weinberg, CEO of Cordish, added that when they made their bid at auction for the Category 4 casino (Live! Pittsburgh), they believed it included license fees for online and retail sports betting.
Rob Norton, President of the Cordish Gaming Group, added:
“As you look at the direct revenues associated with sports betting, although it’s been an impressive start, it is a very small fraction of the overall gaming revenue. We anticipate the profitability of sports betting to be marginal at best. But we do believe in the overall energy. We do believe in the overall benefit and we’re excited to bring sports betting to both Westmoreland and to Philadelphia.”
A wacky vote
During the April 1, 2020 PGCB meeting, Stadium Casino LLC petitioned the PGCB for a sports betting license for Live! Casino Pittsburgh.
Stadium Casino hoped the $10 million sports betting license it paid for Live! Casino Philadelphia would cover Live! Casino Pittsburgh in Westmoreland. A majority of board members agreed with Stadium by voting 4-3. But it didn’t get approval. In the wild world of PA gaming that wasn’t enough. Pennsylvania gaming law calls for a “qualified majority” which requires all four legislative appointees on the board and one of the three governor’s appointees.
- Yes votes: Sean Logan, Mark Mustio, Merrit Reitzel, Dante Santoni, Jr.,
- No votes: chairman David Barasch, Obra Kernodle IV and Denise Smyler
Cordish gets a favorable ruling in May
This roller coaster ride wasn’t over yet. In May 2020, Cordish won a ruling and did not have to pay for a license for a retail sportsbook at Live! Casino Pittsburgh. However, Live! Casino Pittsburgh would need a separate license and have to pay a fee for online sports betting. At the end of August 2020, The Cordish Companies announced a FanDuel sportsbook would be part of the mini-casino when it opened in the fall.
Cordish caves and pays
In what came in like a lion to the office of the PGCB, went out like a lamb during the board’s monthly meeting on Wednesday, July 14. The Cordish Companies received approval to acquire a second $10 million license. It didn’t take long to discover what platform Cordish would partner with. The next day, Cordish revealed they completed a market access agreement with Fubo Gaming, a subsidiary of the live TV streaming platform, for sports betting and iGaming.
Fubo coming to Pennsylvania
For an iGaming or mobile sportsbook to go live in Pennsylvania, it must partner with a brick-and-mortar located in-state. The launch of Fubo Sportsbook is subject to regulatory approval and projected for the fourth quarter of 2021. T
Pennsylvania currently has 13 online sports betting apps. However, Fubo’s watch-and-wager model is different from current offerings.
Through the sportsbook, FuboTV plans to integrate betting with live sports. FuboTV currently has a sports offering in Pennsylvania through its carriage agreements with regional sports networks NBC Sports Philadelphia (Philadelphia 76ers, Philadelphia Flyers, Philadelphia Phillies) and AT&T SportsNet Pittsburgh (Pittsburgh Penguins, Pittsburgh Pirates), in addition to local and national network coverage.
Fubo Gaming also has a Pennsylvania connection. Fubo Gaming was formerly Vigtory, a SeventySix Capital’s portfolio company, before the sale to FuboTV. SeventySix Capital, a venture capital company, is headquartered in the Philadelphia suburbs
In addition to PA, Fubo Sportsbook also has market access in:
- New Jersey
Norton, president of Cordish Gaming Group said:
“Partnering with Fubo Gaming to bring our guests this exciting, integrated mobile sports betting option is the natural evolution of our Live! Casino brands in Pennsylvania. Philadelphia and Pittsburgh are both iconic sports cities that are deserving of best-in-class sports betting platforms, so we look forward to working with Fubo Gaming on this new endeavor.”