State College, home of Penn State University, is finally getting its casino thanks to the Pennsylvania Supreme Court.
The court struck down a challenge to the casino, essentially paving the way for the casino’s developer, SC Gaming, to move forward with plans to build a casino in Nittany Mall.
Key takeaways
- SC Gaming’s Nittany Mall casino gets the green light from the Pennsylvania Supreme Court.
- The court decision comes nearly four years after Ira Lubert won an auction for a license with a $10 million bid.
- The new casino will be located in a mall and could take 12 months to build.
- Pennsylvania’s gaming market continues to be one of the top markets in the nation.
How a PA mall casino ended up at state Supreme Court
Back in September 2020, the Pennsylvania Gaming Control Board opened up a bidding round for a new casino license. Pennsylvania’s casino licensing process includes an auction, in which developers submit bids for a casino license.
And, in this case, the license up for grabs was for a Category 4 casino, also known as a “mini-casino” because they can have a maximum of 750 slot machines and 40 table games. Additionally, mini-casinos aren’t allowed within 25 miles of another licensed casino.
Lubert, part owner of Rivers Casino Philadelphia, won the auction with a $10 million bid. He went on to form SC Gaming, the development company slated to build the casino. A few months later, Bally’s announced a partnership with SC to build the casino where a Macy’s once stood at Nittany Mall in College Station.
Nittany Mall casino gets pushback from local casino competitor
Stadium Casino, a development group that runs Live! Casino and Hotel Philadelphia, was not happy with this development. The group filed an appeal with the PGCB, saying that Lubert’s bid was a sham because he didn’t pay the full amount of the bid himself.
And it was true: Lubert’s bid consisted of several contributions from individuals with whom he would provide an ownership stake in the new casino. In Stadium’s opinion, this invalidated Lubert’s bid because Lubert was essentially a proxy for outside interests who would otherwise not meet the requirements to bid on a casino.
One of those requirements is that the person or entity bidding on a Category 4 casino must have an ownership stake in an existing Pennsylvania casino.
In July 2021, Stadium filed the appeal. In October of the following year, the PGCB approved Stadium’s appeal request, thus moving the case forward.
However, in January 2023, the PGCB approved SC Gaming’s application for a Category 4 license.
“The Pennsylvania Gaming Control Board today voted unanimously to award a Category 4 slot machine license to SC Gaming OpCo, LLC to construct a Category 4 casino in College Township, Centre County,” the PGCB wrote in a press release about the license.
Stadium was not happy with the decision, so it chose to take its case to the state Supreme Court. In the meantime, regulators put SC Gaming’s license on hold.
Why the PA Supreme Court ruled against Stadium Gaming
The state Supreme Court ruled unanimously in favor of SC Gaming because it found the PGCB had no rules for where a bid’s money originated or to challenge a bidder’s eligibility during the auction phase.
Stadium’s argument about the legitimacy of the winning bid only proved the bid’s legitimacy. The PGCB’s rules for winning bids are that they have to be paid within two days of the bidder winning the auction and, if the winning bidder doesn’t make the payment in time, the license goes to the second-highest bidder.
SC Gaming fulfilled both requirements, ending any controversy about the bid, and undermining Stadium’s argument. Furthermore, the court argued that the PGCB has many regulations to determine whether those involved in a bid and a Category 4 met the PGCB’s standards.
The PA Supreme Court stated:
“The absence of a mechanism by which to challenge a bidder’s eligibility at the auction stage is not surprising, considering the in-depth investigation performed by various divisions of the Board to vet slot machine license applicants.
The Gaming Act imposes significant requirements concerning both the content and scope of slot machine license application … These include detailed financial fitness requirements, compelling the disclosure of information to prove, by clear and convincing evidence, the financial stability, integrity and responsibility of all applicants and financial backers.”
What’s next for the Nittany Mall casino?
When SC Gaming presented its plan for the casino in 2021, the group said it would take approximately 12 months to build the casino. The property was slated to include:
- 750 slot machines
- 30 table games
- A sportsbook
- A sports-themed bar
The casino will take up 94,000 square feet and, at the time, was estimated to cost $123 million, a figure that has almost certainly increased since the plans were first introduced.
PA online casinos and land-based casinos continue to produce
When Nittany Mall Casino opens, it will enter a thriving gaming market. Overall, Pennsylvania casinos brought in $576 million in revenue in May, second only to Nevada, according to the American Gaming Association’s Commercial Gaming Revenue Tracker.
The state is the undisputed leader in online casinos, as it’s the only state to post consecutive months of at least $200 million in revenue.
On the land-based side, Pennsylvania casinos generated more than $276 million from slots and table games. Those numbers will continue to climb and, at some point in the future, we could see PA online casinos outpace land-based casino revenue.