Never Say Never: Mini-Casino License Back up for Auction in Quest for PA Revenue

Posted on July 8, 2020

When an auction for a mini-casino license last September failed to attract a bidder at $7.5 million, that was supposed to be lights out on the auctions – forever.

At least that’s what the sunset provision in the last auction extension legislation required. But things have changed.

And then Big Beaver’s mini-casino got denied

Back in November a mini-license for Mount Airy Pittsburgh – the actual location was Big Beaver – was denied by regulators, citing a lack of financing.

But a local news site, the hyper-local news site BeaverCountian.com reported a slow-going investigation of the continuing background presence of former Mount Airy owner Louis DeNaples was also in play.

He’d previously been barred from Mount Airy due to perjury charges about allegations he had ties to the now-defunct Bufalino mob family. He had unsuccessfully petitioned the Pennsylvania Gaming Control Board (PGCB) for permission to do business with Mount Airy last year.

Despite his ban, DeNaples attended several mini-casino meetings in Beaver and Butler counties, the Beaver County news site has reported.

Another sunrise on the mini-casino sunset provision

The sunset provision preventing more auctions was also of course pre-COVID19.

Now, with the state’s financial chips down, PA is heading back to the future.

The state’s budget is hurting, and so it is back to the gambling revenue well – if it hasn’t run dry.

Legislators are again looking for a quick fix from an auction windfall and then a new revenue stream if a Category 4 mini-casino ever opens.

But then not a single mini-casino has yet to open its doors since the original legislation passed in 2017.

Auction for mini-casino license, Part Three

Like a bad blackjack player, lawmakers tucked a “hit me one more time” provision into a piece of budget legislation in May at the peak of the virus shutdown.

The Pennsylvania Gaming Control Board (PGCB) announced the revived attempt at an auction at the outset of June’s regular meeting but without discussion or explanation.

Round Three bidding set for Sept. 2

Round Three – bidding has halted twice previously due to lack of interest – is now set for Sept. 2 at 10 a.m.

Only owners of the state’s licensed slot establishments or their licensed principles are eligible to bid for a mini license. Many established casinos had previously passed on the first two rounds. Adding licensed principles is new.

The revived legislation again allows up to 750 slot machines and up to 40 table games.

Additional details are coming to the PGCB website.

Huge chunks of PA ineligible for a mini-casino site

Huge swaths of PA are off-limits around existing and proposed casino sites. There is a 40-mile buffer requirement.

That leaves only less populous parts of the state, such as rural northern Pennsylvania, a western stretch along the Ohio border between Pittsburgh and Erie, and a handful of smaller cities, such as Altoona and Williamsport as viable locations.

Bidders must submit a location as part of the bidding.

Original legislation allowed as many as 10 mini-casinos

While as many as 10 mini-casinos were envisioned under the 2017 legislation, just five mini-casino licenses were sold at auction.

But the five successful auctions generated a substantial $127 million in bids.

Status of the five mini-license sites

Mount Airy #1, LLC which operates the Mount Airy Casino Resort,  had wanted to build a satellite casino in Big Beaver Borough, Beaver County. They paid $21.2 millionfor the license application. They only got 75% back following their license denial.

Greenwood Gaming and Entertainment Inc., operator of Parx Casino, wanted to construct a satellite casino in Shippensburg Township, Cumberland County. However, geological testing seems to have ruled out that location. They paid $8.111 million for their license. They have yet to announce a replacement location, according to PGCB spokesman Doug Harbach.

Stadium Casino, LLC, which is building a Category 2 casino known as Live! Philadelphia is actively constructing a satellite casino in a vacant mall space in Hempfield Township, Westmoreland County. They paid $40.1 million for the license.

Mountainview Thoroughbred Racing AssociationLLC, which operates Hollywood Casino at Penn National Race Course, has begun work on two satellite sites, but work halted due to the virus and has not resumed.

They paid $50.1 million for a license at a vacant mall space in Springettsbury Township, York County. They also spent $7.5 million for a site in Caernarvon Township, Berks County. The area is generally referred to as Morgantown, which is actually a zipcode that sprawls through three counties.

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Kevin Shelly Avatar
Written by
Kevin Shelly

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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