Court: Pennsylvania board can award second casino license in Philadelphia

Commonwealth Court on Monday dismissed a lawsuit by minority investors in SugarHouse Casino seeking to block the reissue of Philadelphia's second casino license.

The minority investors, led by Philadelphia lawyer Richard A. Sprague and auto magnate Robert Potamkin, argued in the lawsuit filed last August that the Pennsylvania Gaming Control Board had no authority to reissue the license that went to the failed Foxwoods Casino. That license was revoked in December 2010.

Sprague said the group would appeal to the Pennsylvania Supreme Court, perhaps as soon as this week. The law does not deal with the question of whether the board can reissue a license that was revoked. "If there's a defect in it, then it's not up to the court to put the words in. That's what we have legislators for," Sprague said.

Two years ago, the board announced that it would accept applications to consider awarding the license a second time. Five companies are still awaiting a decision on which, if any, of them will receive it.

The minority partners, RPRS Gaming L.P., owners of 33.65 percent of SugarHouse, had argued that a second Philadelphia casino would cause them "irreparable injury."

The Gaming Control Board and Tower Entertainment Group, one of the current applicants for the second license, filed preliminary objections to the petition by RPRS Gaming.

"The Commonwealth Court's decision recognizes what the board believes is the very clear intent of the Gaming Act - that is the board has very broad discretion to issue gaming licenses, including those which may have previously been revoked," said Doug Sherman, the gaming board's chief counsel.

According to the opinion by Judge Bernard L. McGinley, the three-judge panel agreed with the board's argument that that RPRS's interpretation would mean that "every casino in Pennsylvania will either stay in business forever or the number of casinos licensed in Pennsylvania will contract if and when an entity goes out of business or is stripped of its license."