Pennsylvania Gaming Officials to Hold September Satellite Casino Auction

  • PGCB will auction one of its ten casino licenses again after Beaver County project abandoned
  • Winning bidder can develop a casino venue with 750 slot machines and 30 table games
  • Penn National Gaming won the state's first satellite casino license in 2018
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The Pennsylvania Gaming Control Board plans to auction another satellite casino license on September 2. [Image: Shutterstock.com]

A new auction for an old license

Pennsylvania gaming officials will hold the state’s latest auction for a category 4 casino license on September 2.

Under the current Pennsylvania Gaming Act, signed into law by Governor Tom Wolf in 2017 and amended in 2019, the Pennsylvania Gaming Control Board (PGCB) can offer competitive bidding for up to ten mini-casino locations. Separate auctions are mandatory for each license and the minimum bid is $7.5m.

Mount Airy Casino in Mount Pocono did not generate the required funding for its Beaver County project

The PGCB is putting one of these ten licenses back up for auction after the parent company of Mount Airy Casino in Mount Pocono did not generate the required funding for its Beaver County project. The company was the winning bidder in the state’s third auction in 2018.

In the September auction, the winning bidder will be permitted to establish a gaming venue in the state with up to 750 slot machines and 30 table games, expandable to 40 after one year. The bidder must submit a reserved location which cannot be within 40 linear miles of any existing or planned casinos.

Other PA satellite auctions

Pennsylvania officials auctioned four of its licenses after the Pennsylvania Gaming Act was signed into law in 2017. When the fifth auction failed to receive any bids, however, the state was forced to alter its policy to allow existing license holders to participate in the auctions.

As a result, Penn National won its second Pennsylvania satellite casino license in April 2018. In winning the license, the operator aimed to protect its Hollywood Casino at Penn National Race Course and bring in visitors from surrounding areas.  A subsidiary of the operator was the sole bidder, with an offer of $7.5m – a stark contrast to the $50.1m Penn National bid to win the state’s first license in January 2018.

In March of last year, around 250 residents of Morgantown, Pennsylvania attended Penn National Gaming’s public hearing for the construction of its satellite casino in the Caernarvon Township. Many locals voiced their opposition to the operator’s plans, expressing concerns over addiction, family problems, and crime. Despite this, the Caernarvon Township Board gave their unanimous approval for the project.

Stadium Casino, LLC won the state’s second license on January 24, 2018 with a bid of $40.1m. The operator is currently developing a casino in Philadelphia and will create the satellite casino in Derry Township. The operator of the Parx Casino, Greenwood Gaming and Entertainment Inc., also won a license in February 2018. The company bid $8.1m and will construct its casino in South Newton Township.

Pennsylvania’s gambling market

Pennsylvania’s gambling revenue reached record levels last year, partly driven by the introduction of sports betting and online gambling. Total gambling revenue for 2019 was $3.41bn, a rise of approximately 4.5% year-on-year. Meanwhile, sports betting revenue totaled $84m, with online revenue totaling $43m and retail earnings at $41.1m. Total sports betting handle was $1.5bn for the period.

the state generated online casino revenue of $55.8m in May

Despite land-based casino revenue being impacted by the closure of properties amid the COVID-19 pandemic, online gambling revenue has seen record numbers this year. Figures from the PGCB’s latest revenue report show the state generated online casino revenue of $55.8m in May. This is a rise of almost 30% month-on-month and the first time monthly online casino revenue has eclipsed $50m.