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.

Boyd Gaming Acquires Valley Forge Casino For $280 Million

Valley Forge Casino Purchased by Boyd Las Vegas

Las Vegas’s Boyd Gaming has announced that they are set to acquire the Valley Forge Casino Resort for a price tag of $280 million.

Upon completion of the deal, the property will become Boyd Gaming’s first property in Pennsylvania. The deal is expected to be completed sometime between the middle to later part 2018.

Boyd Gaming’s acquisition of Valley Forge comes less than two months after Pennsylvania passed a wide ranging expansion of gambling that includes online gambling, additional brick and mortar operations as well as daily fantasy sports.

The company has already planted their feet in the regulated online gambling market, which operates the Borgata online casino and poker room in New Jersey. Pennsylvania is expected to become the 4th state to go live with online gambling by the middle of 2018.

Boyd Gaming chief executive Keith Smith said that Boyd has high hopes for the company’s entry into the country’s second largest casino market

“The acquisition of Valley Forge Casino Resort is another excellent opportunity to further grow and diversify our nationwide portfolio. With this acquisition, we will expand into the second-largest gaming state in the country, establishing a presence in a densely populated, high-traffic area just west of Philadelphia.”

Valley Forge Casino shows large growth during 2017

The Valley Forge Casino Resort is located in the Upper Merion Township near King of Prussia. Currently owned by an ownership group that includes investor Ira Lubert, the casino features over 600 slot machines and 50 table games with a table game lineup that includes blackjack, craps, roulette and other games. An additional 250 slot machines are planned for 2018.

The casino opened in March of 2012 and offers guests nearly 500 hotel rooms. They were ranked 11th on the list of top PA casinos during the month of November with over $9.5 million in total gaming revenue with $3.3 million coming from table games, representing an increase of nearly 34%.

Up To 200 Pennsylvania Cities And Towns Have Opted Out Of New Mini Casinos

Pennsylvania mini casinos

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.

Pennsylvania Casino Revenue Slightly Down in October

Pennsylvania online gambling revenue flat

Revenue for Pennsylvania’s twelve brick and mortar casinos was down slightly from last October. During the month, casinos took in $261.9 million from gamblers in the state, down from $263 million last year, representing a 0.4% loss. The downturn over the last year is after PA casinos saw a 3.8% increase during September from the previous year.

While the down month was not particularly significant, Pennsylvania’s recent expansion of online gambling in October will only reinforce the eagerness to roll out Pennsylvania’s major expansion of gambling.

Table games strong, slots continue to weaken

Of the nearly $262 million that was won by Pennsylvania casinos in October, $72.4 of that number comes from table games (for example, blackjack) while $189.5 million was pulled from slot machines. Table games actually held their own with a 1.7% increase over the month while slot gaming revenue was down 1.2%, the 12th such decline over the last 13 months.

During 2016, Pennsylvania casinos won a total $3.2 billion, marking its best year ever. But despite the big month during September, the yearly revenue number represents an increase of just 1.7% since 2012. Overall gaming revenue in Pennsylvania has largely been flat since 2011 with the state hovering around the $3 billion mark.

With the passage of online gambling in Pennsylvania, the state could add another $300 in yearly revenue for casinos. The passage of the bill signed last month also authorizes mini casinos as well as daily fantasy sports and in the future — sports betting legalization.

Pennsylvania winners and losers

Eight of the twelve Pennsylvania casinos saw declines during October with Mohegan Sun Pocono seeing the largest loss (8.92%).

The winners on the month included Monty Airy Casino Resort with a 12.53% gain followed by Lady Lucky Casino at 5.98%, Sands Bethlehem at 3.83% and Parx Casino with a 1.61% increase.

Parx remains the largest casino in Pennsylvania with a 17.3% market share generating $45 million in revenue during October. Parx is followed by Sands with 16.6% market share on approximately $43 million in revenue. Rivers Casino is a distant third with 10.2%, representing $27 million in revenue.

Philadelphia Live! Approval Means More Online Gambling Licenses

Philly Live Casino

The proposed Philadelphia Live! Hotel and Casino has been in a holding pattern the last three years due to legal challenges. But with the passage of HB 271, it is now expected to begin construction next year and finish sometime in 2020.

Why Now?

Since 2014, Philadelphia’s SugarHouse Casino had a major objection to the project, citing Pennsylvania gambling regulations limiting ownership of multiple properties. SugarHouse dropped their lawsuit against Live earlier this month.

Among the many aspects of HB 271 – the bill that will officially many forms of online gambling – the legislation will expedite approval of the long-delayed project

Notably, the repeal of this passage of makes the opposition of SugarHouse Casino a moot point with the removal of this passage:

“No slot machine licensee, its affiliate, intermediary, subsidiary or holding company may possess an ownership or financial interest that is greater than 33.3% of another slot machine licensee or person eligible to apply for a category 1 license, its affiliate, intermediary, subsidiary or holding company.”

Pennsylvania has a lot to gain through the approval as well. The state will receive $50 million from Philly Live in exchange for their lucrative slots license.

What is Philadelphia Live?

Philadelphia Live! is a proposed project owned by Cordish Companies and Greenwood Racing, the same group that launched Maryland Live, a popular casino in that state that started accepting bets in 2013. Philadelphia Live is currently scheduled to go live in South Philadelphia near Lincoln Financial Field, Citizens Bank Park and the Wells Fargo Center.

Other Pennsylvania casinos had balked at Philly Live due to the fact that Watche “Bob” Manoukian owns 85% of the Parx Casinos. Manoukian also would own about a third of the Live! Casino

Live!, which will cost $600 million, is expected to launch in 2020 and feature over 2,000 slots, 30 poker tables and 100 table games. It is anticipated to generate $300 million in gaming revenue annually. It will be located in South Philadelphia

What does Philly Live mean for online gambling in Pennsylvania?

The decision to approve Philadelphia Live has ramifications for online gambling in Pennsylvania as well. Because the passed bill authorizes a number of comprehensive online gambling license equal to the number of brick and mortar casinos in the state, the number of online casinos in the state will also increase by one.

There are currently twelve casinos in Pennsylvania before this bill passed in late October. With the approval of Philadelphia Live!, that number will increase to 13. The 13th license will become official once Philly Live! pays the $50 million for its slot license.

As for which casinos ultimately offer online gambling, it is widely expected that most of the 12 casinos + Philly Live! will apply for some version of the license. The one likely abstainer – Sands Bethlehem – is likely to decline a license. Sands owner Sheldon Adelson has been a vocal opponent – in fact the biggest opponent – to online gambling over the last half decade.

The decline of an online gambling license by Sands Bethlehem will free up a license for a non-Pennsylvania company in early 2018.