Key Points

  • The New Hampshire Supreme Court affirmed the Lottery and Gaming Commission's denial of license applications filed by a prospective buyer of Concord Casino under a commission forced-sale order.
  • The court held that both the casino company and its owner, Anthony M. Sanborn, had standing under RSA chapter 541, because the denial blocked Sanborn's contingent sale and caused him a direct financial injury not shared by the public.
  • Regulators could reasonably find the buyer unsuitable based on Sanborn's continuing lease, earnings-based payment and future-sale ties to the casino and on the buyer's failure to show the financial capacity to meet his obligations.
  • The casino's request for an extension of the sale deadline was moot because its licenses were not revoked until more than 15 days after the suitability review ended.
  • Due process and bad-faith arguments were not preserved because the petitioners did not raise them in their motions for rehearing as RSA 541:4 requires.

The New Hampshire Supreme Court on Wednesday upheld state gaming regulators' refusal to license a prospective buyer of Concord Casino, rejecting the casino owner's challenge to a decision that sank a sale the regulators themselves had required.

In an unsigned opinion, the court held that the New Hampshire Lottery and Gaming Commission acted lawfully and reasonably when it denied the buyer's license applications after the commission and the state attorney general's office found him unsuitable for charitable gaming. Justices Donovan, Countway and Will joined the decision. Chief Justice MacDonald heard the February argument but did not take part in the final vote.

The ruling also holds that the casino's owner, Anthony M. Sanborn, had standing, the legal right to bring the appeal, even though the license applications were the buyer's and not his. But the court declined to consider arguments that regulators had acted in bad faith to block the sale, because the casino and Sanborn had not raised them in their requests for rehearing before the commission, as state law requires.

The case traces to 2018, when Win Win Win, LLC, which does business as Concord Casino, received licenses to operate a charitable gaming facility. Audits in 2021 and 2022 found inaccurate or insufficient financial documentation and raised concerns about an Economic Injury Disaster Loan the company obtained from the U.S. Small Business Administration.

In 2023, after a review of their fitness to remain in the industry, the commission and the attorney general found neither Sanborn nor the company suitable to be associated with charitable gaming. According to the opinion, there was credible evidence that they unlawfully obtained the loan and that Sanborn spent its proceeds on purchases the loan did not permit.

After a hearing, the commission suspended the casino's licenses and gave Sanborn six months to sell the business to a commission-approved buyer. If no sale closed, the suspension would become a revocation. Sanborn signed a purchase agreement with a buyer, whom the opinion does not name, and the deal was contingent on the buyer and the company receiving new licenses.

As the deadline approached with the buyer's review unfinished, the casino asked for more time. The commission refused but stayed the revocation. In an October 30, 2024, letter, the commission told the buyer that the attorney general's office had concluded that "[the buyer] and WWW are unsuitable to be associated with charitable gaming in New Hampshire." The office cited "Mr. Sanborn's continued involvement with and connection to WWW" and the buyer's failure "to demonstrate the financial capacity" to meet his obligations under the deal. The commission revoked the casino's licenses on November 26, 2024.

On appeal, the commission argued that the casino and Sanborn lacked standing to challenge the denial of someone else's applications. The court disagreed. It held that the company was directly affected because it was itself denied licenses. As for Sanborn, "the Commission's order had the effect of preventing the sale of WWW from proceeding, which caused a direct financial injury to Sanborn," the court wrote. That injury "is not shared with the public in general, nor is it a mere interest in a problem," the court added, distinguishing a 2014 case in which an appellant that was not the license applicant had asserted only a "generalized interest in helping the public."

Reviewing the merits deferentially, as the state's administrative-appeals statute requires, the court found support for both grounds. It pointed to three ways Sanborn would have stayed tied to the casino under the deal. A company Sanborn managed would lease space to the casino, Sanborn would receive payments based on its earnings for years after the sale, and he would share in the proceeds of a future sale unless certain conditions were met. Given the earlier findings about the loan, "it was not unlawful or unreasonable for the Commission to consider Sanborn's continued association with WWW after the sale under the terms of the proposed transaction as negatively impacting the buyer's and WWW's suitability," the court wrote.

The court also upheld the finding on the buyer's finances. The payment due at closing alone was "over ten times the amount of cash the buyer had on hand," the court wrote, and some later payments owed to Sanborn "approached or exceeded the buyer's net worth." The petitioners did not argue that the buyer had lined up financing.

The court agreed with the commission that the casino's request for more time was moot, meaning no live dispute remained, because the licenses were not revoked until more than 15 days after the review ended. The petitioners "in effect received the extension of time that they requested," the court wrote.

The casino and Sanborn had asked the court to give them another 12 months to sell, arguing that the commission's stated reasons were "pretextual" and that the process had violated due process. The statute requires a rehearing motion to "set forth fully every ground upon which it is claimed that the decision or order complained of is unlawful or unreasonable." The only reference to due process in their rehearing motion on the license denial, the court found, was one sentence calling the commission's reliance on Sanborn's past conduct "illogical and contrary to due process principles." That phrase, offered "without reference to a specific constitution, a developed argument, or legal authority, was insufficient to raise a due process argument before the Commission," the court held.

The court found no good cause to excuse the omission. It noted that the petitioners had accused regulators, in their earlier request for more time, of having "attempted to scare off buyers (in multiple instances, succeeding)," and so could have pressed the claim at rehearing.

Lawyers for the casino and Sanborn included Mark T. Knights of Nixon Peabody LLP; Simpson Thacher & Bartlett LLP also represented them. The commission was represented by the office of Attorney General John M. Formella.

The decision affirms all of the commission's orders on appeal. Under the court's Rule 22, the opinion remains subject to motions for rehearing and to formal revision before it is published in the New Hampshire Reports.