As part of Pennsylvania’s widespread gambling expansion legislation, the Keystone State is getting up to 10 new casinos. Well, satellite casinos, that is. These smaller casinos, also called mini-casinos, will feature 300 to 750 slot machines. Some might also include up to 30 table games.

The law passed in October of 2017. However, the satellite casino process did not begin until January 2018. The process for doling out satellite casino licenses featured a series of live auctions. Keep reading if you want to learn more about how the auction process works.

The auctions yielded five licenses. Plans for all of the mini-casinos are in various stages of development, but each one has a finalized location. In the meantime, in the spring there was talk of continuing the mini-casino auction process, but it appears the issue is tabled for now.

Current list of satellite casino projects in Pennsylvania

April 4 auction: After two-month hiatus, auctions return

Auction winner: Hollywood Casino at Penn National
Winning bid: $7,500,003
Total bidders: 1
Satellite location: West Cocalico Township, PA in Lancaster County

After a long break due to bad weather, the subsequent round of auctions got underway in April but generated only a single bidder. That bidder was the same entity behind the first satellite casino bid.

Penn National secured a second satellite property in West Cocalico Township, PA. The location is between Philadelphia and Harrisburg. It strengthens the boundary around Hollywood Casino, which claimed it was receiving unfair treatment as a result of the mini-casino process.

The company dropped its lawsuit in July. It is still searching for a satellite site, so it applied for and obtained an extension at the September PGCB meeting. It is the only license still waiting on a finalized location.

At the end of October, the last of the mini-casinos turned in plans for Hollywood Casino Morgantown. Morgantown is a township near West Cocalico. The project will cost $111 million to build and is the first satellite property to officially say it plans to offer a retail sportsbook.

Read more on the second Penn National mini-casino site.

Feb. 22 auction: Sands slip-up gives Parx the property

Auction winner: Parx Casino
Winning bid: $8,111,000
Total bidders: N/A
Satellite location: South Newton, PA in Cumberland County

There was some drama around the fourth license, as Sands initially put in a winning bid of $9,885,000. However, because Sands selected a location whose radius where the company could build overlapped with Mount Airy’s site, PGCB voided the bid. As the only other bidder, Parx Casino essentially won by default.

Parx selected a location west of the first satellite property in Yoe, PA. The South Newton location is also close to Harrisburg and the Maryland state line.

In August, Parx joined the list of mini-casino properties that requested an extension to turn in satellite casino plans. The PGCB granted the extension until Oct. 23.

After trying and failing to get Carlisle to reverse its opt-out designation, Parx eventually found a mini-casino home, just in the nick of time.

Parx turned in plans to PGCB on Oct. 22 for a location in Shippensburg. The central Pennsylvania township is only an hour from Maryland’s state line.

More on the drama and on Parx’s winning bid.

Feb. 8 auction: Mount Airy storms New Castle

Auction winner: Mount Airy Casino
Winning bid: $21,888,888.88
Total bidders: 3
Satellite location: New Castle, PA in Lawrence County

Mount Airy may be one of the smaller casinos in Pennsylvania, but it brought big bucks to the auction, bidding $21.89 million. It’s New Castle, PA location is just a few miles from the Ohio state line. With Youngstown, OH just 30 minutes away, the mini casino should draw a fair amount of traffic from the Buckeye State. It should also be tough competition for small and struggling Presque Isle Downs in Erie, PA.

In late July, Mount Airy petitioned the PGCB for extra time to lock in a satellite site. It is one of several groups that is struggling to find a host community.

The struggles were not too long for Mount Airy though. Just two weeks after filing for its extension, Mount Airy announced plans for a mini-casino in Big Beaver, PA. The property will be called Mount Airy Pittsburgh. In addition to the satellite casino, there will also be a full-service hotel, convention space, spa, and other amenities you would find at a major PA casino.

More on Mount Airy’s bid.

Jan. 21 auction: Stadium Casino sets sites on Pittsburgh

Auction winner: Stadium Casinos LLC (Philly Live! Casino)
Winning bid: $40,100,005
Total bidders: 4
Satellite location: Derry, PA in Westmoreland County

Even though Stadium Casinos LLC had not broken ground on its Philadelphia property yet, it wasted no time getting into the satellite casino game too. With a relatively large bid, the group secured the Derry location, which is just east of metropolitan Pittsburgh. With a property just 43 miles from Rivers Casino in the heart of the city, the Stadium group seems intent on having a presence in both of Pennsylvania’s major cities.

In July, Stadium announced it found a site for its mini-casino. It will take over the space currently occupied by Bon Ton in the Westmoreland Mall. Even though its brick and mortar casino is not built yet, it appears Stadium could be the first to market with a satellite property.

However, with new rumors swirling about the Stadium Casino project falling apart, suddenly the Westmoreland location’s status is in question, along with everything tied to the venue.

A December PGCB hearing could shed some light on the entire stadium situation. On Dec. 5, the PGCB will host a meeting in Greensburg, PA for the public to offer input on the new project.

More on the second project from Stadium Casinos LLC.

Jan. 10 auction: Penn National bids big for Yoe, PA-area satellite property

Auction winner: Mountainview Thoroughbred Racing Association, LLC (aka Hollywood Casino)
Winning bid: $50,100,000
Total bidders: 4
Satellite location: Yoe, PA in York County

Hollywood Casino’s owners made jaws drop with a hefty bid of $50 million, which was well above industry projections. Most were expecting the initial bid to be between $30 – $40 million, but Penn National went big to secure the Yoe location.

The selected site is roughly 50 miles south of Hollywood Casino and 20 miles north of the Maryland state line. It appears Penn tactically selected a location that would best help protect the centrally located Hollywood from competition.

While it shelled out big bucks for the satellite, it waged a legal battle to get the satellite law overturned. Penn maintains its central location with no nearby casinos leaves it unfairly vulnerable to these satellite properties. Nonetheless, it dropped the suit in July.

The company also obtained an extension from PGCB to turn in plans. With that extra time, Penn National found a location in York. That location used to be a Sears store in York Galleria, but will soon be one of two Penn National satellite properties. The company filed the official paperwork for the property at the Sept. 12 PGCB meeting.

Read more about Hollywood Casino’s winning bid and plans for the new property.

Overview of the satellite casino law

Here is more about how the process works, including:

  • Provisions of the satellite casino licenses
  • Calendar of dates
  • Map of opted-out municipalities

The law allows for ten new casinos that fall into a new category of gambling establishment, Category 4. These Category 4 properties can offer between 300-750 slot machines. In order to do that, the property needs to purchase a $7.5 million license. Should the license holder want to offer up to 30 table games, it would need to pay for an additional $2.5 million license.

These satellite properties cannot be within 25 miles of an existing Category 1, 2, or 3 property.

There is also a stipulation in the law affecting Mount Airy Casino, which effectively creates a bigger buffer zone for the relatively small and isolated casino. Penn National, which owns Hollywood Casino and is in the process of acquiring The Meadows’ parent company Pinnacle, is currently suing the state over the unfair treatment.

Here is a breakdown of the existing casino properties by category:

Category 1: Racinos

Category 2: Standalone casinos

Category 3: Resort casinos

Most of these properties are also the people who got first crack at satellite properties. The initial auctions was only open to Category 1 and 2 properties.

There was one additional group included in the auctions though. That is Stadium Casino LLC’s Philly Live! casino project at Stadium Park in Philadelphia. The property is just getting under construction, but once it is complete, it will be the state’s fifth standalone Category 2 casino.

Opt-out municipalities

When it comes to where to put these satellite casinos, groups are limited by more than just a buffer zone around existing casinos. From the time Gov. Tom Wolf signed the bill into law in early November until the end of 2017, municipalities across the state had the option to opt out of hosting a property.

In order to opt out, municipalities had to hold a public meeting, take a vote, and send written documentation of that vote to the Pennsylvania Gaming Control Board (PGCB). Over 1,000 municipalities in Pennsylvania opted out, while only a handful publicly lobbied to get a new casino.

PGCB released a map of the buffer zones and opted-out cities once the process was over. Yellow circles reflect the buffer zones. Blue indicates a municipality which opted out:

The satellite auction process

Submitting a satellite casino bid

The October law stipulates that the ten satellite casino licenses are to be auctioned off over a series of live auctions throughout the first half of 2018. The first set of auctions is only open to Category 1 and 2 license holders.

The process is down via two paper ballots. The first ballot contains a monetary bid. That number includes the $7.5 million license but does not include the $2.5 million additional license for table games.

The second paper ballot contains the proposed location for the satellite casino. This is presented as a set of geographic coordinates. While that may sound rather specific, the license holder actually has some leeway.

The final mini casino must be within 15 miles of the exact location. That means that the geographic point can actually be in an opted-out municipality, so long as the final building resides outside the municipality, but within the 15-mile radius.

Auction winners and supplemental auction procedure

Once all the ballots are submitted, PGCB officials will announce how many bids were submitted. Once the monetary bids are reviewed, they will announce the winner in addition to the amount of the winning bid. After that, officials will announce the selected geographic point.

Once the auction is over, the winning bidder has two business days to wire the bid amount to PGCB. It then has six months to put together a complete Category 4 casino application.

The winner was also no longer allowed to bid on properties during the auction round. However, once the initial auction concludes and the subsequent auction allowed Category 3 casinos to bid begins, the properties could bid again on a second site. Penn National opted to do so, but then there was no further interest in satellite casino licenses.

After no bidders at the March 7 auction, the subsequent auction was supposed to begin on March 21. However, bad weather led the PGCB to postpone the auction date to the next meeting on April 4. There was one bidder during the April 4 auction, but after no bidders on the April 18 auction, the remaining five licenses are now up in the air.

There is supposedly additional auction protocol if the initial and subsequent auctions do not yield bidders for all 10 licenses. Prior to the additional auction, entities that are not current casino license holders in Pennsylvania can submit an application to bid. After vetting by PGCB, any approved applicants can bid on remaining licenses along with Category 1, 2 and 3 license holders.

After the April 18 auction drew no interest though, PGCB spoke about the possibility of this third and final round of auctions as a possibility, not a certainty.