SugarHouse HSP Gaming, L.P. v. Pennsylvania Gaming Control Board
162 A.3d 353
Pa.2017Background
- Pennsylvania Gaming Control Board awarded the last Category 2 Philadelphia slot license to Stadium Casino, LLC in 2014; SugarHouse (existing Category 2 holder) and Market East (unsuccessful applicant) appealed.
- On March 29, 2016 this Court (SugarHouse I) affirmed in part, vacated in part, and remanded limited questions: (1) whether affiliate Watche Manoukian was eligible to apply for a Category 1 license at the time Stadium applied (impacting §1304(a)(1)); and (2) whether Manoukian would hold a post-licensure "financial interest" >33.3% in Stadium in violation of §1330. The Court asked the Board to define "financial interest."
- On remand the Board issued a Supplemental Adjudication (no new evidentiary hearing) concluding: Manoukian was not eligible to apply for a Category 1 license during Stadium’s application, and under the Board’s narrow approach Manoukian would not hold a §1330-prohibited financial interest >33.3%.
- SugarHouse sought to intervene in the remand proceedings; the Board’s hearing officer returned that petition; SugarHouse appealed the denial. Market East challenged the Board’s compliance with the remand, the Board’s definition of "financial interest," and the §1304/§1330 conclusions.
- This Court dismissed SugarHouse’s appeal (law-of-the-case: SugarHouse previously denied intervention on these issues), affirmed the Board that Manoukian was not eligible to apply for a Category 1 license, but reversed the Board’s narrow definition of "financial interest," adopted a broader monetary-rights definition, and remanded for further proceedings on whether Manoukian’s transactions yield a prohibited post-licensure financial interest.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1. Was SugarHouse entitled to intervene on remand? | SugarHouse: still has direct economic interest and no other party represented its interests on remand; OHA should have considered intervention petition. | Board: prior decision limited SugarHouse’s intervention to market-saturation only; law of the case bars re-litigation; Hearing Officer return exhausted remedies. | Dismissed SugarHouse’s petition — law of the case upheld; prior denial of intervention binding; not entitled to intervene on remand. |
| 2. Did the Board comply with the Court’s remand (must it hold new hearings)? | Market East: "further proceedings" required a new evidentiary hearing and opportunity to present new evidence/argument. | Board: remand gave discretion; existing record sufficed; issuing a Supplemental Adjudication satisfied remand. | Affirmed Board’s procedure: agency has discretion; reviewing court did not require a new hearing here; Supplemental Adjudication was permissible. |
| 3. What is a "financial interest" under §1330 and does Manoukian exceed 33.3%? | Market East: term should use ordinary/expanded meaning (monetary rights, loans, equity, etc.); Manoukian’s pledged equity infusion and trust arrangements could create >33.3% financial interest. | Board: adopt narrow, quantifiable definition excluding many contractual/loan interests; promissory notes/contracts fall outside absent special facts; existing record shows compliance. | Reverse Board’s narrow definition; Court adopts a broad definition covering legally enforceable monetary rights/claims (including loans) and remands for further fact-finding on the equity infusion/transactions to determine if §1330 is violated. |
| 4. Was Manoukian "eligible to apply" for a Category 1 license during Stadium’s application (impacting §1304(a)(1))? | Market East: Greenwood affiliation makes Manoukian presumptively eligible; eligibility for Category 1 need not be location-restricted for purposes of §1304. | Board: §1302 requires an applicant to hold or be approved for a horse/harness racing license tied to a specific location; Manoukian/affiliates had no such separate license during the relevant period. | Affirmed Board: under §1302 eligibility requires the predicate horse/harness racing license for the location; Manoukian was not eligible to apply and §1304(a)(1) was not violated. |
Key Cases Cited
- SugarHouse HSP Gaming, LP v. Pennsylvania Gaming Control Board, 136 A.3d 457 (Pa. 2016) (prior opinion remanding narrow questions re §1304 and §1330)
- Dilliplaine Valley v. Lehigh Valley Trust Co., 322 A.2d 114 (Pa. 1974) (establishing modern waiver/preservation principles)
- Wing v. Commonwealth Unemployment Compensation Board of Review, 436 A.2d 179 (Pa. 1981) (applying preservation/waiver principles to administrative appeals)
- Goods v. Pennsylvania Board of Probation and Parole, 912 A.2d 226 (Pa. 2006) (waiver requires agency rules providing opportunity and notice)
- Pocono Manor Investors, LP v. Pennsylvania Gaming Control Board, 927 A.2d 209 (Pa. 2007) (agency procedure and appellate review of Board actions)
- Newman Development Group of Pottstown, LLC v. Genuardi’s Family Markets, Inc., 52 A.3d 1233 (Pa. 2012) (remands may encompass varying proceedings; appellate remand discretion)