Pennsylvania Online Casinos

An auction for the sixth mini casino license was held on Wednesday but attracted no bids. The Pennsylvania Gaming Control Board announced they would make a decision on whether to hold a subsequent round at a later date.

In making their decision, the PGCB will determine if it is in the best interests of the state to hold additional rounds that could potentially open bidding for all Pennsylvania gaming license holders as well as any other yet-to-be-determined qualified entity.

Five Mini Casino Licenses Awarded Thus Far

During the initial round of auctions, four licenses were awarded. Once that round concluded without a bid, resort casinos as well as casinos that already bid on a license would be eligible. That round led to Penn National acquiring their second mini-casino license at bid of just over $7,500,003, just above the minimum. Wednesday’s auction was for the second license during the second round.

Below is a summary of the mini-casino licenses awarded thus far:

Pennsylvania Mini Casino License Recipients
Date	Organization	Bid	Location
Jan 10, 2018	Mountainview Thoroughbred Racing Association (Penn National)	$50.1 Million	Yoe, York County
Jan 24, 2018	Stadium LLC (owns Phily Live! project)	$40.1 Million	Derry, Westmoreland County
February 8, 2018	Mount Airy	$21.2 Million	New Castle, Lawrence County
February 24, 2018	Greenwood Gaming and Entertainment Inc. (Parx)	$8.1 Million	South Newton Township, Cumberland County
April 4, 2018	Mountainview Thoroughbred Racing Association (Penn National)	$7.5 Million	West Cocalico, Lancaster County

What’s Next

By all accounts, the Pennsylvania mini-casino — or Category 4 — license process has been a huge success. The state has so far raised over $127 million from bids over five auctions, an average of over $25 million per license. With minimum bids starting at $7.5 million, the state is $50 million over the figure if all ten of the allocated licenses were to go for the minimum.

Before bidding began, the state estimated that it would raise $100 million if all ten licenses were awarded.

Should the PGCB decide to hold additional auctions, the regulatory body would establish criteria for Round 3 of the auctions. Given the original auction schedule, that will likely be announced over the coming weeks.

On Wednesday, the Pennsylvania Gambing Control Board was to hold its auction for its fifth mini-casino license. Unfortunately, due to a snowstorm in the state we will have to wait a couple more weeks before we find out who is the next Pennsylvania casino owner.

This week’s delay marked at least the second delay of a mini-casino license this winter, with a March 7th auction pushed back a couple days earlier this month.

The PGCB will delay the next auction to be held in Harrisburg until April 4th.

A look ahead to April 4th

The next auction will be particularly interesting for observers because it will mark the beginning of the second stage of the auction process. Due to the fact there were no bids last time out, all of Pennsylvania’s casinos will be able to bid on the April 4th license.

This includes two new casinos — Nemacolin Woodlands Resort and Valley Forge — as well as each of the casinos that have previously won a mini-casino license. The six additional casinos that will be eligible to be bid will likely lead to more activity than we saw over the last two auctions.

And the winner is…

Despite a lack of bids for the last auction, the state has reaped more than $118 million from the first four bids — including $90 million alone from the first two auctions. Might those two casinos — Penn National and Stadium LLC— want to further shore up their territory with another strategically placed casino?

Penn National will put their first mini-casino in Yoe, near York in Southern Pennsylvania. This location was selected due to the proximity to the Hollywood Casino in Harrisburg. Might Penn National want to secure their turf some more by bringing in another casino to the area?

The second mini-casino auction winner came from Stadium LLC with a bid of over $40 million. The owner of the soon-to-be-built Phily Live Casino will put the location of their mini casino near Greensburg, east of Pittsburgh.

While the two largest bidders of the first round could be favorites to take a stab at the next license, perhaps the large bids don’t leave enough room for additional mini-casinos. Winners of later rounds — and smaller bids — could surprise by perhaps bidding more for subsequent auctions.

Or maybe the resort casinos of Nemacolin Woodlands and Valley Forge will take advantage of their first opportunity to expand in the state.

We thought we would know this information on Wednesday but we will now have to wait another two weeks — at least until another snow storm hits The Keystone State.

After a snow storm delayed the 5th Pennsylvania mini-casino auction Wednesday, a rescheduled auction was held on Friday. But unlike the large bids that were prevalent during the first four auctions, there were no bids on Friday.

The lack of bids on Friday has effectively the first round of the mini casino process.

What happens next

Now that the first round of the mini-casino license process is complete, bidding will now open up to additional parties for subsequent rounds. For now this will include the following entities:

• Casinos that have already bid on a mini-casino license (Penn National, Stadium LLC, Mount Airy and Greenwood Gaming)
• Owners of two resort casinos – Lady Luck Casino Nemacolin and Valley Forge Casino Resort
• All other Pennsylvania casino owners – although this is unlikely given that these casinos have passed on bidding thus far

There are potentially six more mini-casino licenses up for grabs. The second phase of the PA mini-casino auction process will begin on March 21 when bids will be accepted for the next license. Subsequent auctions will be held every two weeks for new PA mini casinos, which can include up to 750 slot machines and 30 table games.

What’s happened so far

The first four auctions raised a total of $120 million in license fees during January and February:

• January 10th: $50.1 million bid by Penn National owners
• January 24th: $40.1 million bid by Stadium LLC (the same group that is building the in-development Philadelphia LIVE! Casino)
• February 7th: $21.9 million bid by Mount Airy owners
• February 22nd: $8.1 million bid by Greenwood Gaming (owner of Parx Casino)
• March 10th: No bids

Was Friday’s developments a surprise?

After bids for the two mini-casinos vastly exceeded expectations, bids for the 3rd and 4th casinos have been much more modest. Indeed, in late February the $8.1 million bid by Greenwood Gaming was just slightly over the $7.5 million minimum bid. Given the precipitous decline in bids over the last couple auctions, what happened on Friday was note entirely a surprise.

One interesting omission on Friday was Sands Bethlehem, which was initially the winning bidder in the last auction but was ultimately rejected due to the proposed location’s close proximity to an earlier mini-casino site. But between the late February auction and Friday, Sands Bethlehem had actually announced it planned to sell their existing PA casino to an Alabama Indian tribe.

The winning bid for the third Pennsylvania mini-casino was announced by the Pennsylvania Gaming Control Board on Thursday morning. The winning bid goes to the ownership group of the Mount Airy Casino Resort, whose $21.9 million bid was the highest of three bids. The company intends to put the new mini-casino in Western Pennsylvania, north of Pittsburgh.

The next mini casino license auction is slated for February 21st.

Mount Airy #1, LLC @MountAiryCasino submitted high bid for today's category 4 casino auction. CenterPoint location for their 15 mile radius is New Castle, Lawrence County.

— PGCB (@PAGamingControl) February 8, 2018

What happened

The current Mount Airy Casino is located in the Pocono Mountains on the eastern side of the state with competition from many other casinos in the area including the Mohegan Sun Pocono and Sands Bethlehem. The casino generated nearly $148 million in slot revenue in 2017, ninth in the state.

With their bid, the Mount Airy ownership group is hoping to expand their reach into a different part of the state. The new mini-casino will be placed in New Castle, located in Lawrence county. This area is significant because the county borders Ohio and serves in a attractive location between the casinos of Pittsburgh to the south and Presque Isle Downs and Casino to the north.

The casino will attract patrons along the I-376 corridor as well as into Eastern Ohio. Hollywood Gaming at Mahoning Valley is around 40 minutes away and could serve as competition to residents of Youngstown.

Officials from Lawrence county have tried for more than ten years to attract a casino to the area; however, in July 2016 a proposed 250-acre project by the Lawrence Downs Casino and Racing Resort was denied by the Pennsylvania Gaming Control Board.

Despite the “mini” moniker these mini-casinos aren’t exactly small. Mount Airy will now be able to build a mini casino with up to 750 slot machines. For an additional $2.5 million, they can operate 30 table games with further opportunity to add 10 tables after a year.

A huge success so far for PA mini casino auctions

Thursdays auction was the third mini-casino auction since the state’s landmark gambling bill passed last October. Previous auctions were held on January 10th and again on January 24th.

With Mount Airy’s bid, the state has turned heads by raising over $111 million dollars so far as the state desperately hopes to address its budget considers. The state previously had estimated that $100 million would be generated through the mini-casino licensing process, assuming minimum bids of $7.5 million for each of the ten licenses + $2.5 million for table games were sold.

Penn National Gaming was the winner of the first auction with a $50.1 million bid to put a casino south of their existing Hollywood Casino, near the Maryland border. The location for the casino will be in Yoe, in York County.

That auction was followed up by a $40.1 million bid by Stadium LLC on January 24th. The group plans to place their mini-casino east of Pittsburgh, in the Derry Township near Greenburg, which is located in Westmoreland County. Stadium LLC is the same group behind the $600 million Phily Live! set to open in 2020.

What’s next

Pennsylvania will continue the mini-casino auction process through May 16th with the next auction held on February 21st.

As part of the state’s gambling expansion, Pennsylvania is allowing up to 10 new mini casinos to be scattered around the state. The auctions are limited to the state’s existing 12 casinos but will expand to other entities should PA casinos stop bidding.

The auction for the second Pennsylvania mini-casino license was held on Wednesday morning and has been awarded to Stadium Casino LLC, whose $40.1 million bid was the highest. The group has selected Derry Township in Westmoreland County for the location of the new casino.

Stadium LLC does not currently have a casino in PA, but it is the same group that has plans to build a $600 million dollar Live! Hotel and Casino in Philadelphia, slated to become the 13th casino in Pennsylvania in 2020. It has until Friday to pay the $40.1 price tag to the Pennsylvania Gaming Control Board for its successful bid.

Location of the 2nd mini-casino

Derry Township is located near Greensburg and is about a 40 minute drive from Pittsburgh. The location was selected due largely to its proximity to the state’s second largest city. The casino is expected to attract some patrons from The Meadows Racetrack & Casino and Rivers Casino but also new customers between the two casinos.

As long as the proposed casino location is no more than 35 miles from an existing casino and the town or place has not opted-out, a mini casino can be built. Watch a local report from WPXI on the new location:

Stadium LLC will be allowed to build a casino with up to 700 slot machines and up to 30 table games with another 10 after a year.

Next auction: February 7th

Wednesday’s auction comes two weeks after Penn National bid surprised nearly everyone with their $50 million bid for the rights to put a mini-casino in South Eastern Pennsylvania near York. The company is also simultaneously trying to sue the state as it claims the new mini-casino location rules could unfairly hurt Penn National’s Hollywood Casino.

The two winning bids for PA mini casino licenses have totaled over $90 million, a figure that is sure to please those who supported the legislation and the state’s efforts to raise money for the budget. Pennsylvania’s existing 10 casino owners are given exclusive access to the bidding process until PA casinos begin passing on the auctions. A minimum bid of $7.5 million is required.

A third mini-casino auction will take place two weeks from now on February 7th. Subsequent auctions will be held every 2 weeks through May. Reading and Clearfield County are among the locations which could draw attention as additional mini-casino auctions are held.

Although online gambling got a lot of the attention when Pennsylvania passed a large gambling expansion in late October, there were also other gambling initiatives included that will impact Pennsylvania for the years to come. One of the most notable parts of the comprehensive gambling reform was the establishment of so called “mini casinos” or satellite casinos.

As part of the new law, cities and towns have the opportunity of opting out of hosting a mini casino within their borders. If they don’t want to host a mini-casino, the governing body of the town or city must opt-out by December 31st and inform the Pennsylvania Gaming Control Board.

And many Pennsylvania towns are doing just that. Since legislation was passed over a month ago, nearly 200 municipalities have informed the PGCB that they will not allow a satellite casino in their jurisdiction. Many of the locations to opt-out of the casinos are located in Eastern Pennsylvania, but some are coming from Western Pennsylvania as well.

Some are just not seeing a benefit of allowing new brick and mortar gambling in their communities. We’re not geographically suited to that business,” said council member of the town of North Irwin. Others cited the potential impact on the local economy.

Despite the decision of dozens of Pennsylvania municipalities, towns are able to reverse their decision at a later date should they change their minds after researching the matter.

What is a Pennsylvania mini casino?

With the passage of Pennsylvania’s online gambling expansion, up to 10 licenses for satellite or mini casinos throughout the state were allowed. Despite the name, these casinos are not exactly tiny. While not as large as the 12 existing casinos in the state, these casinos can run up to 50 table games as well as operate between 300 and 750 slot machines.

Pennsylvania’s mini casinos are likely to be owned by existing Pennsylvania casinos. Still, the requirement of the new legislation mandates that a satellite casino can not be within 25 miles of an existing large casino.

Initial bids to operate the mini-casinos will start at $7.5 million in January.