Pending Traffic Study and Lawsuit Delay the Construction of State College Casino

Ira Lubert, a Pennsylvania entrepreneur, and Bally’s Corporation proposed to build a $120 million State College casino. But, their plans are currently on hold for several months. The proposed casino is a few miles from the Penn State University campus.

Lubert partnered with Bally’s Corporation in September 2020 after being the highest bidder in a Category 4 satellite casino action that the Pennsylvania Gaming Control Board (PGCB) conducted. The businessman plans to convert the former Macy’s department store at Nittany Mall into a casino with a bookmaker, 30 table games, and 750 slot machines.

Even so, litigation that The Cordish Companies, a Baltimore-based operator that runs Live! Casino Pittsburgh and Live! Casino Hotel Philadelphia, brought against Pennsylvania. The company challenged Lubert’s eligibility for a Category 4 license.

The Pennsylvania Commonwealth Court heard the case in March but did give a ruling immediately. The PGCB delayed suing Bally’s Category 4 license application for the State College casinos.

The gaming board ordered a detailed traffic study on three satellite casinos that are currently operating. They are Hollywood Casino Morgantown, Hollywood Casino York, and Live! Pittsburgh.

The PGCB wants to assess how traffic is outside the three gaming properties in comparison with their pre-opening projections. The traffic study and lawsuit are delaying the board’s ballot on authorizing the State College casinos.

board officials recently revealed that PGCB can motion a ballot on the gaming project on October 19. Still, the vote can occur in its November 16 meeting.

More Details About the Lawsuit

The Cordish Companies claimed that the state’s gaming board made a mistake allowing Lubert to take part in the Category 4 license bid. Pennsylvania didn’t get qualifying bids in the previous auction round. This prompted its gaming officials to allow major local investors in any of its other land-based casinos to bid on the license.

The PGCB in its defense stated that Lubert qualified since he owns 3 percent of the Rivers Casino Pittsburgh’s shares. Besides, he had shares in the Valley Forge Casino Resort before Boyd Gaming bought it for $281 million in 2018.

Lubert paid $10,000,101 while bidding in the September 2020 auction, which was slightly more than the money that Cordish Companies offered. The casino operator sued Lubert and the PGCB one year ago claiming that it permitted individuals to bid on the license.

Pennsylvania claims that it prohibited individuals from creating consortiums with non-eligible firms such as Bally’s. Cordish claims that Lubert broke this rule. Its lawsuit states that the PGCB allowed such individuals to take part in the license bid and didn’t allow eligible bidders to add entities or people who it had prohibited from bidding into their bids.

Lubert disclosed that he had partnered with Bally’s Corporation when he won the auction round. They agreed to spend $120 million which includes the $10 million bid, to build a gaming venue near Penn State University.

Some people have expressed their opinions to the PGCB as they oppose the State College casino’s plan. For instance, the board received almost 5,000 messages in Pennsylvania’s public comment period opposing the casino’s construction near the university. Yet, 100 letters supported the casino plan.

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