Moments after the Pennsylvania Gaming Control Board in 2006 announced Bethlehem was getting a casino, Bethworks Now developers and Las Vegas Sands Corp. officials celebrated the prospect they all were going to make a lot of money.
Today, like spouses whose marriage has soured, the partners are fighting over that fortune.
Bethworks tried Wednesday to prevent officials of Sands Casino Resort Bethlehem from getting regulatory approval for table games. Bethworks argued that Sands illegally filed for a table-games license without Bethworks' approval, and that Sands has improperly stuck Bethworks with a $21 million bill for the casino's original gaming license.
Officials from both sides declined to comment Thursday, citing a confidentiality agreement. But Bethworks argued its case Wednesday before the gaming board in Harrisburg and filed a 44-page ''petition to intervene'' with the board. Bethworks includes New York developers and Phillipsburg attorney Michael Perrucci.
''Given this misconduct by Sands, Bethworks respectfully asks that the [Sands table-games] hearing be adjourned to permit Bethworks reasonable opportunity to pursue its legal remedies in an appropriate forum,'' the petition states. ''Â… Sands has unilaterally and improperly allocated to Bethworks, which holds a 10 percent interest in [the Bethlehem casino], a disproportional amount -- $21 million, or more than 42 percent -- of the $50 million license fee.''
The gaming board denied the petition and approved Sands' request to add 89 table games such as blackjack, craps and roulette. But by then, the latest in a series of disappointments with the Sands casino had been unveiled.
Bethworks' claims come after Sands halted construction on the hotel and mall portion of the project because of the recession, and after months of casino revenue that has fallen short of projections. On Wednesday, Sands announced that work on the hotel will resume next month.
Bethlehem Mayor John Callahan was surprised by the fight but said it's one he has no reason to jump into.
''I'm excited that table games were approved because that means more revenue for the city and hundreds of jobs for Valley residents,'' Callahan said. ''I know nothing about their legal battle and I don't need to know. That's between them.''
The petition lays out a complex relationship between Sands and Bethworks, formalized in a 2008 contract. Bethworks owned the 126-acre property Sands needed to build the casino, hotel and parking garage. The deal gave Sands the land it needed, and in return Bethworks got a 10 percent stake in the casino.
Under the deal, Sands paid all the money up front, and Bethworks' portion of licensing and development costs was to come out of its share of future profits. The deal gave Sands, as majority partner, limited power of attorney to make decisions on Bethworks' behalf.
An issue Bethworks raised Wednesday was Sands' bill for $21 million of the $50 million casino licensing fee. ''How does 10 percent of $50 million turn into $21 million?''
Bethworks attorneys asked gaming board officials.
Bethworks officials also say the deal does not allow Sands to use its power of attorney for ''major'' decisions, such as applying for table games. Bethworks says Sands did that in connection with a waiver tied to the licensing fee.
Sands' attorneys, in a Jan. 25 letter, asked Bethworks to sign the waiver. Bethworks officials say when they balked because of the disputed $21 million charge, Sands invoked its power of attorney.
Sands spokesman Ron Reese said the company had no comment.
''We're pleased to have table games approval, and that's what we're focused on right now,'' Reese said. ''You'll have to ask Bethworks what their concerns are. We have no comment.''
''I have nothing to say,'' Bethworks principal Michael Perrucci said. ''I'm bound by our confidentiality agreement with Sands.''
Gaming board officials approved the table-games application and sent both sides away to settle the matter themselves. Neither Reese nor Perrucci would say whether they'll need a civil court judge's help to do that.
matthew.assad@mcall.com
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