Bally’s Casino Plan at Penn State Wins Crucial Court Ruling

Bally’s Casino Project Wins Court Victory, Clearing Path for ConstructionBally’s Casino Project Wins Court Victory, Clearing Path for Construction July 18, 2024 (Updated) Bally’s Corporation and its local partners in State College, Pennsylvania, have emerged victorious in a major court battle that threatened to derail their planned casino project. Supreme Court Ruling On July 18, 2024, the Pennsylvania Supreme Court ruled in favor of Bally’s, rejecting an appeal from Stadium Casino RE, LLC, which claimed the company had violated gaming licensing rules. The court found that Stadium’s arguments were without merit. Background of the Dispute In September 2020, Bally’s was awarded a Category 4 “mini-casino” license by the Pennsylvania Gaming Control Board (PGCB). Stadium Casino, which had also bid for the license, contested the decision, alleging that Bally’s had partnered with ineligible individuals before submitting its bid. Details of the Ruling The Supreme Court ruled that Bally’s lead bidder, Ira Lubert, had not violated PGCB rules by partnering with Robert Poole and Richard Sokolov. The court noted that while Poole and Sokolov may have contributed financially to the bid, Lubert maintained full control of the license. Next Steps The ruling clears the way for Bally’s and Lubert to proceed with construction of their $123 million casino at the Nittany Mall. No construction timeline has been announced. Community Concerns While the court victory is a major step forward for Bally’s, the project continues to face opposition from a grassroots coalition of State College residents who have expressed concerns about the negative impact it could have on the community. They have focused their criticism on Bally’s recent operational troubles. College Township Council’s Role Critics of the casino project have placed some of the blame on the College Township Council for failing to qualify for a Cat. 4 casino license in 2017 when the PGCB allowed townships to exclude themselves from consideration. More than 1,000 other townships subsequently withdrew from consideration.

Posted on: July 18, 2024, 05:08 AM.

Last updated: July 18, 2024, 05:08 AM.

Bally’s Corporation and its local development partners in State College, Pennsylvania, near Penn State University, won a major court victory this week.

Nearly four years after Bally’s Casino at the Nittany Mall was announced, the Pennsylvania Supreme Court has ruled that the Pennsylvania Gaming Control Board did not err in granting a gaming license to the developers behind the mini-casino. Ira Lubert, a former Penn State University trustee, is leading the $123 million project. (Image: Nittany Mall)

More than 10 months after the Pennsylvania Supreme Court agreed to hear an appeal of the Pennsylvania Gaming Control Board’s (PGCB) decision to grant a gaming license to a casino project at State College’s Nittany Mall, the state high court ruled that the plaintiff’s arguments were without merit.

Stadium Casino RE, LLC, the losing bidder in the September 2020 PGCB auction round for the Category 4 “mini-casino” license, disputed whether winning bidder Ira Lubert violated the state gaming agency’s application rules. Category 4 casinos were made available through a 2017 gaming expansion package, but only current state slot machine license holders and major investors in the franchises qualified to bid on the satellite properties.

Lubert qualified for the auction through his 3% equity stake in Rivers Casino Pittsburgh. So did Stadium Casino, a wholly owned subsidiary of The Cordish Companies, which was then building Live! Casino & Hotel Philadelphia.

Challenge rejected

Stadium’s lawyers argued that Lubert violated PGCB’s bidding rules by orchestrating a partnership with two other Pennsylvania businessmen — Robert Poole and Richard Sokolov, the latter a current trustee of Penn State University — before submitting his winning bid of $10,000,101. Since Poole and Sokolov were ineligible to bid independently, Stadium argued that Lubert’s bid should have been disqualified.

The Pennsylvania Supreme Court disagreed this week.

It is established that although the money was transferred from Lubert’s account, he did not pay the full amount himself, as various individuals and entities contributed money to the payment of the winning bid,” the court admitted.

But Justice Christine Donohue, who wrote the court’s unanimous opinion and was joined by Chief Justice Debra Todd and Justices Kevin Dougherty, David Wecht, Sally Updyke Mundy, Kevin Brobson and Daniel McCaffery, said it rejects Stadium’s “attempt to equate financial interests with ownership.”

While Poole, Sokolov, and anyone else, including potentially Bally’s, who helped Lubert pay the $10 million fee within 48 hours of winning the September 2, 2020 auction may have been told they would receive a stake or shares in the upcoming casino, the court ruled that Lubert currently has 100% control of the Cat. 4 license. In order to change that, the PGCB would have to approve the additional owners after conducting background checks on those individuals/entities to ensure they are suitable to directly hold a state gambling license.

The Supreme Court therefore concluded that the PGCB had properly checked Lubert’s bid or payment and that Lubert had also acted correctly, or at least within the applicable law.

Township welcomes casino

About five months after Lubert, through his entity SC Gaming OpCo, paid the $10 million fee in exchange for the Cat. 4 license, the former Penn State trustee announced Bally’s Corp. as the development partner and future operator of the $123 million casino.

In early 2021, the development group announced plans to renovate a former Macy’s department store at the Nittany Mall, just a few miles from Penn State University’s main campus, into a casino with up to 750 slot machines and initially 30 table games, plus a sports betting office.

The Pennsylvania Supreme Court ruling clears the way for Lubert and Bally’s to begin construction of their casino at the mall, but no timetable has been announced.

A grassroots coalition of residents in the State College community continues to flood the population Casino.org’s reporting on all things Bally’s, a company in financial trouble. Pennsylvanians have expressed hostility toward a potential casino in their community and have focused their outrage on Bally’s recent operational blunders.

However, blame for the fact that Bally’s Pennsylvania project was initially floated should be laid at the feet of the College Township Council, which failed to qualify for a Cat. 4 casino in 2017 when the PGCB allowed townships to exclude themselves from consideration by casino developers. More than 1,000 other townships withdrew from consideration.