Pennsylvania Online Gambling Bill Clears Two Senate Committee Votes

Pennsylvania Gets No Bids in Latest Mini-Casino Auction

No more interest, no more auctions

The Pennsylvania Gaming Control Board (PGCB) announced that it received no bids for Category 4 casinos on Wednesday, September 4th. Because there were no takers for what have also been called “mini-casinos,” there will be no more auctions.

When the Pennsylvania gambling expansion bill was passed in October 2017, part of it included the authorization of up to ten mini-casinos. These venues can have 300-750 slot machines and as many as 30 table games. Live auctions for the right to apply for mini-casino licenses began in January 2018. The minimum bid for one of these Category 4 licenses was $7.5 million; in order to be approved for up to 30 table games, another $2.5 million must be ponied up.

“Per Act 20 of 2019 (“Act”), the Board was to conduct up to five auctions for the remaining Category 4 Slot Machine Licenses,” the PGCB said in a press release. “Bidders could only be current holders of Pennsylvania casino licenses. The Act also directed that no further auctions are to be conducted if an auction fails to generate a bid.”

Pennsylvania StampBidding process

Initially, the Category 4 casino bidding was open only to Category 1 and 2 license holders. These included the ten racinos and stand-alone casinos in Pennsylvania, plus the Philly Live! casino project that is under construction. Bidding was later opened up to the two Category 3 resort casinos, as well.

When the casinos submitted bids for mini-casinos, they handed in two envelopes: one with the dollar amount and one with the location, noted as map coordinates. The reason for the extreme specificity in location is that there are rules as to where the mini-casinos can be. They cannot be within 25 miles of a Category 1, 2, or 3 casino. They cannot be within 15 miles of a Category 4 casino. And they cannot be in a municipality that has opted out of having a casino. The PGCB has published a map of the state with outlawed radii and opted-out municipalities marked in order to help bidders.

Half of the ten authorized mini-casino licenses received successful bids.

Auction history

The first winning bid was submitted by Mountainview Thoroughbred Racing Association, LLC (Hollywood Casino, owned by Penn National) on January 10th, 2018, for a location in York, Pennsylvania. Mountainview beat out three other bidders with a staggering $50,100,000 price. As one would expect, there was strategy involved with the location. It is about 50 miles south of Hollywood Casino and 20 miles north of Maryland, giving Hollywood a sizeable buffer territory.

Less than two weeks later, Stadium Casinos LLC (the under-construction Philly Live! Casino), won a mini-casino spot for $40,100,005.

On February 8th, 2018 Mount Airy Casino bid $21,888,888.88 (these bids are getting more creative) for a Category 4 casino in Big Beaver, Pennsylvania, just 30 minutes from Youngstown, Ohio.

The bidding process for the fourth Category 4 casino was hilarious. Greenwood Gaming and Entertainment, Inc. (Parx Casino) nabbed a Shippensburg location with a bid of $8,111,000. Sands Bethworks Gaming, LLC, owned by Sheldon Adelson’s Las Vegas Sands Corp., had originally won the auction with a $9,885,000 bid, but because Sands didn’t know what it was doing, it had its bid thrown out by the PGCB.

The coordinates that Sands submitted overlapped with the 15-mile radius claimed by Mount Airy for its mini-casino. Normally, I’m not really one for schadenfreude, but as readers of this site well know, Sheldon Adelson has made it his mission to destroy online gambling in the United States because he is scared of competition for his brick-and-mortar gambling empire. To see his company operate with incompetence is wonderful.

Of course, Sands no longer has any presence in Pennsylvania, as it sold the Sands Bethlehem casino to Wind Creek Hospitality last year for $1.3 billion. The deal closed this May and the rebranding to Wind Creek is just about complete. So I suppose that Sands wouldn’t have even had the mini-casino anymore, anyway (it would have been odd for the company to keep it while selling Sands Bethlehem). The screw-up was still funny, though.

The fifth mini-casino bid was won by Hollywood Casino on April 4th, 2019 for just three dollars more than the minimum bid. It was the only bid. This gives Hollywood two Category 4 casinos in Pennsylvania.

In all, the Pennsylvania Gaming Control Board brought in $127 million from the five winning bids. It says that two projects have been approved to begin construction: the second Hollywood Casino project for a location in Caernarvon Township and Stadium Casino’s mini-casino in Hempfield Township.

Hollywood Casino’s application for its first bid, along with Mount Airy’s and Parx Casino’s applications for Category 4 casinos, are still under review by the Control Board.

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