PHILADELPHIA (AP) The owners of a planned casino on Philadelphia’s waterfront argued to the state’s highest court April 15 that the city cannot legally revoke a license to build on the riverbank.

The dispute in front of the state Supreme Court could determine whether the owners of the $600 million SugarHouse Casino can build on Philadelphia’s waterfront.

The city’s new mayor, Michael Nutter, revoked the casino’s permit, which had been issued two months earlier in the waning days of his predecessor’s term.

But city lawyers — backed by state lawmakers — said the city under former Mayor John Street erred in granting a permit for riparian rights, which involve the right to build on submerged land.

Since at least 1978, when a state dam safety law took effect, the state has enjoyed the sole power to grant riparian rights on Pennsylvania waterways, state Senate lawyer Christopher Craig argued.

Craig represents Sen. Vincent Fumo and six other lawmakers who have sued city officials over the permit. Fumo is “opposed to the casino at that site — period — because of the community opposition to it,’’ Craig said after the session.

SugarHouse, which won a state casino license for a site north of the Benjamin Franklin Bridge in late 2006, argued that it’s too late to revoke the city permit.

The company has spent large sums of money to move the project forward, lawyer Stephen A. Cozen told the justices. He argued that the city properly issued the building license under a 1907 law that lets the city develop its own waterfront.

The SugarHouse group is led by Chicago billionaire developer Neil G. Bluhm. Investors include high-powered Philadelphia lawyer Richard Sprague, who listened to the arguments.

Cozen also argued that the project would increase public access to the river and boost the economy, and was therefore in the public interest. The abandoned site was home to a sugar refinery that closed in the 1980s.

Craig told the panel that SugarHouse knew it did not control the riverbank when it applied for a slots gambling license on the land.

The Supreme Court did not indicate when it would rule.

A second casino, Foxwoods Casino Philadelphia, is also planned for the Delaware River waterfront. It also has been hung up in various appeals and lawsuits, but its ownership group has said a favorable court ruling earlier this month cleared the way for construction.

Should one of two casinos open, Philadelphia could become the nation’s largest city with casino gambling. But preventing construction over the river could force SugarHouse to seek approval for a new design or abandon the site altogether.

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