civus
Hearing video

ZBA Hearing - February 10, 2021

Philadelphia Zoning Board of Adjustment (ZBA)Feb 10, 20218h 33m

wagering if you are not licensed for slot machines. You don't have to ever have a single slot machine

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in your location. You don't have to have a poker table. You don't have to have a craps table. You

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don't have to have blackjack. You don't have to have anything having to do with what we would

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consider normal casino operations, but in order to get the certificate that authorizes you to be

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sportsmate, to offer sports wagering, you must have a slot machine license, whether you ever

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put a slot machine in at all. It's irrelevant. You must be a slot machine licensee in the state

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of Pennsylvania to offer sports wagering. So now because we, I'm going to stop sharing here.

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so because the city of philadelphia in its code defines casino as a licensed facility as defined

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by the gaming act okay so we we piggyback on what the state to us a casino is whatever the state

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says a licensed facility is in fact it's interesting because the word casino doesn't

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even appear in the state's gaming code. Well, it might somewhere, but it doesn't appear anywhere

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in the definition section. It is a gaming facility. It is a licensed facility. If you,

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in order to offer sports wagering in the state of, in the Commonwealth of Pennsylvania,

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In order to offer sports wagering in the Commonwealth of Pennsylvania, you must be a licensed facility.

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Therefore, if you offer sports wagering, you are a casino under the Philadelphia Code.

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Because our code says if you're a licensed facility, you're a casino.

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In order to offer sports wagering, you must be a licensed facility.

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Ergo, you must be a casino by definition.

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Now, what Mr. Matione was referring to having to do with, again, off-track betting and things like that, we're not talking about the off-track betting part of this.

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If they had never used the phrase sports wagering or sports betting in their application, we still probably would have reviewed it because Mr. Bonney had originally challenged the referral, but I think we would have sided with the initial referral.

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The problem here is the sports wagering side of this.

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Now, if Mr. Mattione and his client are going to say here and come here and testify under oath that they will never, ever offer anything other than horse race betting, then this might be a different outcome.

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But they use the phrase sports wagering.

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And Mr. Mattione, in his own summation, also used the phrase sports wagering.

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So if they're not talking about horse races, they're a casino.

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You answered a couple of my questions.

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Thank you.

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so but for the terminology of sports wagering we might not be having this conversation is that

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correct well i would say i would be i think they're being protestants about even straight out

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i understand that sure sure no from the city standpoint from lni standpoint we might not be

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having this conversation if there was no apparent now maybe the use of sports wagering and sports

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betting was mistaken on their part when the application was submitted and when the application

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for the special exception to the review by the board was submitted. But the phrase sports

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wagering and sports betting is used throughout the paperwork by the applicants. So if they just

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meant horse track betting, off track horse racing betting, that would be different. But sports

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wagering and i can't imagine that they don't understand this because as you know parks is

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involved in this parks runs an undisputed casino uh you have a casino that just opened four blocks

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away from here off track the people who do off track betting the turf club they know what off

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track betting is and they know the difference between off track betting and sports betting

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so when they say they're going to offer sports betting they're telling us this is going to be

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casino by definition whether they have table games slot machines or not and that's the problem and

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so let me let me ask if they were to amend the application and i'm not saying they'd be willing

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to do that if they were to amend the application to take out the word sports betting and strictly

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talk about otb off-track horse betting then this would be a special exception case okay thank you

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Mr. Mattione?

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I agree with that last point.

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Okay. Mr. Mattione, do you have any comment about that?

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Absolutely. I think that the city's position is completely incorrect.

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When you look at the zoning code, section 146017C2, casino, it's called a licensed gaming facility,

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as is authorized by the Commonwealth of Pennsylvania, pursuant to 4PACS Part 2,

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Pennsylvania Horse Race Development and Gaming Act. A casino may be referred to as a licensed

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gaming facility. Then if you go to the definition in 4 PACS that defines licensed facility,

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it's very specific. It says a licensed facility is as follows. The physical land-based location

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at which the licensed gaming entity is authorized to place and operate slot machines and if

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authorized by the Pennsylvania Gaming Control Board under Chapter 13A to conduct table games

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and authorized under Chapter 13B to conduct interactive gaming.

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It does not include, which is defined elsewhere, non-primary locations, which is what this is.

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This is a non-primary location.

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Non-primary location is any facility in which pari-mutual wagering is conducted by a licensed racing entity

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other than the racetrack where live racing is conducted.

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It's interesting because licensed facilities specifically does not include non-primary

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locations.

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This is a non-primary location.

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Non-primary locations are permitted to do two things, have off-track betting and have

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sports wagering, but they were not included, specifically not included, in the definition

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of licensed facility, which is what the zoning code defines as a casino.

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We cannot be a casino under the State Act because we are not a licensed facility under the State Act as is defined specifically.

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are not a licensed facility under the State Act as is defined specifically because it's only where

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the casino is authorized to place and operate slot machines. That is not this site. This is

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a non-primary site. The zoning code specifically refers, as Mr. Werder correctly said, to the State

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Act to define casino and that is what we are. We're not a casino at this operation. Yes, it has sports

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betting and it has horse track

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betting. But because of

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the way licensed facility is

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defined and they rely on it in the city

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ordinance, we are not a

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casino. And we cannot be

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called a casino. We are an entertainment

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assembly. I understand that

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but this board has been being

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tasked with the question of

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whether or not originally

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we would approve a special

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exception for the purpose

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of

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the Cherokee family

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leasing space within Chickie and Pete's for the sole purpose of horse racing bets,

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betting on horses, correct?

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Not for a slot machine, table games, or anything like that, correct?

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Is that accurate?

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Mr. Chairman, the application was to have off-track betting and sports wagering.

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It was not to have slot machines, not to have table games, any of those other things.

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The issue that has been raised is whether us having sports wagering makes us a casino.

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And it is our position, and I think it's abundantly clear under the city code and the state statutes,

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that we are not a casino just because we have sports wagering.

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We will not and cannot and are prohibited by the state act from having slot machines and table games.

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We cannot be a casino.

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And correct me if I'm wrong, in order to be able to do the things that you just said you're not going to be able to do, you would need state authorization.

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It would be a separate license, correct?

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Correct, Mr. Chairman.

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If I might respond to this, and I think that's kind of the key point that you just raised, Mr. Chairman. Again, we strongly disagree that merely by being a non-primary location for parimutuel bedding, they cannot be a licensed facility and therefore they can't be a casino.

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I mean, on that, we definitely do agree.

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However, if you look at the state code's definition of a non-primary location, it does not allow sports wagering at all.

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And in fact, you know, I think the problem here is, in fact, actually, I could pull it up.

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Let me just pull it up.

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No, I'm just thinking out loud.

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that for me sports wagering if i'm betting on a horse it's sports to me it's sports wagering i

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mean the terminology i mean it's it's all over the place i i understand that but but uh but for

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again because betting on horses has been permitted going back probably to harness racing in the 1910s

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yeah i'm not i'm not i'm not arguing with you i'm just saying it's it's betting betting is betting

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right i mean i guess people could quibble whether horse racing is a sport uh um but that's that's a

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different thing um the bottom line though is that again non-primary location as defined by the state

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is a facility in which paramutual wagering is conducted by a licensed racing entity other than

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the racetrack where the live racing is conducted i.e that's basically off-track betting there's

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nothing in the definition of non-primary location that would allow sports wagering. And I would

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point out, as a matter of fact, that if you were to offer sports wagering at a location that was

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not a licensed facility under state law, you would be committing a criminal act. The state law

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provides for criminal penalties for offering sports betting if you are not following the

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specific rules regarding licensed locations. What I might offer here, again, and I am not at all

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suggesting that Mr. Mattione and his clients do not have a frivolous argument or anything here.

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I understand their argument, and we strongly disagree with it. But since so much of this is

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going to depend upon what the state believes the law is, perhaps there might be some, and it's

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totally up to Mr. Matione if he were to do this, but I would ask, A, have they approached the

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state about this application? And whether they have or they haven't, would they be willing to

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get an opinion from either the attorney, from I suppose the Attorney General or the Gaming

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Commission with respect to this particular proposal to offer sports wagering at this location?

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with respect to this particular proposal to offer sports wagering at this location.

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We don't have a problem with the parimutuel betting.

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Mr. Chair, can I speak for a couple minutes?

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Let's see if Matt Mattione has any response to Leonard's statement, then we'll get to you.

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We will absolutely not seek some opinion of the Attorney General or some other body.

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In 2018, the state legislature permitted sports wagering to be conducted at non-primary locations, specifically permitted it for following the state law and for following the definitions of non-primary locations, licensed facilities, and the zoning code definition, which tracks the state.

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This is not a casino. You can't make it a casino. Even if you think it looks like one,

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it doesn't meet the definition. And doing anything other than calling this a special exception is an

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error of law. Mr. Chair, thank you. I have some things to put on the screen, the state statute

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basically. And depending upon how long we go, I may have other exhibits to show. But

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there's a couple things I'd like to try and clarify right up front. There's a few red herrings

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going on, I think, as Mr. Reuter mentioned. The horse racing and the OTB, for the purposes of the

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legal question before you today, those are not relevant. We're not talking about the OTB and the

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horse racing. We're talking about the sports wagering. The sports wagering, in this case,

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of course, is betting on all the major leagues, football, basketball, blah, blah, blah. And of

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course, it's betting in-game, the rapid in-game betting that who is going to, is the next pitch

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going to be a strike or a ball is the kick going to go through the field goal or not those are the

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those that's what sports betting is today it's a it's not your you know that phrase it's not

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your father's Oldsmobile where it's not your father's sports betting it's it's a it's a brand

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new type of operation the second red herring is whether there's going to be slot machines in here

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or not. I'm here today to tell you that we don't dispute that. They're not planning that. If they

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have to do, if they want to do slots, they'll have to get other approvals, which they're not going to

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get. That shouldn't be part of this discussion. The question is whether under state law, the

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operation that they're going to put here, that they want to put here, meets the definition under

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the zoning code of what a casino is. Not the definition in your head, or not the definition

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of what you think of, what you imagine is on the boardwalk in Atlantic City, but the definition of

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the, that's in the Philadelphia zoning code. And I'm going to put up here

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the definition that we're dealing with. Right here. I'll make it a little bit bigger.

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This is, if it was just assembly and entertainment, which is the generic assembly and entertainment at the top of the page, then it would need just a special exception.

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But if it meets this definition in yellow, then it needs a refusal and it needs a variance.

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So the question is this one sentence, is what is being proposed here a licensed gaming facility as authorized by Pennsylvania pursuant to the Gaming Act?

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Now, Mr. Mattione was very careful in what he said in his presentation, and I believe that he's trying to imply something to you that he didn't actually say.

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he's trying to make you make a leap of faith that is not appropriate these three words

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licensed gaming facility okay that's those are three words that he talked about that phrase

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licensed gaming facility well and then he jumped to the state law and told you what he thinks that

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means but when he talked about that he only talked about licensed facility not this three-word phrase

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he talked about a two-word phrase. And the reality is, and Mr. Mattione in his 17-page memorandum

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drops a footnote where he acknowledges this, so I appreciate the footnote at least, where he says

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that the phrase that we're looking at here, licensed gaming facility, is not a defined phrase

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anywhere. It's not defined in the city zoning code, it's not defined in the state.

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It's not defined in the city zoning code.

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It's not defined in the state law.

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So therefore, it's incumbent upon us to look to state law and say, is this something that is licensed or not?

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Now, Mr. Mattione then goes off on a tangent by saying, well, the sports book is licensed under the racing commission.

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Well, we don't care about the sports book.

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If he was only doing that, it would be a different story. What we care about is the sports wagering. And then as I'm flipping over here to the state law, we see that in order to get an authorization to do sports wagering, this is the sports wagering chapter of the Gaming Act that was added in 2017.

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In order to do sports wagering, you have to get what's called a sports wagering certificate.

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Well, a sports wagering certificate can only be issued to a slot machine licensee.

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Even the next definition about a sports wagering certificate holder can only go to a slot machine licensee.

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Again and again and again, in this Gaming Act that authorizes and regulates sports wagering, it is clear as day that the authority can only be granted to a licensee, a slot machine licensee.

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So is this facility licensed if they would open? We assume they would open for purposes of this discussion here. That's the proposal at least. Would this operation at 1526 have a license under the Gaming Act, authorized and regulated entirely by the Gaming Control Board under the Gaming Act?

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Absolutely. Absolutely. And I don't, there can't be any dispute about that because if there is, they'd be, they'd be breaking state law. Now let's, I've got a phone call, but let me go back here.

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Sharing is paused. Bring your shared window to the front. Okay, thanks. Let's continue.

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to the operative section.

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Oh, and I would also add that once the certificate is awarded,

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once the certificate to do sports wagering is awarded,

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as we see at the top of the page here,

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their main license, their slot machine license is amended

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upon awarding the sports wagering operation certificate, the board shall amend the slot

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machine licensee's statement of conditions. The statement of conditions is part of the license.

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So this entire operation, the mother of all approvals for this operation is the state

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gaming license, is the slot machine license. And by the way, this is not a unique format or not a

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unique regulatory structure. Indeed, if you recall, when the Gaming Act was first passed,

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it was for slot machines only. There was no table games. But about a year later,

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before the facilities were built the legislature amended the gaming act to add table games

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well they didn't add table games by virtue of having to get a new license no they added table

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games you have to get a certificate so when they added a new type of gaming they said you have to

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get a certificate and then in 2017 when they added sports way sports gambling or sports betting

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That, too, was by certificate. But it's always, at all times, any of these types of gamblings are always by only a company that has a license, a gaming license, in this case, a Category 1 slot machine license.

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And I'm going to keep going just to finish through with this statute.

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Here in fact is where the board, by petition, the Game and Control Board, under this section

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which is 13C21, says the board may determine the suitability of a Category 1 licensed Game

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may determine the suitability of a category one licensed gaming entity that is also a racing

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entity under the racing act to conduct sports wagering at a non-primary location. So again

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