With mini-casino licenses, if at first you don’t succeed, try, try, try again.
That’s the adage Pennsylvania is following by scheduling a resumption of auctions for Category 4 casino licenses, more often called mini-casinos or satellite casinos. The next round of auctions begins on Sept. 4.
The state’s 2017 gambling expansion law authorized the creation of 10 mini-casinos.
Mini-casino auctions stopped in 2018 after no interest
From a state revenue perspective, mini-casinos have been a big success so far.
Pennsylvania is now the nation’s No. 2 state for commercial casino revenue, trailing only Nevada. And it is No. 1 in tax revenue from casino gambling.
The first five satellite casino auctions generated a whopping total of $127 million. Bidding for the remaining licenses stopped in April of 2018.
No one offered to buy the sixth available license and further auctions temporarily halted.
Joe Weinert, an executive vice president at Spectrum Gaming Group, is skeptical about renewed auctions:
“I think the market has already spoken on that.”
Prompted by legislators, mini-casino auctions resume in September
A provision slipped into a budget bill recently signed by Gov. Tom Wolf.
There were two important tweaks in the language of the bill when it comes to mini-casinos.
The first is a sunset provision that no more future auctions can be held once a sale is scheduled and there are no interested bidders. Additionally, all auctions must conclude by the end of the year.
The second tweak is a 15-mile change in where licensees can build mini-casino properties.
The new language increased the distance from 25 miles away from an established facility to 40 miles away.
The Philadelphia Inquirer examined opt-outs by communities and existing buffer zones. The publication found few areas for development in populous areas, other than Altoona, several townships near State College, and the Lycoming Mall near Williamsport.
And almost everything east of the Susquehanna River and in western Pennsylvania is off limits, according to the Inquirer.
Spectrum’s Weinert also questioned if location changes will sit with everyone who had already entered the market under the old rules.
Only the owners of Pennsylvania’s 12 operating casinos and a planned 13th casino for Philadelphia are qualified to bid.
Here is a look at what mini-casino sites were available before the first round of auctions. Yellow is the buffer zones and blue are opted-out counties. Take note the yellow buffer zones for this round reflect a 40-mile minimum, while these were just 25 miles:
Mini-casino bidding details
The first auction on Sept. 4, 2019, begins at 10 a.m. just prior to the start of the regularly scheduled PGCB meeting. The auction will appear on the PGCB livestream.
There is nothing mini about the fees required. The minimum bid for a mini-casino license is $7.5 million.
Facilities may have between 300 and 750 slot machines and a maximum of 30 table games at the opening. Operators can add 10 more table games after the first year for an additional $2.5 million.
Winning bidders must pay the winning bid amount no later than 4 p.m. on the second business day after the date of the auction. Those bidders then have up to six months to submit an application which will include an exact location of the proposed satellite casino.
Existing locations for winning mini-casino bidders
Previous bid winners and the auction price paid are:
- Mountainview Thoroughbred Racing Association, LLC, which operates Hollywood Casino at Penn National Race Course, is seeking a license to construct a satellite casino in vacant mall space in Springettsbury Township, York County. ($50,100,000)
- Stadium Casino, LLC, which is constructing a Category 2 casino in Philadelphia, is seeking a license to construct a satellite casino in vacant mall space in Hempfield Township, Westmoreland County. ($40,100,005)
- Mount Airy #1, LLC which operates the Mount Airy Casino Resort, is seeking a license to construct a satellite casino in Big Beaver Borough, Beaver County. ($21,188,888.88)
- Greenwood Gaming and Entertainment Inc., which operates the Parx Casino, is seeking a license to construct a satellite casino in Shippensburg Township, Cumberland County. ($8,111,000)
- Mountainview Thoroughbred Racing Association, LLC was a successful bidder a second time and was awarded a Category 4 license on June 12, 2019, to construct a satellite casino in Caernarvon Township, Berks County. While the site is in Caernarvon, the area is generally referred to as Morgantown, which is actually a zip code sprawling through three counties. ($7,5000,003).
Additional auction procedure details will post on the PGCB website.