Council on Thursday approved hearings on the idea. Only Councilman David Oh voted no.
The hearings, proposed by Councilmen Kenyatta Johnson and Jim Kenney, would "examine the feasibility and legality" of what the resolution calls "an extraordinary opportunity."
The nonprofit, established on Nov. 15 as the Philadelphia Casino Benefit Corp., would direct its share of the casino profits to the city's underfunded pension fund and school district.
Council members on Thursday received a letter from an attorney for Penn National Gaming, the company that wants to build and operate the casino on Packer Avenue in South Philly.
The letter said: "This unique offer is a fair, reasonable, and significantly, an entirely legal effort intended to advantage the taxpayers, students, and/or pensioners of the city."
Penn National already owns a controlling stake in a casino near Harrisburg and, according to state law, can only own up to one-third of another casino license.
That created the need for a partner in their bid for a Philadelphia license.
Penn National applied on Nov. 15 for the city's available casino license, listing the Philadelphia Casino Benefit Corp. as controlling two-thirds of the project.
Joseph Domenico, a veteran Atlantic City gaming executive, is the only officer of the nonprofit, according to Penn National spokesman Eric Schippers.
Mayor Nutter's administration, in letters Nov. 16 to the state Gaming Control Board and Penn National, rejected Brady's idea, which was originally pitched with the city owning a two-thirds stake in the casino. Nutter's administration said that would violate the state's First Class City Home Rule Act.
Brady reorganized his pitch to use a nonprofit in an attempt to address that concern.
A Nutter spokesman said the city would be happy to take donations from any gaming company to help pay for schools and fund the pension plan.