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First Satellite Casino License Approval Doesn’t Come Without Controversy

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PA mini casino opposition

After fits and starts, Pennsylvania has finally approved the first of five Pennsylvania mini-casino proposals.

Penn National Gaming’s application for Hollywood Casino Morgantown was approved June 12 following a hearing before the Pennsylvania Gaming Control Board (PGCB).

“We have our ducks in a row,” said Penn spokesman Jeff Morris last week just hours before the hearing popped up on the then-upcoming meeting agenda.

Four more PA mini-casinos in the pipeline

Another Penn National mini-casino application for a mall site in nearby York County still has no hearing date. Local officials believe a July hearing is possible.

Three additional mini-casino applications are also still pending, all without hearing dates.

One is also for another vacant mall space near Pittsburgh shepherded by Stadium Casinos LLC, the group behind the under-construction casino project in South Philadelphia.

The other pending mini-casino applications are a Parx Casino project in Shippensburg in Cumberland County and a Mount Airy Casino for Westmoreland County near Pittsburgh.

Part of the sweeping 2017 gaming expansion law

The expansion law passed in October of 2017, allowing for up to 10 new Class 4 casinos with 300 to 750 slot machines and up to 30 table games.

License auctioning did not begin until January of 2018. Pennsylvania sold five licenses. There currently are no announced plans for further auctions.

Penn, which operates Hollywood Casino at Penn National Race Course, bought the rights to two mini-casino licenses with $50.1 million paid for just for the first license.

Penn’s mini-casinos will buffer their primary casino

Penn initially fought Pennsylvania’s expansion plans, even filing a lawsuit. Eventually, Penn dropped the legal challenge.

 Morris, a Penn spokesman, said last week adding mini-casinos buffering its casino should “attract new customers and protect market share” without cannibalizing its existing customer base.

A buildout of the Morgantown site should take about 18 months, he added.

Morgantown is a zip code, not a town

 Elected leaders in the host location of Caernarvon Township in Berks County unanimously signed off on the proposal in March. Keep in mind, the township is just a small component of the zip code which makes up the region considered Morgantown.

Their three-hour public hearing left many dissatisfied.

Opponents presented about 1,000 signatures against the expansion. But many who opposed the idea do not live within the borders of the Berks county host town of Caernarvon.

That’s in large part a function of  “Morgantown” not being an actual municipality, but instead a region.

Morgantown is actually a zip code area: 19543. The zip draws from sections of seven separate small municipalities in Berks, Chester, and Lancaster counties.

There is even another Caernarvon township in the region that is also a part of Morgantown. However, it resides in neighboring Lancaster County.

The Lancaster County Caernarvon had opted out of hosting a mini-casino. But it had no direct say on the proposal approved by Caernarvon in Berks County.

Adding to the blurred lines, the primary centralized school district for the Morgantown region is in two counties and made up of seven municipalities, four of which had opted out.

Public hearings and process faulted for mini-casinos

Morris called the opponents at the public hearing “a loud minority.”

Michele King, who has a Morgantown zip code but lives in Chester County, feels dismissed by Penn National and PGCB’s process for assessing local reactions.

“[They] haven’t truly looked at the numbers and the numbers are out there,” she said. “Public opinion has no voice.”

We are a rural community which just happens to be off the Turnpike. I’m not sure there is any legal recourse but is something we are not afraid to do.

Fellow opponent Lisa Joye feels local leaders didn’t want to hear public opinion.

 “I’ve made my peace with this,” said Joye. She opposes all gambling and added she’s praying.

Only one of the Caernarvon supervisors, Allen Styer III, responded to an email from PlayPennsylvania. In his response, he declined to comment. Styer attended the gaming board meeting to reinforce his township’s support.

Turning York Galleria into a casino location

Things were different in York County.

While hardly unanimous, the pushback against Penn’s proposal to repurpose part of a mall space vacated by Sears in Springettbury Township, near the city of York, was more muted. However, one township supervisor opposed the idea and quit not long after its approval.

Still, Jennifer Bollman, a recent resident of York who moved away from near a Maryland casino, still “thinks this is a mistake.”

Residents in her former home county were told it would go to fund schools and a community center. It never happened.

“I think they should have put more effort into informing and educating everyone in the county. I don’t feel people know what they are getting into really. I know a lot will support it, But I think opinion will change once it’s in for a few months.”

Springettbury Township manager Benjamin Marchant thinks criticism of the process and outreach by the gaming board is justified.

In fact, that’s why Springettbury initially opted out of hosting. The leadership wanted to give officials adequate time to conduct research.

Economic reality in an age of fading brick-and-mortar retail

John Stein owns a small business and is a former cop. His “knee-jerk reaction” to a casino moving into the mall was, “Oh my God, the crime and all the things it will bring.”

But the upside meant revitalizing the struggling mall. Plus, the move should result in infrastructure benefits at no cost to locals, attracting restaurants and small retailers. It should also boost tax revenues.

Stein, who gambles occasionally, changed his mind. He pointed out he owns a house at the New Jersey shore and visits Atlantic City casinos.

The proposed site, the Galleria Mall, was “once vibrant,” recalled Stein. But three anchor stores have closed and half the small retail spaces are also vacant, he added.

“There’s no retailer resurgence” in the future, said Stein.

The mall’s owners, CBL Properties issued the following statement:

“We are excited to see the project progress and will continue to work with our partners at PNG to meet all necessary requirements for the final licensing approval.”

Bob Cox, a recent addition to the Springettbury Township’s board of supervisors who joined the town government after its vote to support the mini-casino, has a pragmatic view.

“My gut tells me somebody in there as a tenant is better than nobody.”

A former commercial real estate broker, Cox said reusing existing structure and infrastructure makes economic sense.

Supervisor Cox and township manager Marchant both said they expect a gaming board hearing in July.

Penn estimates the conversion of the mall site should only take 12 months. That’s far quicker than building from scratch.

About

Kevin C. Shelly is an award-winning career journalist who has spent most of his career in South Jersey. He's the former assistant city editor of The Press of Atlantic City, where he covered the casino industry and Atlantic City government as a reporter. He was also an investigative, narrative enterprise, and features reporter for Gannett’s Courier-Post.

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