The Stadium Live Casino was approved in 2014, but a lawsuit stopped development for the past 3 years.
Scott Petri, a state representative from Bucks County, introduced a bill this week which would change casino ownership laws in Pennsylvania. The bill might be added to the omnibus gambling expansion package in the coming weeks.
If the bill passes, it might clear the way for a second Philadelphia casino. The majority owner of the Parx Casino would be given the green light to develop that second casino.
Watche “Bob” Manoukian owns 85% of the Parx Casino. In the current plan for the Live! Hotel & Casino in South Philadelphia (also known as the Stadium Casino), Manoukian is a proposed minority owner. The Stadium Casino LLC plan calls for Manoukian to own over one-third, meaning he is a vital part of the Live! Casino ownership group.
Stadium Casino Development Plan
Stadium’s Live! Casino plan was approved in 2014, but has been held up in litigation for the past 3 years. State law says that a person cannot own more than 33 and 1/3 percent of two casinos in Pennsylvania.
The law was designed to keep one single interest from dominating gambling in the state. Rep. Scott Petri’s bill would change the law, allowing Manoukian to own parts of Parx Casino and Live! Casino.
The issue is controversial, because the Pennsylvania Supreme Court called on regulators to investigate the legality of the Live! development plan. The Supreme Court told the Pennsylvania Gaming Commission to investigate ownership, on the suggestion that Bob Manoukian hid the scope of his role in the Live! ownership group. Manoukian claims his stake in the Stadium Casino is no more than the 33 & 1/3 percent allowed by law.
Pennsylvania Gaming Commission Supports Petri’s Bill
According to Scott Petri, the Gaming Commission supports his proposal. Representative Petri says that his bill is needed to move Pennsylvania gaming law into the modern age. Petri told Philly.com, “The 1 and 1/3 rule is really an archaic provision. It does not make sense anymore to have it. The Gaming Control Board would like it removed. So that’s what the bill does.”
The Stadium Live! Casino is part of a joint venture by Cordish Cos. of Baltimore and Greenwood Racing Inc. The Cordish Company is a well-known entity which is behind the Live! Casino chain and a variety of real estate development businesses across the United States. Greenwood Racing is the parent company of Parx Casino and Greenwood Gaming & Entertainment, the casino management wing of the business. Bob Manoukian owns part of the Greenwood Racing group.
Lawsuit by SugarHouse and Market East
In the 2014 lawsuit brought by SugarHouse and Market East Associates, they allege that the paperwork regarding Greenwood Racing is incorrect. Manoukian’s lawyers claim the “equity infusion” he put into the Live! project was placed in an “irrevocable trust”. They argue that Manoukian will “lose possession of the assets” and “will receive none of the profits”.
The Pennsylvania Supreme Court is not so certain. They called on the Gaming Commission to investigate the equity infusion, focusing on Manoukian’s “ownership interest in Sterling Fiduciary Services.”
Sterling Fiduciary is another financial entity set up for the benefit of members of the Manoukian family. The Pennsylvania Supreme Court called on the state’s gaming regulator to investigate the matter “including, but not limited to, reopening the evidentiary record and holding a public hearing.”
Petri Cites $75 Million Licensing Fee
Rep. Petri says it is time to move ahead with the Stadium Casino plan. He said that the state is losing out on much-needed revenues due to the litigation, including a $75 million licensing fee “which we have already booked for this year in the budget.”
Noting the $2 billion budget deficit that the state faces in the final stages of its annual budget talks, Petri said, “It’s important to finally end litigation on this Philly license. What does this mean for the state coffers?”
Adding Live! Casino to Omnibus Gambling Bill
Scott Petri said he hopes to add his proposal to the omnibus gambling bill which is in its final stages of negotiations. At present, the bill includes provisions for online poker and daily fantasy sports, as well as an expansion of land-based gambling via “video lottery terminals” (VLTs) or “video gambling terminals” (VGTs). The VLT legislation represents the main difference between the House Bill and Senate Bill which were passed last month — and is highly controversial.
Due to disagreements between House and Senate lawmakers, the omnibus gambling bill is still no certainty. Negotiations continue, but expanded gambling would bring in hundreds of millions of dollars to the state’s budget. So would the Stadium Casino, so lawmakers might opt to include as much gambling money as possible in the budget, to avoid raising taxes, cutting services, and running up the debt.
