The state's Gaming Control Board in Harrisburg approved a licence for PITG Gaming Majestic Star of Detroit over Isle of Capri and a third bidder, Forest City Enterprises. The NHL team is expected to release a statement later in the day.
The licence was critical to the club's survival in Pittsburgh as Isle of Capri had promised to spend US$290 million to build the Penguins an arena. The Penguins need a new rink to replace the 45-year-old Mellon Arena, the oldest facility in the NHL.
The decision comes less than a week after a deal to sell the team to Canadian billionaire Jim Balsillie fell through.
PITG Gaming Majestic Star said previously it would contribute some money for a new arena over 30 years under a so-called "Plan B" being proposed by city and county officials that would include public funds. But that plan also calls for the Penguins to help pay for the rink and neither team owner Mario Lemieux or NHL commissioner Gary Bettman are believed to be fond of that plan.
Pittsburgh mayor Luke Ravenstahl and Allegheny County Chief Executive Dan Onorato have said they are willing to sit down with the Penguins as soon as Thursday to hash out an agreement that would build an arena and keep the team in Pittsburgh, according to Pittsburgh Tribune Review.
It's been a bad week for the Penguins, whose sale to Balsillie fell through last Friday after he pulled the plug, uncomfortable with the NHL's list of conditions in the final sale agreement.
Balsillie, the co-chief executive officer of BlackBerry maker Research In Motion Ltd (TSX:RIM), says he's still interested in trying to purchase the team but Lemieux says he's done with the Canadian.
In the meantime, Toronto brewery owner Frank D'Angelo officially declared his interest in the Penguins on Monday. And he said he's willing to build and pay for his own arena in Pittsburgh and commit to keeping the team there.
D'Angelo, whose bid for a CFL franchise in Ottawa was recently turned down, says he and billionaire partner Barry Sherman are teaming up to make an offer.
Dallas Mavericks owner Mark Cuban, a Pittsburgh native, is also believed to have contacted the league although it's not clear how serious he is about the Penguins.