SugarHouse HSP Gaming, L.P. v. Pennsylvania Gaming Control Board; Market East Associates, L.P. v. Pennsylvania Gaming Control Board

Summary

The Supreme Court of Pennsylvania considers consolidated challenges to the Pennsylvania Gaming Control Board’s supplemental adjudication concerning the award of a Philadelphia Category 2 slot machine license to Stadium Casino, LLC. The court dismisses SugarHouse’s petition for review, affirms the Board’s determination that Stadium was not disqualified under Section 1304(a)(1) of the Gaming Act, and reverses the Board’s interpretation of “financial interest” under Section 1330. The matter is remanded for further proceedings concerning Watche Manoukian’s post-licensure financial interest in Stadium.

Holdings

1. SugarHouse did not waive its appellate claims by failing to appeal the hearing officer's action to the Board because the Board's procedural rules did not clearly notify litigants that such an appeal was required to preserve issues for appellate review.
2. SugarHouse was not entitled to intervene in the remand proceedings or appeal concerning Manoukian's compliance with Sections 1304 and 1330 because the Supreme Court's prior decision had finally resolved SugarHouse's lack of intervention rights on those issues under the law-of-the-case doctrine.
3. A financial interest under Section 1330 is a legally enforceable monetary right or claim against another slot-machine licensee, or an investment in another slot-machine licensee, exceeding 33.3% of the value of that licensee's financial assets. The definition includes loans and similar monetary arrangements.
4. The Board complied with the remand order by issuing a Supplemental Adjudication based on the existing record, but the record was insufficient to determine whether Manoukian would violate Section 1330 because the nature of his equity infusion and the transaction transferring his interest in Sterling Fiduciary had not been established. The matter therefore had to be remanded for further proceedings and factual development.
5. Manoukian, Stadium, and their affiliates were not eligible to apply for a Category 1 slot-machine license during Stadium's Category 2 application process because they had not been approved for or issued a horse or harness-racing license for a location other than the location covered by the existing Parx Casino license.

Questions Presented

1. Whether SugarHouse waived its appellate claims by failing to seek review by the Gaming Control Board of the hearing officer's disposition of its petition to intervene.
2. Whether SugarHouse was entitled to intervene in the remand proceedings or appeal concerning Stadium's compliance with 4 Pa.C.S. §§ 1304 and 1330.
3. Whether the Board complied with the Supreme Court's remand order by issuing a Supplemental Adjudication based on the existing record rather than conducting a formal evidentiary hearing.
4. What constitutes a financial interest under 4 Pa.C.S. § 1330 and whether Manoukian's planned transactions could place his financial interest in Stadium above the statutory 33.3% limit.
5. Whether Manoukian or Stadium was eligible to apply for a Category 1 slot-machine license during Stadium's Category 2 application process.

Disposition

reversed_and_remanded