SCOTUS Repeals National Sports Betting Prohibition And Pennsylvania Is Ready To Capitalize On It

On May 14, 2018 The US Supreme Court (SCOTUS) repealed the nationwide partial prohibition on single-sport wagering that had given Nevada a de facto monopoly* on the lucrative practice. That prohibition was the 1992 Professional and Amateur Sports Protection Act (PASPA). Pennsylvania legislators were ready for the SCOTUS decision and paved the way for their citizens to enjoy the full benefits of the repeal thanks to legislation passed last year. Here’s what you need to know about it.

New Jersey Governor Chris Christie: Pennsylvania’s heroic blocking fullback?

The PASPA was a congressional creation designed in 1992 to stem the “scourge” of illegal sports betting across the country. In a predictable pattern of unintended consequences, the legislation instead created a black (or gray due to lax enforcement) market valued in the tens of billions of dollars.

The case before SCOTUS that lead to the PASPA’s repeal was Murphy vs. NCAA, also known as the “New Jersey sports betting case. At the heart of the issue was New Jersey asserting its state’s right to regulate an activity (sports betting) underneath the broad federal ban. New Jersey had been bridling under the perceived federal overreach since 2009 when a state senator announced plans to challenge the prohibition. This challenge came in the form of a successful 2011 referendum that established legal and regulated sports wagering in New Jersey. The major sports leagues (both professional and amateur) challenged New Jersey’s actions and although the leagues (spearheaded by the NCAA) won the initial decisions in district and circuit courts, Governor Chris Christie’s vigorous efforts on appeal finally brought the case before SCOTUS, who in repealing PASPA, cleared the way for all states to regulate sports betting within their jurisdictions, free from a federal ban.

Pennsylvania was ready to capitalize on the opportunity

Seeing what New Jersey was up to and what opportunities lay in store, Pennsylvania law-makers were pro-active. In October of 2017, the PA Senate passed a bill to legalize online poker, sports betting, daily fantasy sports and other online casino games. Governor Tom Wolf quickly signed the bill (H 271) into law, legalizing PA online gaming under the Pennsylvania Gaming Control Board (PGCB). 

It’s still early, so all the details have yet to be fleshed out but we know a few things.  PA sports betting licenses will be available to all 12 current land-based casinos and “racinos.” The sports betting license fee is hefty at $10 million and so is the tax rate of 36 percent. For comparison, Nevada imposes a tax rate of 6.75 percent in their jurisdiction.

Despite these hurdles, there is no doubt that Pennsylvanians love to bet on their beloved teams and operators will move to be able to legally accept those wagers. It’s a good time to be a sports fan in Pennsylvania.

 

* Oregon, Montana, and Delaware were also exempted from PASPA but never legalized single-game sports betting.

Pennsylvania Slot Revenue Released for April

PA slot revenue numbers for April 2018

It’s the beginning of a new month so that means new PA slot machine revenue numbers to scour over. During the month of April, the 12 casinos in Pennsylvania generated a total of $206,178,528 which was 0.23% higher than the same time the previous year.

The uptick represents a welcome change from previous months which has seen PA revenue slot down since 2011.

A look at the numbers

For April, Parx Casino again held the number one slot casino in Pennsylvania. The top spot was followed by Sands Casino Resort Bethlehem in second place.

Casinos that performed the best from April 2017 included a couple of the smaller casinos — Valley Forge (up 9.07%) and Presque Isle Downs and Casino (up 7.22%). Parx also had a great month from the previous year, up 6.04%.

Eight of the 12 casinos had down months from April 2017 with the most notable declines from Lady Luck (-10.70%) and The Meadows Casino (-8.36%).

A complete look at PA slot machine revenue numbers for the month released by the Pennsylvania Gaming Control Board is as follows:

Pennsylvania Slot Machine Revenue for April 2018
CasinoApril 2018 RevenueApril 2017 RevenuePercentage Change
Parx Casino$35,633,140.42$33,604,058.086.04%
Sands Casino Resort Bethlehem$26,118,869.36$26,385,356.77-1.01%
Rivers Casino$23,998,042.62$23,004,351.494.32%
Hollywood Casino at Penn National Race Course$18,589,692.35$18,956,449.83-1.93%
The Meadows Casino$17,747,231.61$19,366,050.98-8.36%
Harrah's Philadelphia Casino and Racetrack$17,628,809.46$18,183,322.50-3.05%
Mohegan Sun Pocono$17,548,983.38$18,177,124.86-3.46%
SugarHouse Casino$15,657,907.11$15,800,770.46-0.90%
Mount Airy Casino Resort$12,646,470.36$12,697,643.00-0.40%
Presque Isle Downs and Casino$10,223,710.10$9,535,652.247.22%
Valley Forge Casino Resort$8,071,088.58$7,400,081.979.07%
Lady Luck Casino Nemacolin$2,314,582.17$2,591,889.93-10.70%

PA Slot numbers stabilize

Even with a modest increase for April, the news was seen as positive as perhaps recent declines have stopped.

Of course, another positive sign on the horizon is the launch of at least five mini casinos that have been awarded through auctions since January. These casinos are likely a couple years away, but will almost certainly be a boost to revenue when begin taking bets.

Pennsylvania Mini Casino Auction Fails to a Attract a Bid

PA Mini Casino Fails to Attract Bids for 5th License

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
DateOrganizationBidLocation
Jan 10, 2018Mountainview Thoroughbred Racing Association (Penn National)$50.1 MillionYoe, York County
Jan 24, 2018Stadium LLC (owns Phily Live! project)$40.1 MillionDerry, Westmoreland County
February 8, 2018Mount Airy$21.2 MillionNew Castle, Lawrence County
February 24, 2018Greenwood Gaming and Entertainment Inc. (Parx)$8.1 MillionSouth Newton Township, Cumberland County
April 4, 2018Mountainview Thoroughbred Racing Association (Penn National)$7.5 MillionWest 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.

Penn National Gaming Snags Second Mini-Casino License

Penn National Wins Second Mini-Casino License

On Wednesday, Pennsylvania’s fifth mini-casino license was awarded to the owners of Penn National Gaming, who bid $7,500,003 , the lone bid for the day’s auction.

With their bid, the company has selected a 15-mile radius near West Cocalico Township, located in Lancaster Country. The mini-casino represents the second mini-casino license that Penn National Gaming has acquired since bidding began earlier this year.

Details of Mini Casino #5

Penn National’s bid today was the first time the company was eligible to bid in a “Category 4,” or mini-casino auction, since they won the first mini casino auction on January 10th with a bid of $50 million. The first four licenses were awarded between January 10th and February 22nd, before the statefailed to attract any bids on March 10th.

The $7.5 million bid by Penn National was the minimum amount needed to secure a mini-casino license.

The location of the casino was selected to be within a 15 mile radius that is centered around West Cocalico Township. In choosing the location, Penn National looks to further protect the Hollywood Casino located in Harrisburg. On January 10th, Penn National strategically selected a their first mini casino location to be placed south of Harrisburg on the way to Baltimore, Maryland in Yoe Pennsylvania.

Below is a map of mini-casino locations determined thus far:

Mini Casino Locations in Pennsylvania

Penn National Quickly Expanding In Pennsylvania

Penn National has been extremely active in Pennsylvania’s gambling expansion despite filing a lawsuit earlier this year protesting mini-casino placement rules.

In addition to the two mini casino locations, last December Penn National agreed to acquire Pinnacle Entertainment, which operates 16 casinos across the country including the The Meadows Casino and Racetrack. That deal was approved by Pennsylvania regulators last week as well as shareholders from both companies over the last two weeks.

Penn National’s auction win today means the company will operate four major properties in the state including a couple of off-track wagering locations in York and Lancaster County.

What’s Next

With five of the ten mini-casino licenses claimed thus far, five more licenses remain. The next mini casino auction will be held on April 18th at 10 AM. Given that the fifth mini-casino license went for just over the $7.5 million minimum bid and Penn National was the only bidder on the day, it will be interesting to see if there is any bid on April 18th. The second phase of the mini-casino auction process could be nearing an end.

Will Penn National bid for yet another license or will a casino that abstained from bidding on Wednesday decide to jump into the fray? If there are no bids later this month, the mini-casino auction process will be opened up to other entities.

Although it is safe to assume that the days of bids into the tens of millions of dollars could be over, we will have to stay tuned over the next few weeks to see if Pennsylvania casinos continue to bid to keep other entities out.

Pennsylvania Mini Casino License Auction Delayed

Next PA mini-casino auction delayed

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.

No Bids For 5th Pennsylvania Mini Casino License

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:

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.

Drama Surrounds 4th PA Mini Casino License

Pennsylvania Mini Casino Locations

On Wednesday, the Pennsylvania Gaming Control Board had been expected to announce the winner of the 4th PA mini-casino license. A bid was submitted but soon invalidated by the PGCB due to location issues. This led to redo on Thursday, which resulted in a winning bid from Greenwood Gaming and Entertainment — operator of Parx Casino — who bid $8.1 million to place a casino in southern Pennsylvania near the Maryland border.

Glennwood Gaming’s bid marks a big drop from the initial three mini casinos licenses, which have yielded bids ranging from $21.9 million to over $50.1 million. With this latest bid, over $120 million has been paid in license fees for the first four mini casinos. Bids start at a minimum of $7.5 million.

Details of the Latest Mini Casino License

In selecting the coordinates for their new mini casino, Greenwood chose a location in south central Pennsylvania along Interstate 81 in Cumberland Country. The central location of the coordinates are targeted for the South Newton Township, close to Gettysburg and near the Maryland border. The company has the rights to place a casino within a 15 mile radius.

As mentioned, Greenwood Gaming and Entertainment owns and operates the Parx Casino, which is the largest casino by slots revenue in 2017. Parx Casino, which offers table games, slots, poker and a race track, is located in the northwestern Philadelphia suburbs near the New Jersey border. The company also plans to launch the Live! Hotel and Casino in south Philadelphia with Cordish Gaming. Earlier this month, the company voiced their objections to branded online gambling skins in Pennsylvania.

The new location of the Greenwood casino will allow the company to expand outside of Philadelphia in a relatively untapped area, with only one existing casino nearby.

The casino is to placed in the general area of the Hollywood Casino, owned by Penn National, located in Harrisburg. The company bid over $50 million for the first license in an effort to protect turf near the casino. The site of the new Glennwood-owned will be around 35 miles to the southwest. The casino is currently suing Pennsylvania for how the state went about determining mini-casino locations, arguing that Penn National would unfairly negatively impacted by the rules.

In winning the rights of the newest license, Glennwood will be able to add up to 750 slot machines and up to 40 table games in the new location.

What Happened on Wednesday?

All of Thursday’s news came on the heels of drama on Wednesday that saw Sands Bethworks Gaming bid $9.9 million to place a casino in western Pennsylvania in Mercer Country. The problem? The proposed location encroached on the area of the last mini-casino license awarded to Mount Airy on February 8th. Mount Airy plans to place their new mini-casino near New Castle.

This resulted in redo on Thursday morning at which point the newest license was awarded to Greenwood. Fortunately, the placement of this casino did not violate any location requirements.

The next mini-casino auction will be held on March 7th and will again be announced by the Pennsylvania Gaming Control Board. Auctions will continue to be held two weeks until all ten licenses are purchased, either by in-state casinos and then — other entities.

Mount Airy Casino Owners Bid $21.9 Million For Third Mini Casino License

New Castle PA Mini Casino Mount Airy

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.

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.

Second PA Mini-Casino Awarded to Stadium LLC Will Be Placed Near Greensburg

Pennsylvania Mini Casino #2 Awarded

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.

Penn National Gaming Wins First Mini Casino Bid

Penn National, Mini Casino owner

On Wednesday, the winner of the first Pennsylvania mini casino license was awarded to Penn National Gaming at a price tag just over $50 million. The license is the first of ten that will be auctioned over the next few months.

In making the winning bid Penn National outbid three companies, which were not named. The $50 million bid accounts for roughly half the state needs to fund part of the state budget.

What to expect from the new casino

The new Penn National casino will go in south central Pennsylvania. Although a specific location is not known at this time, the casino is marked to be built within a 30 mile radius that includes York, near the Maryland border. The dead center of the potential location is located in Yoe. Many Pennsylvania towns and municipalities choose to opt-out in the weeks leading up to the auction.

Area of Penn National Gaming Casinos

As part of the license requirements, a mini casino can have up to 750 slot machines and 30 table games — with an opportunity to increase to 40 at a later date. The $50 million price tag enables the mini-casino to offer slots; however, Penn National is also expected to pay an additional $2.5 million for the ability to offer table games. Penn National will need to meet a variety of additional license requirements to go forward with the mini casino, including paying $50.1 million to the state by January 12th.

Penn National suing Pennsylvania over mini casinos

In a interesting part of the story, Penn National is currently suing the state of Pennsylvania over the expansion of mini-casinos in the state, which they say will hurt the Penn National-owned Hollywood Casino. By making the bid, the company is hedging its bets should its lawsuit fail. If the lawsuit wins, Penn National will withdraw their bid.

As part of the October gambling expansion, a mini-casino may not go up within 25 miles of an existing casino or within 15 miles of another mini-casino. Due to the fact that Hollywood Casino sits in relative isolation compared to most PA casinos — most of which are in groups — they could be uniquely impacted by the new mini casinos.

Penn National Vice President Eric Schippers said the company is attempting to protect Hollywood Casino. “Frankly, it was an investment we felt like we had to make to protect a major market area for our casino. That cannibalization would have been, in our view, very significant, which is why we filed our federal lawsuit against the law.”

Penn National Gaming currently operates a casino in Harrisburg Pennsylvania. The company also has 26 facilities in 18 states. Penn National Gaming’s stock was mostly unchanged on the news.

Whats next?

Mini casino auctions will take place every two weeks up until May 16th, when out of state operators could join the mix. The next auction will be held on January 24th at 10 AM ET.

With a starting bid of $7.5 million, the $50 million bid vastly exceeded expectations. Ten years ago, Pennsylvania casinos paid around $50 million to operate up to 5,000 slot machines. The high price tag could impact the bids for future mini casinos. In two weeks time, we shall see.