The Cordish Companies Challenges Bidding Process for State College Casino Location

By John Isaac,
Editor at online-gambling.com

John Isaac Editor at online-gambling.com

John Isaac is an editor with many years of experience in the gambling industry. He writes expert articles on card games like blackjack and poker. In addition, he is also well aware of the US gambling laws and the Indian and Dutch gambling markets. You can rely on verified information and insightful details.

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Last updated: March 4, 2023

The Bally’s Corporation is one step closer to obtaining a gaming license for its proposed Category 4 satellite casino in State College, Pennsylvania, but The Cordish Companies is not giving up its fight to prevent it. The Pennsylvania Gaming Control Board unanimously voted to grant Bally’s a mini-casino license for its $123 million project, which includes converting the former Macy’s anchor store at the Nittany Mall into a casino with 30 table games, 750 slot machines, and a sportsbook. Category 4 licenses were created as part of the state’s 2017 gaming expansion attempt and were initially only available to full-scale casinos.

However, after auction bids dried up in March 2018, the PGCB opened up the bidding process to individual investors in slot machine licenses, which is how Ira Lubert won the bid for the State College location. The Cordish Companies, which operates Live! Casino Hotel Philadelphia and Live! Casino Pittsburgh, qualified to bid but was outbid by Lubert. Nonetheless, Cordish is not giving up its opposition to Bally’s obtaining the license.

State Law Limits Eligibility for Category 4 Licenses in Pennsylvania Gaming Expansion

Pennsylvania’s gaming law from 2017 stipulated that only companies that held a slot license in the state or individuals who held important stakeholder positions in a slot concession were eligible to bid on Category 4 licenses. Furthermore, the law mandated that only those entities were permitted to submit the amount won in order to obtain the license. However, Cordish Companies has challenged the process by which Ira Lubert won the bid for the State College location.

Cordish argues that Lubert didn’t respect the bidding rules by assembling an investment group before sending his $10 million payment. Cordish’s attorneys have appealed to the Pennsylvania Supreme Court, arguing that the PGCB lacked the legal permission to proceed with Lubert’s casino proposal after he allegedly established partnerships with investors prior to giving money about the license.

According to the Cordish appeal, Lubert failed to pay the full amount of his winning bid to the Board as mandated by the Gaming Act. Rather, the payment was made by Robert Poole, Richard Sokolov, and potentially other individuals or entities who invested in Lubert’s bid. These investors did not provide simple loans in the regular course of business. Instead, they acquired a stake in the Category 4 license for which Lubert was the successful bidder.

Cordish said that Lubert disclosed the creation of an organization called SC Gaming OpCo, LLC shortly after being declared the highest bidder. Lubert had brought in investors, and in January 2021, SC Gaming announced that it had signed a contract with Bally’s to design, construct, develop, and manage the Nittany Mall casino. Bally’s was barred from bidding during the September 2020 auction since it did not possess a slot license in Pennsylvania. Cordish is pursuing legal action to reverse the PGCB’s ruling that approved the Bally’s casino initiative.

Despite the Cordish allegations, Lubert has repeatedly denied them, labeling his opponents as “sour grapes.” The former trustee and Penn State alumnus maintains that he transferred $10 million from his personal funds within 2 days of ending the auction as a winner. The State College community is strongly opposed to a casino at the Nittany Mall, which is located very near to the Penn State University.

Pennsylvania Supreme Court to Determine Fate of State College Casino Proposal

Nevertheless, the public’s opposition to the project may have little legal standing, as College Township, where the Nittany Mall is situated, did not opt out of the Cat. 4 bidding pool before the PGCB’s August 2019 deadline.

The people’s only hope of maintaining State College free of a land-based casino may rest with the Pennsylvania Supreme Court. It will be determined in the coming months whether the state’s highest court will consider the Cordish appeal. In case the state chooses to pursue the case, the situation could continue for several years.