Last updated: July 17, 2018
The new Pennsylvania gambling expansion law passed largely because the state desperately needed a new source of tax revenue. One of the biggest sources of that revenue will be the upfront licensing fees for all the new types of gambling.
Even with the potential for big returns, the latest state budget only expected $100 million from online gambling. That is a figure Pennsylvania surpassed after just the first mini-casino auction.
The state is still waiting for license applications to come in. However, thanks to other elements of the new law, it is already raking in money. How much so far?
And that number doesn’t even count the money coming from PA Lottery expansion. Currently, there are no regular reports on precisely how much the new iLottery and Keno bring in each month. However, reports on the first few weeks of operation said Keno generated $2 million in revenue, while the online Lottery brought in approximately $3 million.
Law generates $51 million for PA in a matter of hours
In 2017, the state received two payments in the days immediately following the passage of the law. One was a $1 million payment from Valley Forge Casino to remove the amenity fee requirement on the Category 3 property. The other was a $50 million payment by Stadium Casino LLC for its Category 2 casino license. The group is in the process of building a casino in the Stadium Park area of Philadelphia.
Other sources of revenue from the law include:
- Online lottery
- Video gambling terminals
- Mini-casino licenses
When it comes to the mini-casino licenses, the auctions are generating significantly more revenue than expected. The bare minimum of $7.5 million per mid meant the process would net at least $75 million. That was the worst case scenario.
Well, the process exceeded that number on just the second mini-casino auction. Here is a look at how much each mini casino cost its host property:
Mini-casino auction profits
|Parent Casino||Bid Amount||Location||Additional table games license?|
|Hollywood Casino||$50,100,000||Yoe in York County||N/A|
|Stadium Casino LLC||$40,100,005||Derry in Westmoreland County||N/A|
|Mount Airy Casino||$21,888,888.88||New Castle in Lawrence County||N/A|
|Parx Casino||$8,111,000||South Newton in Cumberland County||N/A|
|Hollywood Casino||$7,500,003||West Cocalico Township in Lancaster County||N/A|
Interactive gaming petitions generate $90 million so far
The 90-day window for PA casinos to apply for $10 million comprehensive interactive gaming petitions opened in mid-May. For the first 85 days, there was no news. A panic set in that there might be few or no applicants.
In the end, though, a majority of the 13 casinos ponied up the fee, which allows them to offer online peer-to-peer games like poker, online slots, and online table games. The nine casinos who filed for petitions are:
- Stadium Casino
- Mount Airy
- Sands Bethlehem
- Hollywood Casino
- Valley Forge
- Harrah’s Philadelphia
- Rivers Casino
- Sugarhouse Casino
The four properties that refrained from applying are not shut out of the game entirely though. Next up is their window to purchase individual licenses for each of the three categories at a rate of $4 million each.
Once that period ends, things get interesting. Any remaining licenses will result in an open application where entities outside of the state can petition to get in on the action.