By Dr. Justin L. Davis, Ph.D., M.B.A.
A legal case involving a local civic association in Philadelphia, PA, and a company seeking to move its sportsbook operation to a new location has resulted in a long battle related to the court’s interpretation of certain zoning laws and sportsbook definitions.
The issue started when City Turf Club Op Co. sought to relocate its existing sportsbook operation approximately 8 blocks to a new location inside Chickie’s and Pete’s restaurant and sports bar. The Packer Park Civic Association raised numerous legal and social concerns and sought to stop the relocation from happening.
Court reports detail a zoning dispute concerning the relocation of City Turb Club Op Co.’s existing race and sportsbook operation. The case began in July 2020 when the applicant, Chickie’s and Pete’s, submitted a relocation application. Ultimately, the issue was whether the applicant could obtain a special exception to move their sportsbook to the new location. Such a special application requires the zoning board’s approval because the facility’s proposed use falls under conditional permission.
Chickie’s and Pete’s argued that their relocation would not result in any detrimental impact beyond what is typical of a sports bar and restaurant facility. In fact, the relocation would result in reduced seating capacity. In addition, wagering was limited solely to race and sportsbook bets, excluding any slot machines or table games. To support their position, Chickie’s and Pete’s presented numerous expert witnesses attesting to topics such as the civic impact (e.g., traffic, etc.), the safety measures to be taken (e.g., preventing minors from entering), the expected neutral impact on crime, and the ultimate downsizing of their facility compared to their previous location, which would reduce the footprint of such a business in this neighborhood.
In counter arguments, the Packer Park Civic Association took a more social and practical approach. They contended that this relocation would have detrimental effects on the local neighborhood. They also brought in key national witnesses to discuss the negative impacts of gambling behavior, the potential for creating gambling addiction, and changing the character of the local area. The trial court viewed these positions as speculative, at best, with minimal specific evidence backing up their position and failing to meet the burden of proof of this expected impact.
The case concluded in January 2024. The zoning board voted to deny the special exception application, citing insufficient credible evidence provided by the applicant (Chickie’s and Pete’s) for such an exception. However, the trial court overturned this decision. The court criticized the zoning board for disregarding the evidence provided by Chickie’s and Pete’s without any reasonable explanation. Chickie’s and Pete’s had presented numerous expert witnesses accounting for all prior stated concerns from the civic association. The trial court also noted that the civic association failed to meet its burden of proof responsibility to demonstrate the impacts of the relocation. Their arguments were cited to be based on speculation rather than concrete evidence.
This decision’s impact on race and sportsbooks sets a precedent for how future zoning disputes involving similar establishments could be handled. While zoning laws differ widely based on location, this court’s decision noted that gambling has become somewhat of an accepted societal norm. Thus, basing a zoning decision solely on the argument that a sportsbook is a “harm” to society is not sufficient. The decision underscores the importance of adhering to specific zoning regulations and criteria outlined in a Zoning Code and providing hard evidence, when possible, to support a company’s arguments. It also suggests that such establishments seem to have a path forward to seeking relocation within certain designated zoning restrictions for sportsbooks. Applicants would need to demonstrate compliance with all zoning requirements and show how the relocation would have a minimal adverse impact on the surrounding community. The decision also benefits other sportsbooks in that it reinforces the notion that decisions regarding special exceptions must be based on objective evidence rather than speculation or generalized ethical/moral concerns. Most importantly, the decision reaffirms the importance of a thorough and fair evaluation process in land use decisions, protecting the interest of both a business seeking rezoning and the community.
Dr. Davis is Professor of Strategic Management and Entrepreneurship in the College of Business at the University of West Florida.
