The Pennsylvania Gaming Board will consider a petition at State College Casino

Published on: December 7, 2022, 01:16 am.

Last updated: December 7, 2022, 01:16.

The Pennsylvania Gaming Control Board (PGCB) next week will deliberate a petition to intervene from a state-licensed gaming operator regarding the state’s review of a casino project targeting the Nittany Mall near the main campus of Penn State University in State College, Pa.

Pennsylvania State College Penn State Casino
Penn State University alumni Ira Lubert announces a $5 million gift to the school in June 2017. Lubert is behind a casino scheme in Pennsylvania that seeks to bring a commercial gambling enterprise near the largest universities in the state at the Nittany Mall in State College. (Image: Penn State University)

The PCGB announced yesterday that on Wednesday, December 14, state gambling regulators will hear from representatives of The Cordish Companies, the Baltimore-based gaming and hospitality conglomerate that operates two casinos in Pennsylvania. Cordish runs Live! Casino & Hotel Philadelphia — a full-scale casino and resort — and a satellite “mini-casino” in Westmoreland, in the western part of the state, called Live! Casino in Pittsburgh.

Cordish operates in Pennsylvania under the trade name “Stadium Casino, LLC.”

Stadium Casino raised eligibility issues with respect to the Category 4 application filed by SC Gaming OpCo, LLC. The operating entity is controlled by former Penn State graduate and former university administrator Ira Lubert.

Lubert qualified to bid during the September 2020 PGCB auction because of its 3% ownership position in Rivers Casino Pittsburgh. Lubert won the mini-casino bidding round with a bid of $10,000,101.

Lubert later identified the former Macy’s store in Nittany Mall for his satellite casino. The retail complex is less than two miles from Penn State’s campus, where more than 40,000 students live and study.

Cordish Levies Collusion

PGCB submitted two bids during the September 2020 auction, but state officials did not disclose the party behind the other submission or the amount that was bid. But Cordish later revealed that he offered only slightly less than Lubert.

Cordish attorneys allege Lubert wrongfully organized a consortium of investors for the casino near Penn State ahead of the auction in September 2020. The Live! The operator believes that Lubert had a deal – or at least a handshake – with Bally’s Corp. and two other individual investors before making the Category 4 licensing offering of just over $10 million.

Because Bally’s is not licensed in Pennsylvania and the other two individual investors have no stake in a state-licensed casino, they did not qualify to bid in September 2020.

SC Gaming is not simply an alter ego of Lubert – it is substantially different because there are persons other than Lubert who have ownership or control rights in the entity,” stated Cordish’s PGCB petition to intervene. “Lubert has effectively created an investment vehicle with persons who lack ‘an ownership interest in a gaming machine licensee,’ avoiding the eligibility requirements.”

“Lubert did not apply for the license himself,” the petition continued. “What Lubert did violates the Gaming Act and nullified SC Gaming’s application, vitiating the board’s authority to consider it.”

Lubert’s defense

Lubert has repeatedly denied the legal allegations against Cordish. He says he single-handedly paid the $10 million Category 4 license fee to the state before teaming up with Bally’s and local businessmen Robert Poole and PSU Trustee Richard Sokolov.

[Cordish’s] the frustration of being outbid by Mr. Lubert may be understandable, but the very purpose of the bidding process is to create competitive pressure to maximize bids,” SC Gaming’s lawyers argued in their pre-hearing submissions. “Unfortunately, [Cordish’s] Pursuing his new, flip-flopped view of the Category 4 application process only serves to drain the respondents’ (and Council’s) resources and, in all likelihood, delay the final project that will bring much-needed jobs and tax revenue to the Commonwealth and the Center. County.”

In the notice of the meeting, PGCB officials told representatives of both SC Gaming OpCo and Cordish (Stadium Casino, LLC) “to be prepared to provide testimony and evidence to the Board and to answer any questions the Board may have regarding this issue”.

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