The Cordish Companies will look to the Pennsylvania Supreme Court to overturn the Pennsylvania Gaming Control Board’s (PGCB) decision to license businessman Ira Lubert for a mini-casino in the State College municipality. Cordish argues that Lubert’s bid is invalid because of the involvement of Bally’s, which wouldn’t have been able to place a bid of its own.
State law allows PGCB to issue licenses for Category 4 mini-casinos to bidders with an established in-state license or substantial investors in those companies. Lubert meets the latter condition. However, while Cordish operates a pair of Live! branded casinos in Pennsylvania, Bally’s is an out-of-state operator.
Initially, the PGCB only allowed direct bids by in-state casino companies. However, after failing to award all available licenses that way, it expanded its search to include investors like Lubert. The minimum bid for a license was $7.5 million.
Cordish had attempted to bid for the license but lost to Lubert’s bid of $1,000,101. Lubert had arranged a deal with Rhode Island-based Bally’s to operate the new casino, should he win. Lubert and Bally’s then created a new company, SC Gaming OpCo LLC, to hold the casino license.
Although the PGCB allowed Cordish subsidiary Stadium Casino to intervene in the licensing hearing, it stuck to its guns. Cordish, through Stadium, then took the fight to court. A commonwealth court made a preliminary ruling against the plaintiff but deemed the issue “ripe” for consideration by the state’s Supreme Court.
The Only Casino in Central Pennsylvania
The proposed $123 million State College casino will be located in Nittany Mall, occupying a space that once belonged to Macy’s department store. If the project goes through, it will be the only casino outside the state’s southeastern and southwestern corners.
The project has generated significant public outcry. But even with the general dissatisfaction and despite Cordish’s arguments, the PGCB issued the license to SC Gaming and stated that it did not find any wrongdoing.
The saga traces its origins back to 2017 when Pennsylvania expanded retail gambling. It established a fourth category of retail gaming property, colloquially known as “mini-casinos” or “satellite casinos.”
Category 4 casinos can operate up to 750 slots and 30 table games. After the first year of operation, owners can add ten extra tables. The rules state they cannot be within 25 miles of an existing casino.
Lubert’s eligibility is thanks to his 3% stake in Rivers Casino Pittsburgh. However, Cordish argues that he wasn’t bidding for the license out of his pocket but rather with Bally’s money. Lubert denies the claims and states he has proof that the money is his own, despite having a deal with Bally’s to partner with him on the project.
Residents Not Thrilled With Casino
Cordish only opposes a Bally’s property in State College because it would like to build such a casino itself. However, other groups oppose the plan on a more fundamental level. Petitions and public outcry have emerged, with many residents believing a casino has no place in the community. Instead, they would prefer a department store or another large chain.
Many concerned residents fear that the casino’s location poses a risk to minors. The casino will be only three miles from Penn State University. Many of the college’s 50,000 students are under 21, the legal gambling age in the state. Opponents say that locating the casino in a mall rather than a standalone building further increases the risk.
During the initial hearing process, municipalities could withdraw from consideration. Unlike many other towns, State College failed to do so. 2,560 municipalities had their say, and about 1,030, or 40%, excluded themselves as potential sites.
Local leaders now regret the decision. They say they’ve realized they should have gauged public opinion before the auction began.