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Castille, C.J., Saylor, Eakin, Baer, Todd, Mccaffery, Greenspan, Jj. v. Pennsylvania Gaming Control Board

March 8, 2011

CASTILLE, C.J., SAYLOR, EAKIN, BAER, TODD, MCCAFFERY, GREENSPAN, JJ. GREENWOOD GAMING AND ENTERTAINMENT, INC., PETITIONER
v.
PENNSYLVANIA GAMING CONTROL BOARD, RESPONDENT
VALLEY FORGE CONVENTION CENTER PARTNERS, L.P., INTERVENOR



Appeal from the Order of the Pennsylvania Gaming Control Board, No. 19421, dated May 8, 2009

The opinion of the court was delivered by: Mr. Justice McCAFFERY

[J-81-2009]

ARGUED: October 21, 2009

OPINION

In this appeal, we consider whether Appellee, the Pennsylvania Gaming Control Board (the "Board"), properly approved a Category 3 slot machine license application submitted by Intervenor, Valley Forge Convention Center Partners, L.P. ("Valley Forge Partners"), pursuant to the Race Horse Development and Gaming Act (the "Gaming Act"), 4 Pa.C.S. §§1101-1904. Upon careful review of the record, the briefs of the parties, and the relevant law, we determine that the Board properly approved the Category 3 slot machine license, and we affirm.

On June 29, 2007, Valley Forge Partners submitted an application to the Board for a Category 3 slot machine license to operate no more than 500 slot machines at the Valley Forge Convention Center in King of Prussia, Montgomery County. Appellant, Greenwood Gaming and Entertainment, Inc. ("Greenwood"), which owns and operates Parx Racing and Casino, a thoroughbred racetrack and casino with 3,300 slot machines in Bensalem, Bucks County, challenged Valley Forge Partners' eligibility to obtain the license under the Gaming Act. A number of hearings were conducted and a voluminous documentary and testimonial evidentiary record was created, including evidence that access to the gaming area would be limited to those individuals who were overnight guests at or patrons of the Convention Center's amenities. There was also evidence submitted to support a showing that Valley Forge Partners had adequate financing for the project, and that the Convention Center is more than fifteen miles from any other licensed slots facility in Pennsylvania.

On May 8, 2009, the Board approved the application and issued a written adjudication that, among many other things, determined that Valley Forge Partners is the owner of the Valley Forge Convention Center, and that the Valley Forge Convention Center is a well-established resort hotel under the Gaming Act. On June 5, 2009, Greenwood filed a petition for review in the nature of an appeal from a final adjudication, requesting that this Court reverse the Board's order approving the application, citing this Court's exclusive jurisdiction over the appeal pursuant to Section 1204 of the Gaming Act.

The Gaming Act gives the Board extensive powers over gaming in Pennsylvania, including the specific power and duty, "[a]t its discretion, to issue, approve, renew, revoke, suspend, condition or deny issuance or renewal of slot machine licenses." 4 Pa.C.S. § 1202(b)(12). The Gaming Act further provides that, notwithstanding statutory provisions relating to judicial review of Commonwealth agency actions and direct appeals from government agencies, this Court's review of Board decisions is limited to determining whether the Board: (1) erred as a matter of law; or (2) acted arbitrarily and in capricious disregard of the evidence. 4 Pa.C.S. § 1204; Pocono Manor Investors, L.P. v. Pennsylvania Gaming Control Board, 927 A.2d 209, 216 (Pa. 2007). If the Board has not committed an error of law or acted arbitrarily and in capricious disregard of the evidence, we must affirm. 4 Pa.C.S. § 1204.*fn1 Capricious disregard entails a "willful and deliberate disregard of competent testimony and relevant evidence which one of ordinary intelligence could not possibly have avoided in reaching a result." Riverwalk Casino L.P. v. Pennsylvania Gaming Control Board, 926 A.2d 926, 929 (Pa. 2007). The Board's decision is to be given great deference, and this Court is not to substitute its judgment for the Board's nor intrude upon the Board's fact-finding role and discretionary decision-making authority. Station Square Gaming, L.P. v. Pennsylvania Gaming Control Board, 927 A.2d 232, 238 (Pa. 2007). Under the capricious disregard standard, relief will rarely be warranted. Id. at 237-38.

On appeal, Greenwood raises the following issues, which we reproduce verbatim, but have re-ordered for ease of discussion:

1. Did the Board err as a matter of law, and act arbitrarily and in capricious disregard of the evidence, by concluding that the Valley Forge Convention Center is a well-established resort hotel?

2. Did the Board commit an error of law by awarding a Category 3 Slot Machine license to an Applicant that is not an owner of the well-established resort hotel?

3. Assuming arguendo equitable ownership is legally sufficient and present, did the Board err as a matter of law by awarding a license to the Applicant where such equitable ownership admittedly did not exist at the time of the application?

4. Did the Board commit an error of law and capriciously disregard the evidence in relation to the Applicant's plan limiting access to the gaming floor to overnight guests and patrons of the amenities?

5. Was the Board's decision that the Applicant was suitable for licensure arbitrary and in capricious disregard of the evidence?

Appellant's Brief at 5.

The Gaming Act provides, in relevant part, as follows:

A person may be eligible to apply for a Category 3 license [500 or fewer slot machines] if . the person is seeking to locate a Category 3 licensed facility in a well-established resort hotel having no fewer than 275 guest rooms under common ownership and having substantial year-round recreational guest amenities. The applicant . shall be the owner or a wholly owned subsidiary of the owner of the established resort hotel. A Category 3 license may only be granted upon the express condition that an individual may not enter the gaming area of the licensee if the individual is not a registered overnight guest of the established resort hotel or if the individual is not a patron of one or more of the amenities provided by the established resort hotel. .

4 Pa.C.S. § 1305(a)(1).

In support of its first issue on appeal, Greenwood argues that the Board ignored the fact that the Valley Forge Convention Center does not hold itself out as a resort, and ignored the allegedly consensus opinion of multiple experts that the Convention Center is not a resort hotel, but is instead, a convention hotel.*fn2 Central to its argument is the contention that the Valley Forge Convention Center "has always and continues to hold itself out as a convention center and not a resort. The applicant's name, the facility's name, its marketing materials, letterhead and internal signage all call itself a Convention Center. There is not a single mention of the facility as a resort." Appellant's Brief at 34 (emphasis in original). Thus, Greenwood contends the Board's decision was arbitrary and in capricious disregard of the evidence, and that the Convention Center is, as a matter of law, a convention hotel, and not a resort hotel.

The Board responds that the Valley Forge Convention Center provides numerous amenities that would typically be found at a resort hotel, and that expert testimony at the hearings established that there is significant overlap, according to industry standards, between a resort hotel and a convention hotel. The Board points out that Greenwood did not present any expert testimony on the Convention Center's status as a resort hotel, and that the testimony of the only expert who did testify on the subject, Peter Tyson, Vice President of PKF Consulting, established that the Convention Center meets the "substantial year-round amenities test" under the Gaming Act. Appellee's Brief at 31-32.

The Gaming Act does not define "well-established resort hotel." In concluding that the Valley Forge Convention Center is a well-established resort hotel that offers substantial year-round recreational guest amenities, the Board considered the criteria it had adopted by regulation, as follows:

To qualify as a well-established resort hotel with substantial year-round recreational guest amenities, the resort hotel must offer at the resort hotel a complement of amenities characteristic of a well-established ...


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