The partners in the failed Foxwoods Philadelphia project, its license having been revoked in 2010 by the Pennsylvania Gaming Control Board, has gone to court in an attempt to secure a refund of its million licensing fee.
The group of 13 local investors and Connecticut’s Mashantucket Pequot Indian tribe, known officially as Philadelphia Entertainment and Development Partners (PEDP) filed a complaint through the federal bankruptcy court against the state and the Pennsylvania Department of Revenue last week, claiming Pennsylvania’s refusal to refund the $50 million fee after revoking the project’s license constitutes an “unconstitutional taking” and “unjust enrichment.”
It is the latest action by a group that fell victim to the recession in its bid to open Philadelphia’s second casino. The Mashantucket Pequot tribe, which owns the original Foxwoods resort in Connecticut, ran out of funding to finance the project and sought partnerships first with Wynn Resorts and then with the former Harrah’s Entertainment to finish financing and construction plans.
After both of those partnerships fell through, the gaming board revoked the partners’ license in December 2010 on the grounds it failed to meet deadlines for financing plans and blueprints for the project. The license was rebid, and the board is currently evaluating five applications for the second Philadelphia casino.
PEDP filed for federal bankruptcy relief on April 1, stating it has claims of $23.6 million from creditors, with the $50 million license fee it turned over to the state with its application as its only asset. The state’s refusal to return the fee was based on amendments to the gaming law passed in 2010 that provide Pennsylvania immunity from having to refund fees. The Foxwoods partners say that provision cannot apply to them, since it was passed after their application process.
The Pennsylvania Department of Revenue, named in the suit, has taken the position that gaming license fees are the purview of the Gaming Control Board. Neither the revenue department nor the gaming board would comment on the ongoing litigation.
