By Peter Gleason
Call it deja vu all over again!
Philly’s second casino in South Philly received yet another approval yesterday when the Pennsylvania Gaming Control Board ruled its applicants are within state limits on ownership of multiple casinos.
The board’s ruling came after the Pennsylvania Supreme Court had ordered further exploration into whether a father / sons ownership pairing triggers a statutory cap on ownership stakes in a second casino.
The initial approval of Live! took place in November 2014 and, in true Pennsylvania tradition, has been delayed by lawsuits primarily brought by other casinos in the area.
With yesterday’s 7-0 vote, the partnership between the Cordish Cos. of Baltimore and Greenwood Gaming & Entertainment, operators of Parx Casino in Bensalem, is back on track for development of a casino near the stadium complex at 9th and Packer in South Philly.
Attorney Richard Sprague, representing the Sugarhouse casino that already operates along Philly’s Delaware River waterfront, said afterward that he intends to challenge a separate board decision denying Sugarhouse standing.
If the Live! Philadelphia license is issued in this fiscal year, that would result in a $75 million payment to the state.
The license – one of two remaining in the original batch of 14 licenses authorized by the 2004 legalization of casino-style gambling in Pennsylvania – was initially awarded in November 2014.
The decision dealt specifically with whether Watche Manoukian, the majority owner of Greenwood, is in violation of state law barring an owner of one casino from owning more than 33.3 percent of another.
Greenwood Racing formed a 50-50 partnership with Cordish for the Stadium Live! project.
At a public hearing on the issue last week, Manoukian said he will be transferring a portion of his stake in the new venture to a trust for his three sons, after which his final ownership stake in the new casino would equal 28.33 percent.
The trust would control an additional 17 percent, but board members found that because his sons are its sole beneficiaries, after his initial gift to fund it, Manoukian will not have a significant enough financial or business interest in the trust to trigger the ownership cap.
The remaining Greenwood stake in Stadium is controlled by a number of minority partners.
During yesterday’s meeting, Cyrus Pitre, chief enforcement counsel for the board, noted the final gaming license will not be issued until after the financial transactions have been finalized and board investigators are certain the source of Manoukian’s gift to his sons is not tied to revenues from Parx, another factor in this week’s decision.
“Our job is to trace the source of that gift, and we plan on doing that,” Pitre said, noting the board has withheld issuance of final licenses in several other instances in the past.
The board will issue a written opinion later this week, after which a 30-day window opens for appeals.
If none are filed, “the board can do its additional due diligence and look sometime in the future to an issuance of the license and have the project go forward,” said PGCB spokesman Doug Harbach.
Harbach explained that since three years have lapsed since the initial award, the board needs to review the reliability of various financing commitments and update suitability checks on all principals before final licensing.
Stadium Casino partners had previously said construction of their casino at the Holiday Inn site near Citizens Bank Park would take over a year, so will likely be at least 2019 before the second Philly casino opens its doors.