Foxwoods Casino Philadelphia’s Journey Ends

On March 29, 2012, the Pennsylvania Supreme Court ended one long chapter of the ongoing story of the Foxwoods Casino Philadelphia project. The project’s owner, Philadelphia Entertainment and Development Partners (“PEDP”), petitioned the Supreme Court for allowance of appeal of a decision by the Commonwealth Court affirming the Pennsylvania Gaming Control Board’s revocation of PEDP’s Category 2 Slot Machine License. For all intents and purposes, the Foxwoods Casino Philadelphia project is now dead. Importantly, this means that a Category 2 Slot Machine License is now available in Pennsylvania, although it is unclear exactly what will happen with that license.

The PEDP project dates all the way back to 2005, when PEDP was one of five applicants for the two Category 2 Slot Machine Licenses allocated to the City of Philadelphia. In December 2006, PEDP was awarded one of the two licenses. In May 2008, the license was actually issued, and PEDP was required to begin operation of 1,500 slot machines within one year. However, PEDP was unable to even begin construction by May 2009, let alone have a facility operational. The PGCB granted a number of extensions to PEDP, and imposed a number of conditions that PEDP was required to meet in order to remain eligible for extensions. Ultimately, PEDP was found to have violated its conditions, and was subject to substantial fines by the PGCB.

PEDP then made several efforts to take on additional investors to help with the project, but none were successful. As a result of PEDP’s failure to comply with its conditions and have an operational facility, the PGCB’s Bureau of Investigations and Enforcement (“BIE”) filed a complaint for license revocation in April 2010. Both the BIE and PEDP filed cross motions for summary judgment. In December 2010, the PGCB granted the BIE’s motion and revoked PEDP’s license. Notably, the PGCB concluded that PEDP no longer had the financial ability to develop a casino.

PEDP appealed to the Commonwealth Court. In November 2011, the Commonwealth Court affirmed, finding that the lack of financial ability combined with PEDP’s repeated violations of the PGCB’s orders constituted sufficient cause to revoke the license. PEDP petitioned the Pennsylvania Supreme Court for allowance of appeal, which was denied, thus ending PEDP’s chance at retaining its license.

Under the statute governing Pennsylvania casinos, there is now a Category 2 Slot Machine License available in Philadelphia. There have been legislative discussions, however, about amending the statute to allow that license to be awarded somewhere else in the state, or eliminating the license altogether. PGCB Chairman William Ryan has stated that it is his intent to allow the General Assembly to consider what it wants to do before the PGCB takes any action to re-bid or award the available Category 2 license. It could, therefore, be some time before this issue is resolved.