Pennsylvania Satellite Casino Auction Fails To Get A Bid

Posted on: September 4, 2019, 10:23h. 

Last updated on: September 30, 2019, 01:08h.

Devin O'Connor @CasinoorgDevinO Read More

Expertise: Asia Pacific Gaming, Commercial Gaming, Legislation, Politics.

The Pennsylvania satellite casino auction held today in Harrisburg did not have a minimum qualifying $7.5 million bid presented to state regulators.

Under the state’s Gaming Expansion Act of 2017, the Pennsylvania Gaming Control Board (PGCB) was authorized to approve as many as 10 Category 4 satellite casinos. But after five successful auctions in 2018, the state failed to attract a single qualifying bid in the last two rounds.

An act passed earlier this year mandates that the PGCB hold no further auctions if a round failed to generate a qualifying offer. Only the state’s current licensed gaming operators were allowed to compete for the mini casinos.

Each of the five Category 4 venues is initially permitted to house up to 750 slot machines and 30 table games.

Market Saturation

Pennsylvania is presently home to 12 land-based full-scale commercial casinos. A 13th – Live! Casino Hotel Philadelphia in the city’s stadium district – is under construction.

When Gov. Tom Wolf (D) and the Republican-controlled General Assembly passed the Expanded Gaming Act in an effort to help bridge a budget gap without raising taxes, many of the casino operators voiced opposition.

Penn National Gaming, the oldest licensed gaming operator in the state, owns Hollywood Casino outside of the capital. It sued the state on claims that the Category 4 licenses unfairly protected casinos in the Philadelphia area, while allowing a mini casino to come within 25 miles of its Hollywood property.

The company later dropped the lawsuit and bid $50.1 million to win the first Category 4 auction. The company secured York County for its satellite casino, and has proposed a development inside the former Sears department store at the York Galleria Mall.

It was an investment we felt like we had to make to protect a major market for our casino,” Penn VP of Public Affairs Eric Schippers said at the time. “The cannibalization would have been very significant.”

Along with the satellites, the Expanded Gaming Act gave permission to qualified diesel truck stops to house as many as five video gaming terminals, airports to build gaming lounges, online casino operations to commence, set sports betting regulations, and approved daily fantasy sports.

The decision by all the licensed casino operators to fold on this week’s Category 4 auction might hint that they believe the Keystone State has reached its gaming saturation point.

Sports Betting

Pennsylvania is one of 13 states that now has regulated sports betting operational. The state permits mobile betting, which gaming analysts say is critical to successful sports betting.

But for those who want the in-person sports betting experience, most Pennsylvanians won’t soon need to venture far, as the mini casinos will be permitted to house sportsbooks and lounges after paying a $10 million fee to the state.