The Eagles are not the only Philadelphia entity winning things these days. The Pennsylvania Gaming Control Board (PGCB) held its second auction for satellite casino properties on Wednesday. The winner was the yet-to-be-built Philly Live! casino’s company, Stadium Casino LLC.
Stadium Casino put in a bid of $40.1 million ($40,100,005 to be exact), besting three other contenders. The group selected Derry, PA in Westmoreland County as the centerpoint of its possible location.
Stadium Casino LLC will have presence in two major cities
With this satellite property, the new kid on the Pennsylvania casino block will have properties in or near the state’s two biggest cities. Derry, PA in Westmoreland County is around 40 miles west of Pittsburgh. It is not to be confused with Derry Township, PA in Dauphin County near Harrisburg.
While the final satellite casino does not have to be precisely on the coordinates provided in the bid, the property will be within 15 miles of it.
It appears Stadium Casino LLC selected the satellite location as close as it could get to Pittsburgh without violating the buffer zones of any existing Category 1-3 casinos.
There are currently three casinos in and around Pittsburgh. Here is how far each of them are from the Derry location:
A look at the buffer zones and opt-out municipalities show that the Westmoreland County location is about as close as a property can get to Pittsburgh given the parameters satellite properties must satisfy.
The satellite bids continue to be higher than expected
Penn National’s opening bid of $50.1 million far exceeded expectations for how much each of the 10 satelitte casino licenses would go for. This second bid is also on the high side. Forecasters initially expected the top locations would go for around $30 million.
Now that the big bids are in, it is possible prices go down. Once an eligible casino bids on a property, they are no longer allowed to participate in the initial auctions. Station Casinos LLC is out of the running, leaving nine possible bidders from the 11 eligible Category 1 and 2 casino companies.
Technically though, thanks to its pending acquisition of Pinnacle, Penn National effectively has two satellite bids it can exercise. After shelling out big bucks for one in the name of Hollywood Casino, it can bid again using The Meadows’ license.
The first auction generated four bidders, as did the second. In other words, just because a property is not bidding now does not mean that it will not bid. It was clear to many that Penn National was going to bid first. With that in mind, other properties might be gauging the competition before entering the fray.
What’s ahead in the mini casino auction process?
Should the existing Category 1 and casinos not buy up all the satellite casinos, there is a process that opens up the bidding to others. There are eight more auctions scheduled from now until May. Once an auction takes place with no bids, the initial auction period is over.
After the initial auction period concludes, the subsequent auction period begins. At this point, bidding opens up to Category 3 casinos Valley Forge Casino and Lady Luck Nemacolin. Additionally, successful bidders in the initial auction process will get the chance to bid on a second license if they choose to do so.
Once there is a subsequent auction without bidders, the satellite auction period is technically over. However, it is then at the discretion of PCGB to schedule additional auctions if deemed necessary.
What’s ahead for Stadium Casino LLC?
Now that Stadium Casino LLC secured the bid, the company needs to put up the money, and quickly. The company has until Jan. 26 to pay for the property. That $40.1 million includes the $7.5 million satellite casino licensing fee.
The satellite license allows the new property to house 300-750 slot machines. If they want to add table games, it will cost an additional $2.5 million on top of the bid.
Once Stadium Casino pays up, the group has six months to present its completed Category 4 application, which includes all the details about size, jobs, amenities, and so forth.
It will be a busy six months for the company. It just got the all-clear to proceed on construction of the Philly Live! casino in Stadium Park.