State College Casino Near Penn State on Hold, as Lawsuit and Traffic Study Pend
The proposed $120 million State College casino project from the Bally’s Corporation and Pennsylvania businessman Ira Lubert is on hold for at least the next few months.
Bally’s, which partnered with Lubert after he was the high bidder during the Pennsylvania Gaming Control Board’s (PGCB) Category 4 satellite casino auction round held in September 2020, wants to transform the former Macy’s department store at the Nittany Mall into a casino with as many as 750 slot machines, 30 table games, and a sportsbook.
But litigation brought against the state by The Cordish Companies, the Baltimore-based casino operator behind Live! Casino Hotel Philadelphia and Live! Casino Pittsburgh, is challenging whether Lubert was qualified to bid on the Category 4 license. The legal challenge was heard in March before in the state’s Commonwealth Court, but no ruling has yet been issued.
Adding to the delay in the PGCB formally issuing Bally’s a Category 4 gaming permit for its State College casino is the state gaming agency itself. The board recently ordered a comprehensive traffic study on the three satellite casinos that have already opened — Live! Pittsburgh, Hollywood Casino York, and Hollywood Casino Morgantown.
The PGCB plans to see how traffic has fared outside those three properties compared with the casinos’ pre-opening projections.
The lawsuit and traffic study are delaying the PGCB vote on whether to authorize the Bally’s State College plan. PGCB officials say the earliest the board might motion to vote on the project is October 19, but that’s likelier to occur during the board’s November 16 meeting.
Cordish believes the PGCB wrongly allowed Lubert to bid on the Category 4 license opportunity. After the state did not receive any qualifying bids in an earlier auction round, the state gaming officials decided to open up the opportunity to individuals who are key investors in any of the state’s other brick-and-mortar casinos.
Lubert, the PGCB said, qualified to bid because he maintains a 3% ownership position in Rivers Casino Pittsburgh. Lubert had also held a significant stake in the Valley Forge Casino Resort before it was sold to Boyd Gaming in 2018 for $281 million.
Lubert subsequently bid $10,000,101 during the September 2020 auction. His offer narrowly outbid Cordish’s.
Cordish filed its complaint against the PGCB and Lubert a year ago this month. The company says the state allowed for individuals to participate in the auction, but did not allow those individuals to form consortiums with non-eligible companies like Bally’s, something Cordish alleges Lubert did.
[The PGCB] permitted only such persons to bid; it did not permit eligible bidders to shoehorn into their bids persons or entities that were prohibited from bidding themselves,” the Cordish lawsuit contends.
After winning the auction round, Lubert soon announced a partnership with Bally’s to invest $120 million — inclusive of the $10 million bid — to put a casino near Penn State University.
We Are… Opposed
The PGCB has heard many opinions in opposition to the Bally’s/Lubert casino plan. During the state’s public comment period, nearly 5,000 messages to the PGCB opposed allowing a casino to be built so close to the university. Roughly 100 letters expressed support for the development.
Penn State has yet to take an official position on the casino matter. The university’s board of trustees has refuted numerous calls to weigh in on whether the state’s largest higher education institution has an opinion on the Bally’s scheme.
Lubert, a 1973 Penn State graduate, has been appointed or elected to multiple terms on the university’s board. He was elected chairman of the board in 2016, but is not currently a trustee.
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