Sportsbook Prospects Dimmed At Westmoreland Mall Mini-Casino

The developer hoping to avoid a $10 million sportsbook fee for its Westmoreland Mall mini-casino has been rebuffed by the PA gaming board.

A sportsbook will evidently not be part of the gambling picture if and when a mini-casino opens at Westmoreland Mall in suburban Pittsburgh.

Stadium Casino LLC was rebuffed by the Pennsylvania Gaming Control Board Wednesday morning in an attempt to have a $10 million fee waived if it includes a sportsbook in its Live! Casino project in Westmoreland County.

The company, an affiliate of Baltimore-based The Cordish Companies, had hoped the mini-casino sportsbook could be covered under the same $10 million license it has obtained for its future Live! Hotel & Casino Philadelphia sports betting operation.

Company officials presented testimony to the gaming board Oct. 30 that it would make no economic sense to pay $10 million for a retail sportsbook at a mini-casino.

“An additional fee cannot be justified, won’t be paid, and is a mirage,” according to the company’s presentation.

Odd voting requirement rebuffs majority support

A majority of board members actually agreed with the company in Wednesday’s 4-3 vote, conducted by public teleconference call due to the COVID-19 pandemic. But in a rare twist, that majority was insufficient for the decision to win approval.

The state’s gaming law requires that licensing actions achieve a “qualified majority,” which consists of all four legislative appointees granting approval plus at least one of three gubernatorial appointees.

In this case, the four legislative appointees unanimously supported the Stadium Casino request, but none of the three chosen by the governor — chairman David Barasch and members Obra Kernodle IV and Denise Smyler — did so.

None of the board members commented before or after the vote. Presumably, they discussed the issue in an executive session that was held by phone Tuesday, although such conversations are not revealed publicly.

A statement released afterward by The Cordish Companies expressed disappointment with the gaming board’s decision affecting the mini-casino, which is still to have 750 slot machines, 30 table games, and dining/entertainment.

“While other gaming companies have postponed and canceled projects, and shed thousands of jobs, our company is investing close to $1 billion in the Commonwealth, creating thousands of new jobs in one of the most economically challenging periods in our country’s history, and will pay hundreds of millions in taxes to the Commonwealth when open,” Cordish said.

The company has declined, however, to discuss the present status of the mini-casino project and whether work on it is proceeding to complete it late this year despite the coronavirus threat. Construction has halted on two mini-casino projects planned by Penn National Gaming in central Pennsylvania, but Stadium Casino and its contractor obtained a state waiver to continue work on the far larger Philadelphia casino project, which itself is to be completed later this year.

Company cites unfair playing field with OTBs

Stadium Casino officials in October laid out the bind they felt unfairly jeopardized their mini-casino sportsbook effort.

They noted that Penn National Gaming’s mini-casinos, because they are attached to the Hollywood Casino racetrack-casino’s license, are able to include OTB parlors that can also contain sportsbooks with no additional fee required by the state.

No such OTB operation is available to the Live! projects. While nearly all of the state’s large casinos have found it worthwhile to pay a $10 million fee for a retail sportsbook, company officials said that would be unjustified at the much smaller mini-casino.

“As you look at the direct revenue associated with sports betting, though it’s been an impressive start [at existing Pennsylvania sportsbooks], it’s a very small fraction of overall gaming revenue,” Rob Norton, president of Cordish Gaming Group, told the board Oct. 30.

He said, however, that the sportsbook would be a valuable amenity in helping attract patrons to the mini-casino and making it as complete and attractive an entertainment destination as possible.

State lawmakers from Westmoreland County backed the company’s position, telling the board the legislature did not account in its 2017 gaming expansion for the possibility of some mini-casinos owing a hefty sportsbook fee and others avoiding it. The measure was passed when legal sports betting still seemed a distant possibility in Pennsylvania, as the U.S. Supreme Court had not yet acted to permit it outside of Nevada.

As with any state agency decision, Cordish and Stadium Gaming have the right to appeal it to Commonwealth Court, although there was no indication they will do so.

If no sportsbook is included in the mini-casino, the company would presumably attempt to steer patrons to use of its Live! online/mobile sportsbook, which is expected to launch in partnership with FanDuel later this year as part of the new Philadelphia casino’s license.

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