Investors Lose Bid to Thwart Second Philly Casino

PHILADELPHIA (AP) — Minority investors in Philadelphia's SugarHouse Casino on Monday lost a legal round in their bid to stop Pennsylvania gambling regulators from licensing a second casino in the city.

The minority partnership group, led by Philadelphia lawyer Richard Sprague and auto dealer Robert Potamkin, argued that the Pennsylvania Gaming Control Board does not have the authority to award a license that it previously revoked from the failed Foxwoods casino project in Philadelphia in 2010. The minority investors also said SugarHouse's competitive position would be harmed by a second casino.

Commonwealth Court on Monday dismissed the suit, saying it agreed with board's contention that since lawmakers approved gambling to raise tax revenue, they clearly intended the board to issue all 14 licenses authorized by the 2004 casino law.

Thomas Groshens, an attorney for the minority investors, said an appeal to the Pennsylvania Supreme Court will be considered.

Five applicants are vying for Philadelphia's second license. Regulators are expected to make a decision this year.

The gaming board said the decision vindicates its position that it has broad discretion to issue casino licenses, including licenses previously revoked.

"Having all authorized casinos built and operating as contemplated by the General Assembly will create employment opportunities, spur economic development and provide new sources of tax revenues for the commonwealth and the city," said the gaming board's chief lawyer, R. Douglas Sherman. "Not seeking to issue the license would undermine those goals and be counter to the clear legislative intent which the Board is bound to fulfill."

SugarHouse's majority partners did not join the suit. A SugarHouse spokeswoman did not immediately respond to a request for comment.

The lawsuit said that the majority group that owns and operates the casino had "trouble reaching a consensus" about whether to join the lawsuit because of how it would be perceived by Philadelphia officials, whose city stands to benefit from the casino's receipts.

(Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed)