Penn National Wins Second PA Satellite Casino License

Hoping to protect its flagship gaming venue Hollywood Casino, Penn National has secured their second satellite casino license in Pennsylvania.

The Pennsylvania Gaming Control Board hosted the 5th Category 4 Casino auction this week with Mountainview Thoroughbred Racing Association, LLC, earning the satellite casino license after being the sole bidder. Operator of the Hollywood Casino at Penn National Race Course, the subsidiary of Penn National, bid $7,500,003 (£53235022) to secure their second license for a mini-casino venue.

With the new license, Penn National hopes to protect Hollywood Casino and bring in visitors from Reading, Lancaster, and the Philadelphia suburbs. The company chose an area within a 15-mile radius of a center location in the West Cocalico Township for this license.

The auction win marks the second time that Penn National has earned a satellite casino license. The first was won on January 10, 2018, when the company bid a whopping $50.1m (£35.6m) . For that license, the center point location is in York County, citing the Borough of Yoe.

Why a second license?

By securing the rights to add a satellite casino between the areas of Reading and Lancaster with the second license, Penn National will be better suited to defend a vital market from cannibalization by competitors. They will also be able to offer services to the suburbs of Philadelphia. With a new casino in this region, Penn National could access the existing customer base of Hollywood Casino, which preferable to losing the customers to a competitor.

In a Penn Live report, the senior vice president for public relations of Penn National, Eric Schippers, stated: “Our goal is to try to protect our existing market share, while bringing incremental value to our shareholders by reaching into new markets. It’s a lot easier for someone from Main Line [outside Philadelphia] to sample our brand in this region than it would be for them to drive all the way to Grantville.”

A location has yet to be determined for this new license. Schippers stated that Penn National is focused on selecting a site that will create a good community partnership. The company was able to apply for a second satellite casino license during Wednesday’s auction because the last scheduled auction came and went without any bidder interest. Since there were no bids at that auction, companies that had already secured a license could apply again, based on procedures created by the Gaming Control Board before the auctioning process began.

Current license holders

Along with Penn National Gaming, three other companies have secured licensing for a satellite casino. Penn National secured the very first license, followed by Stadium Casino, LLC, on January 24, when a bid of $40.1m (£28.5m)was placed. The company does not have an operational gaming venue in the state but is set to construct a casino in Philadelphia. They will be creating the mini-casino in Derry Township.

The next satellite license winner was the operator of the Mount Airy Casino Resort, Mount Airy #1, LLC. A $21.1m (£15m) bid secured the license, with the venue to be constructed in the New Castle area.

On February 22, the operator of the Parx Casino, Greenwood Gaming and Entertainment Inc., was able to win the next license, with an $8.1m (£5.75m) bid. The satellite gaming venue will be constructed in South Newton Township.

The Category 4 Slot Machine License allows for the operation of 300 to 750 slot machines. To be considered at auction, entities must submit a bid of $7.5m (£5.3m) minimum. The winner can then choose to petition for approval to offer 30 table games within the satellite casino, at a cost of $2.5m (£1.8m).

The next auction is scheduled for April 18, 2018, with five satellite casino licenses remaining.

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