A filing submitted to the Pennsylvania Supreme Court asking that the award of the second Philadelphia casino license to the Stadium Casino group be sent back to the state gaming board alleges that the Market East group, a losing bidder for the license which first appealed the award to the court, demanded SugarHouse pay them to cover costs of a second appeal.
SugarHouse is filing a petition to intervene in the case challenging the second Philadelphia casino license, which was sent back to the state Gaming Control Board at the end of July to determine whether the ownership stake of Watche “Bob” Manoukian, a principal in Stadium partner Greenwood Gaming, violates the state gaming law’s provision that no owner of 85 percent or more of one state casino can own more than a third of a second property.
Should the board determine that the award was proper—it is the second time it has considered the issue; the board found no illegality the first time—a new appeal can be filed with the Supreme Court. In its petition to intervene, SugarHouse included an email from Market East owner Ken Goldenberg to Neil G. Bluhm, CEO of SugarHouse parent Rush Street Gaming, asking for $100,000 a month to cover appeal cost, and to make payments until the case is decided and Market East’s casino opens.
According to a report in the Philadelphia Inquirer, SugarHouse said in the filing that the request was part of a “series of extortionate demands” from Goldenberg, all of which SugarHouse refused.
“In particular, Market East demanded that SugarHouse pay Market East’s past and future appeal costs, pay Market East $100,000 a month until such time as Market East opens a casino in Philadelphia, and assist Market East with ‘financing and otherwise sourcing funds’ for the project,” the court document said.
“And Market East further conditioned its continued participation in this case on SugarHouse’s agreement that in the event SugarHouse recants or defaults in any way, with respect to Market East’s demands, Market East would get the ‘greater of $___million or ___% ownership of (SugarHouse’s) casino businesses.’”
SugarHouse “rejected outright Market East’s demands,” the court filing said. According to the email exchange, Bluhm responded: “What you have proposed is ridiculous. I would not agree to any part of it.”
Bluhm and SugarHouse have insisted the casino’s participation in the appeal is based solely on the argument that the Philadelphia-area gaming market is already oversaturated, which would cause a second city casino to cannibalize the revenues current properties in the region.
