HARRISBURG – The question of whether the Live! Hotel and Casino complex will be constructed in South Philadelphia has once again been thrown to state regulators, per a decision last week from the Supreme Court of Pennsylvania.

On June 20 and through a unanimous decision penned by Justice Debra McCloskey Todd, the Court ruled the Pennsylvania Gaming Control Board would need to take another look at an application for the complex originated by Stadium Casino, LLC.

The hotel and casino application is being remanded to the Board for the limited purpose of addressing two issues: “(1) Whether Watche Manoukian, an individual who is an affiliate of Stadium, was eligible to apply for a Category 1 slot machine license at the time of Stadium’s application for the Category 2 license, in violation of Section 1304(a)(1) of the Gaming Act; and (2) Whether, after the issuance of the Category 2 license to Stadium, Manoukian will possess a financial interest in that entity greater than 33.3 percent, in violation of Section 1330 of the Gaming Act.”

The proposed Live! Hotel and Casino complex is a significant project planned to be located in South Philadelphia’s Sports Complex district, in the general vicinity of Citizens Bank Park, Wells Fargo Center and Lincoln Financial Field. The project would feature a 2 million square foot-space, a large vehicle garage, 200-room hotel, in excess of 2,000 slot machines, over 100 table games and more.

Court records detail that SugarHouse HSP Gaming, L.P., operators of the SugarHouse Casino located in Philadelphia’s Fishtown district and Market East Associates, L.P. inquired as to Manoukian, a businessman based in London, and his financial stake in the planned Live! Hotel and Casino project.

Manoukian currently owns a stake of approximately 85 percent in the Parx Casino located in nearby Bensalem, thereby making any involvement of his in another casino in Philadelphia subject to the state’s Gaming Act. Under that law, an individual owning a majority stake in one casino is mandated to own no more than a 33 percent, or one-third, stake in another casino.

However, Manoukian chose to assign 33 percent of the Live! Hotel and Casino’s revenue to Greenwood Racing Inc., which owns Parx Casino, and further created a trust for his three sons to enjoy a separate stake of 17 percent. $34 million has been pledged by Manoukian for the trust and to be used for the proposed South Philadelphia casino project.

In speaking for the Supreme Court of Pennsylvania, Todd opined as to the possible rationale behind the specific nature of Manoukian’s financial disbursement with respect to the Live! Hotel and Casino project.

“[It] raised the question of whether the trust was being used by Manoukian to evade the requirements of Section 1330 by making it appear that his total interest in Stadium through Sterling Fiduciary and Greenwood was below the 33.3 percent limit imposed by that Section,” Todd said.

On behalf of the Court, Todd relinquished jurisdiction of the matter to the Pennsylvania Gaming Control Board.

“The Board is directed to conduct all appropriate proceedings in order to receive evidence sufficient for it to make this determination, including but not limited to, reopening the evidentiary record and holding a public hearing. The Board is also directed to follow its normal procedures and issue an appropriate final order after it has made these determinations. Jurisdiction relinquished,” Todd said.

Supreme Court of Pennsylvania cases 124 & 125 EM 2016

From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nickpennrecord@gmail.com

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