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After Sands Slips Up, Parx Picks South Newton Mini-Casino Site

hand drawing tickets out of bowl

After a dramatic Wednesday, Parx Casino officially picked the site of the fourth Pennsylvania mini-casino on Thursday morning. Parx ownership, Greenwood Gaming Entertainment, selected a location in South Newton Township, PA in Cumberland County. The company’s bid amount was $8,111,000.

Satellite site just outside of Harrisburg

It appeared Sands won the fourth license on Wednesday. However, the bid was subsequently invalidated because the site selected would have overlapped with Mount Airy’s area where it could build its mini-casino.

As the only remaining bidder from Wednesday’s auction, Parx won the right to bid by default. The proceedings Thursday were just a formality where the Pennsylvania Gaming Control Board (PGCB) announced the bid amount and location the group submitted the day prior.

Parx ownership selected a location in southwestern Pennsylvania. The town is roughly 50 linear miles west of Yoe, PA, the site selected by Penn National at the first mini-casino auction.

Both Yoe and South Newtown are near the state capital, Harrisburg. Both are also very close to the Maryland state line. South Newton is just over 30 miles away from Maryland, and a two-hour drive from Baltimore.

The location is very much in Penn National territory. Not only is Hollywood Casino at Penn National the closest casino and Yoe the closest mini-casino site, the location is proximate to several of Hollywood’s Maryland properties. Both Hollywood Casino Perryville and Hollywood Casino at Charles Town are a short drive away.

Parx is currently also basically the only property in the large expanse between Harrisburg and the Pittsburgh area.

Price just above the minimum cost of a license

The base cost of a satellite casino license is $7.5 million. Parx paid not too much over that with its bid of $8.1 million. For reference, Sands won with a bid of $9.89 million on Wednesday.

With that bid added to the tally, the total amount of money for the state from these auctions now stands at just over $120 million with only four of ten possible licenses taken. Original estimates expected the proceedings would net around $100 million for all ten licenses. That is the cost of the base license and the $2.5 million table games license at all properties.

As a matter of fact, the $120 million reflects purely the revenue from the base license without table games. However, now that the bids are down closer to the minimum cost for a satellite property, the revenue is going to grow at a much slower rate.

There is also the matter of bidders to consider. While Sands is obviously interested in a satellite property, there are currently no other bidders. Certainly, it is possible other casinos throw their hat in the ring now that the big spenders are out though.

What happens if these auctions run out of bidders?

Currently, the only parties allowed to bid at these auctions are Category 1 and 2 casino license holders. Once a property wins a bid, they are out of the running. These are the remaining casinos eligible to bid:

Hypothetically, let’s say Sands wins the next auction, then there are no bidders the auction after that. What would happen next is another set of auctions.

Category 3 casinos Valley Forge and Lady Luck would be eligible to bid at the supplemental auction. So would any Category 1 or 2 property that already won a license during the first auction.

If the second set of auctions runs out of bidders, things start to get interesting. At that point, PGCB would open up the auction to any qualified bidder. Interested parties would fill out an application and the state would vet them. If PGCB deems the party fit to participate, they can bid in the third and final set of auctions.

About

Jessica Welman is the managing editor of PlayPennsylvania. A longtime poker media presence, Jess has worked as a tournament reporter for the World Poker Tour, co-hosted a podcast for Poker Road, and served as the managing editor for WSOP.com.