                  [J-133-2016 and J-134-2016] [MO: Todd]
               IN THE SUPREME COURT OF PENNSYLVANIA
                              EASTERN DISTRICT


SUGARHOUSE HSP GAMING, L.P.,          :   No. 124 EM 2016

                Petitioner            :   Appeal from the Supplemental
                                      :   Adjudication of the Pennsylvania
                                      :   Gaming Control Board in the matter of
          v.                          :   the Applications for the Category 2 Slot
                                      :   Machine License in the City of the First
                                      :   Class, Philadelphia, dated June 23,
PENNSYLVANIA GAMING CONTROL           :   2016
BOARD,
                                      :   SUBMITTED: November 7, 2016
                Respondent

STADIUM CASINO, LLC,

                Intervenor

MARKET EAST ASSOCIATES, LP,           :   No. 125 EM 2016

                Petitioner            :   Appeal from the Supplemental
                                      :   Adjudication of the Pennsylvania
                                      :   Gaming Control Board in the matter of
          v.                          :   the Applications for the Category 2 Slot
                                      :   Machine License in the City of the First
                                      :   Class, Philadelphia, dated June 23,
PENNSYLVANIA GAMING CONTROL           :   2016
BOARD,
                                      :   SUBMITTED: November 7, 2016
                Respondent

STADIUM CASINO, LLC,

                Intervenor


                             CONCURRING OPINION


JUSTICE BAER                                           DECIDED: June 20, 2017
       I   join the majority opinion in substantial part, but   I   write separately to distance

myself from my colleagues' definition of "financial interest" for purposes of Section 1330

of the Pennsylvania Race Horse Development and Gaming Act ("Gaming Act"), which

prohibits a "slot machine licensee, its affiliate, intermediary, subsidiary or holding

company" from "possess[ing] an ownership or financial interest that is greater than

33.3% of another slot machine licensee" or other related entities. 4 Pa.C.S. § 1330.1




14 Pa.C.S. § 1330, entitled "Multiple slot machine license prohibition," provides in full:

                No    slot machine licensee, its affiliate, intermediary,
                subsidiary or holding company may possess an ownership
                or financial interest that is greater than 33.3% of another slot
                machine licensee or person eligible to apply for a Category 1
                license, its affiliate, intermediary, subsidiary or holding
                company. The board shall approve the terms and conditions
                of    any divestiture under this section.           Under no
                circumstances shall any such divestiture be approved by the
                board if the compensation for the divested interest in a
                person eligible to apply for a Category 1 license exceeds the
                greater of the original cost of the interest, the book value of
                the interest or an independently assessed value of the
                interest one month prior to the effective date of this part and,
                in the case of a person eligible to apply for a Category 1
                license, unless the person acquiring the divested interest is
                required to continue conducting live racing at the location
                where live racing is currently being conducted in accordance
                with section 1303 (relating to additional Category 1 slot
                machine license requirements) and be approved for a
                Category 1 slot machine license. No such slot machine
                license applicant shall be issued a slot machine license until
                the applicant has completely divested its ownership or
                financial interest that is in excess of 33.3% in another slot
                machine licensee or person eligible to apply for a Category 1
                license, its affiliate, intermediary, subsidiary or holding
                company.




                         [J-133-2016 and J-134-2016] [MO: Todd]        -   2
Unlike the Majority Opinion,          I   view "financial interest" broadly to encompass ownership

interests. See Maj. Op. at 35 n.31.

       As the Majority and the parties have observed, "financial interest" is not defined

in Section 1330.        The term, however, is defined in Sections 1201 and 1512. While                      I




agree that the definitions in Section 1201 and 1512 are limited to those specific

sections,   I   find guidance in the definitions which substantially overlap with each other

and conform to a common understanding of the term "financial interest."

       Section 1201 provides various restrictions on those who may serve on the

Gaming Control Board, including limiting a board member's "financial interest" in an

applicant or licensed facility.           It   defines "financial interest" as "[a]n ownership, property,

leasehold or other beneficial interest in an entity."                 4 Pa.C.S. § 1201(n).2      It   further

2
  4 Pa.C.S. § 1201, entitled "Pennsylvania Gaming Control                              Board established,"
provides in relevant part:

                                 As used in this section, the following words
                  (n) Definitions.    -
                  and phrases shall have the meanings given to them in this
                  subsection:

                  "Financial interest." An ownership, property, leasehold or
                  other beneficial interest in an entity. The term shall not
                  include an interest which is held or deemed to be held in any
                  of the following:

                  (1) Securities that are held in a pension plan, profit-sharing
                  plan, individual retirement account, tax-sheltered annuity, a
                  plan established pursuant to section 457 of the Internal
                  Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 1 et
                  seq.), or any successor provision, deferred compensation
                  plan whether qualified or not qualified under the Internal
                  Revenue Code of 1986, or any successor provision, or other
                  retirement plan that:

                  (i) is not   self -directed by the individual; and

(continued...)


                               [J-133-2016 and J-134-2016] [MO: Todd]          -   3
explains that an "ownership interest," for purposes of the term's inclusion in financial

interest, encompasses "[o]wning or holding, or being deemed to hold, debt or equity

securities or other ownership interest or profit interest." Id. The subsection additionally

excludes from the term "financial interest" three categories of passive holdings,

including pension plans and individual retirement accounts, Section 529 tuition plans,

and mutual funds which are not self -directed. Notably, the Board adopted this definition

nearly verbatim in its regulation relevant to the Board's operations and organization. 58

Pa. Code § 403a.1.

       Similarly, Section 1512 limits certain government -affiliated individuals from

having a financial interest in licensees or certain related entities. The section defines

"financial interest" in very similar terms to Section 1201's definition.3      As in Section

(... continued)
                  (ii) is advised by an independent investment adviser who has
                  sole authority to make investment decisions with respect to
                  contributions made by the individual to these plans.

                  (2) A tuition account plan organized and operated pursuant
                  to section 529 of the Internal Revenue Code of 1986 (Public
                  Law 99-514, 26 U.S.C. § 529) that is not self -directed by the
                  individual.

                  (3) A mutual fund where the interest owned by the mutual
                  fund in a licensed entity does not constitute a controlling
                  interest as defined in this part.

                  "Ownership interest." Owning or holding, or being deemed to
                  hold, debt or equity securities or other ownership interest or
                  profit interest.

3 4 Pa.C.S. § 1512(b), entitled "Financial and employment interests," defines "financial
interest" for purposes of the section as follows:

                  "Financial interest." Owning or holding, or being deemed to
                  hold, debt or equity securities or other ownership interest or
(continued...)


                           [J-133-2016 and J-134-2016] [MO: Todd] - 4
1201, financial interest for purposes of Section 1512 includes "[o]wning or holding, or

being deemed to hold, debt or equity securities or other ownership interest or profits



(... continued)
                  profits interest. A financial interest shall not include any debt
                  or equity security, or other ownership interest or profits
                  interest, which is held or deemed to be held in any of the
                  following:

                  (1) A blind trust over which the executive -level public
                  employee, public official, party officer or immediate family
                  member thereof may not exercise any managerial control or
                  receive income during the tenure of office and the period
                  under subsection (a). The provisions of this paragraph shall
                  apply only to blind trusts established prior to the effective
                  date of this paragraph.

                  (2) Securities that are held in a pension plan, profit-sharing
                  plan, individual retirement account, tax-sheltered annuity, a
                  plan established pursuant to section 457 of the Internal
                  Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 1 et
                  seq.) or any successor provision deferred compensation
                  plan whether qualified or not qualified under the Internal
                  Revenue Code of 1986 or any successor provision or other
                  retirement plan that:

                  (i) is not   self -directed by the individual; and

                  (ii) is advised by an independent investment adviser who has
                  sole authority to make investment decisions with respect to
                  contributions made by the individual to these plans.

                  (3) A tuition account plan organized and operated pursuant
                  to section 529 of the Internal Revenue Code of 1986 (Public
                  Law 99-514, 26 U.S.C. § 529) that is not self -directed by the
                  individual.

                  (4) A mutual fund where the interest owned by the mutual
                  fund in a licensed entity does not constitute a controlling
                  interest as defined in this part.



                               [J-133-2016 and J-134-2016] [MO: Todd]   -   5
interest," and excludes the same three categories of passive holdings. In addition to the

exclusions allowed for Board Members,              Section   1512 provides that the various

government -affiliated individuals may also hold interest       in   assets held in a blind trust.

The definition of financial interest in Section 1512 does not specifically include Section

1201's incorporation of "property, leasehold or other beneficial interest in an entity." 4

Pa.C.S. § 1512 "Financial Interest" (1). Therefore, Section 1201's definition of "financial

interest" is arguably broader than Section 1512.          Understandably, the Gaming Act is

more restrictive in regard to the financial holdings of Gaming Control Board members

under Section 1201 than the broader category of governmental -affiliated individuals

governed by Section 1512.

          While the General Assembly did not specifically apply either of these definitions

to Section 1330's prohibition against a licensee or related entity holding a financial

interest greater than 33.3% in another slot machine licensee or related entity,                  I




nonetheless find the definitions useful in considering the term's meaning in regard to

Section 1330, particularly because the definitions conform to the "common and

approved usage" of the term "financial interest" as required by our rules of statutory

construction.      1   Pa.C.S. § 1903(a). Under both definitions, "financial interest" includes

ownership interest, which is defined to encompass the holding of debt or equity

securities and a profit interest.         Likewise, the definitions exclude various passive

holdings that are not subject to the direction of the individual.

          To the extent that the definitions of financial interest in Sections 1201 and 1512

differ,   I   would adopt the more expansive definition for purposes of Section 1330 to

satisfy the stated legislative intent "to prevent possible monopolization by establishing

reasonable restrictions on the control of multiple licensed gaming facilities in this

Commonwealth."           4 Pa.C.S. § 1102(5).     Thus, while specified government -affiliated




                            [J-133-2016 and J-134-2016] [MO: Todd]      -   6
individuals may hold interest in licensees in a blind trust under Section 1512, blind trusts

should not be excluded from the term "financial interest" for a licensee or other entity

governed by Section 1330 as is the case with Gaming Control Board members under

Section 1201. Additionally, the term under Section 1330 should also include "property,

leasehold or other beneficial interest in an entity" as included in Section 1201, but not

specifically stated   in   Section 1512.

       I   respectfully reject the suggestion that "financial interest" does not include

ownership interest.        It is   beyond cavil that an owner of a casino has a financial interest

in the casino,   regardless of how a dictionary defines "financial." Moreover, the General

Assembly has repeatedly defined financial interest in the Gaming Act to include

ownership interest. In my view, the use of the disjunctive "or" in the phrase "ownership

or financial interest" should not be read to require careful delineation of interests as

either ownership or financial, which presents the possibility that an "interest" might not

fall neatly into either category.             Instead, the phrase "ownership or financial interest"

should be viewed as a complete phrase, which includes ownership as one form of the

broader category of financial interests in order to implement the legislative intent to

prevent monopolization.             Additionally,   I   agree with the Board that the ownership or

financial interest must be quantifiable in order for the Board to determine                  if   the 33.3

percent statutory threshold is reached.

       Viewing the term "ownership or financial interest" broadly,                  I   concur with the

Majority Opinion that the term includes loans, which, based upon their structure or

significance, may provide the lender with an interest in or claim upon the borrower

relevant to the General Assembly's intent to "prevent possible monopolization."                          4

Pa.C.S. § 1102. However,             I   question the Majority's reliance on the term "debt or equity

securities" as used in 4 Pa.C.S. § 1311, as well as Sections 1201 and 1512, to




                            [J-133-2016 and J-134-2016] [MO: Todd]          -   7
encompass loans within the phrase "financial interest" when the term "debt securities" is

commonly used to reference bonds rather than loans generally.                      Additionally,   I




emphasize Market East's observation that the inclusion of loans in Section 1330's

"ownership or financial interest" would not generally relate to large commercial lenders

so long as they are not a "slot machine licensee, its affiliate, intermediary, subsidiary or

holding company." 4 Pa.C.S. § 1330.

       While   I   differ in my view of "ownership or financial interest,"   I   nevertheless join

the Majority Opinion's remand for reconsideration of Mr. Manoukian's interest in

Stadium Casino L.L.C., including his interest in Sterling Investors Trust.




                          [J-133-2016 and J-134-2016] [MO: Todd]     -   8
