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Philadelphia Court Nips Casino License Applicant’s Involvement

Posted on September 18th, 2010

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A losing applicant for a casino license in the state of Philadelphia claimed that it has the right to be involved in the proceedings that relate to the casino project is being spearheaded by Foxwoods Casinos in the same city. The Commonwealth Court of Pennsylvania finally stepped in and issued a decision that rejected the claim of the applicant, which happens to be a high profile casino player. With this rejection, the Commonwealth Court of the state has in its own manner recognized the discretion of the Gaming Control Board in giving out licenses to casinos. It just so happens that the rejected party is Keystone Redevelopment Partners, which is led by real estate mogul Donald Trump through his company Trump Entertainment. As everybody knows, Mr. Trump is not one to shy away from any publicity, be it bad or good.

In 2006, a license to operate a Category 2 slot machine facility in the City of Philadelphia was made available. Keystone was among the five applicants for the license. Eventually, before the year ended (5 days before Christmas of 2006, to be exact), the license was awarded to HSP Sugarhouse and Philadelphia Entertainment and Development Partners/Foxwoods, which in turn, caused the applications of Keystone and two other firms to be rejected. While one of the applicants that was rejected, Riverwalk Casino, did not take the rejection sitting down by appealing the case to the Supreme Court of the state, Keystone Redevelopment Partners did not follow suit. However, the firm was not actually silenced by the events. Instead it filed a petition to the Board, more than two years after the first decision of the Board was released, requesting to intervene by attempting to include itself in matters of licensing with regard to the Foxwoods plan, and the request of the licensee for additional time before the slot machine facility can start operations. Moreover, a second petition was filed by Keystone to have the licensing proceedings of 2006 reopened and have the awarding of the license to Foxwoods revoked. Keystone claims that because of the decision of the Board in 2006, it is now entitled to the license to operate slot machines.

The relief requested by Keystone was denied by the Board. Moreover, it also issued three orders which state that Keystone does not have the standing or authority to have the relief it seeks granted. The three orders of the Board were then appealed by Keystone to the Commonwealth Court. The Commonwealth Court’s decision has been made available to the public at the web site of the Gaming Control Board’s web site. The decision stated that because Keystone did not appeal the original application denial in 2006, which made Keystone a party which has waived its interest in the whole matter already. The court also found that Trump’s group mischaracterized the initial decision of the Board, and Keystone was never entitled to the license, in contrast to what it believes. The chief counsel of the Gaming Control Board, Doug Sherman, was quoted in saying, “The Commonwealth Court’s decision confirms what the Board has stated all along — Keystone is just a disappointed applicant that lost in the competitive process for a license nearly four years ago. We hope that the matter is now settled and Keystone will not continue an effort to inhibit the development of gaming in Philadelphia and the creation of jobs and revenues which will flow from that process.”

The court in its decision also affirmed that the state’s GBA, with the Board’s Office of Enforcement Counsel (OEC) and the Board’s Bureau of Investigation and Enforcement’s (BIE) recommendation, has the authority to decide on revoking an operator’s license. The regulations of the Board or the Gaming act do not provide anything for a third party to act as a prosecutor to revoke a license. The Gaming Control Board of Pennsylvania was formed in 2004 and has been tasked to be the overseer of various aspect of the casino industry by the state. So far, the Board has issued nine licenses to operate casinos, although its maximum is 14. With the nine casinos in operation, more than 8,000 jobs have been given to the residents of the state.