The battle over the Pittsburgh casino isn't over just yet.
Both losing bidders in the competition are challenging the Dec. 20 decision by the state Gaming Control Board to award the license to Detroit businessman Don Barden, who plans to build a $435 million casino in Chateau near the West End Bridge.
Forest City Enterprises and Isle of Capri Casinos Inc. filed appeals yesterday with the state Supreme Court, a move that could, at the least, further hamper Mr. Barden's ability to get his casino open by summer 2008. He already has pushed back the opening from March 2008.
In its appeal, Isle of Capri, which had pledged $290 million for a new arena in Pittsburgh, asked that the award of the license to PITG Gaming LLC, Mr. Barden's company, be reversed and then given to Isle of Capri.
Forest City Enterprises, doing business as Station Square Gaming, wants the decision vacated and returned to the gaming board for further action.
Under the state's gambling law, the Supreme Court must affirm the award of a casino license unless it finds that the gaming board "committed an error of law or that the order, determination or decision of the board was arbitrary and there was a capricious disregard of the evidence."
The appeals are the latest wrinkle in the bitter and hotly contested battle for the Pittsburgh casino license, in which Mr. Barden emerged as the winner with a proposal to build a casino between Carnegie Science Center and the West End Bridge, help fund a new arena and redevelop the lower Hill District.
In its Feb. 1 order affirming the award, the gaming board judged Mr. Barden's casino to be the "best fit" for Pittsburgh and said that his personal commitment and "undeniable dedication to make this project a success ... speaks volumes to his character and suitability for the license."
It also said Forest City was hurt by traffic concerns at its proposed Station Square site. The board also had worries about the impact of Isle of Capri's proposed Uptown casino on the Hill District.
In its appeal, Forest City attacked the financial fitness of PITG Gaming to hold the license, arguing that the company is "financially unstable, vulnerable to default, and has no history of a stable or growing operating experience, facts which alone disqualify it as eligible for a license in Pennsylvania under the gaming act."
While PITG Gaming was set up specifically for the Pittsburgh license, Forest City said in its appeal that another of Mr. Barden's companies, Majestic Star Casino LLC, has not performed well financially and has "historic operational problems and historic track records of negative results from operations as its profitability ratios clearly indicate."
Forest City also claimed the board was wrong to award the license based on revenue projections for PITG Gaming's proposed 5,000 slot machines while at the same time rejecting "as a financially inferior proposal" Forest City's projections with 4,000 machines.
It maintained the board acted arbitrarily in treating all gambling operators as equal and assuming all will produce equal results per machine "when the evidence is overwhelming that Majestic Star is one of the weakest operators in the gaming industry and [Forest City's] gaming [partner], Harrah's, is one of the strongest operators in the gaming industry."
As for the perceived traffic woes at Station Square, Forest City said the board's consultant had not considered all of the mitigation measures it had proposed and that the board itself ignored evidence that the city and PennDOT were "satisfied" with those efforts.
While Isle of Capri was not as detailed in its petition, it said the board's decision that PITG Gaming was the "best fit" for Pittsburgh was "erroneous as a matter of law, arbitrary and capricious, an abuse of discretion, and not supported by substantial evidence."
Isle of Capri also maintained the board "abused its discretion and improperly raised concerns" that the company's exclusive agreement with the Penguins to provide $290 million for an arena, the cornerstone of its proposal, was less than ironclad.
It also questioned the board's emphasis on Mr. Barden's character and personal and financial commitment to the project, saying it was an abuse of discretion.
Mr. Barden had no comment on the appeals, spokesman Bob Oltmanns said. He would not say what effect the appeals could have on the timetable for the project.
State Gaming Control Board spokesman Doug Harbach said the board is "confident that the decisions on licensing were correct and legal, and will defend its decisions vigorously.
Chuck Ardo, a spokesman for Gov. Ed Rendell, said, "We hope the Supreme Court will consider and decide the appeals swiftly, consistent with the gaming statute and the requirements of due process."
Mr. Barden already has pushed back the proposed opening, citing the length of time it has taken to get from the Dec. 20 board award to the appeal deadline, which is Monday.
Even if Mr. Barden keeps the license, the appeals could delay the start of construction and the eventual opening far longer.
Christopher Craig, legal counsel for state Sen. Vincent Fumo, one of the architects of the gambling law, said it could take several months just for the Supreme Court to hear oral arguments. How quickly the court will rule once those arguments have been made is unknown.
The gambling law did not set up any timetable for a ruling. It simply allowed appeals to bypass Commonwealth Court, the normal starting point for such litigation, and go directly to the state's top court.
Mr. Craig said he would not be surprised to see the court decide the matter quickly.
He also indicated that Forest City and Isle of Capri could have a difficult time winning, because the gambling law's language allows for a reversal only if there's an error in law or if the board acted arbitrarily and capriciously.
The Supreme Court also will hear an appeal from Planet Hollywood, one of the bidders for one of the two licenses that were awarded in Philadelphia.
