Pennsylvania casinos paid $127.7 million last year for five satellite casino licenses, and the first one is set to open next year. But state lawmakers are apparently still hungry for more license fees, and Pennsylvania is about to test the market again for the so-called mini-casinos.
The Pennsylvania Gaming Control Board on Wednesday approved a motion directing executive director Kevin F. O’Toole to set up auctions beginning Sept. 4 for the satellite gambling outlets, also known as Category 4 casinos. Only the state’s 13 licensed casinos can build satellite casinos, which can contain up to 750 slot machines and up to 40 table games.
The board’s action is in response to legislation approved last month that requires the state to conduct as many as five rounds of bidding for the licenses, starting no later than Sept. 4 and concluding by Dec. 31. If no bids are received in any rounds, the auction process will conclude.
It’s not entirely clear the state’s 13 casinos are demanding to build more mini-casinos. The casinos paid dearly for the five licenses last year, with winning bids starting at $50.1 million for one license and ending with a bid of $7.5 million, the minimum allowed, indicating a diminishing interest.
The state in June formally approved the first satellite casino license for the Hollywood Casino Morgantown in Berks County, so there is no experience yet on how much customer demand actually exists for the new facilities.
Penn National won bids to build two satellite casinos — one in Morgantown, and the other in the York Galleria Mall. Stadium Casino LLC, whose flagship Live! Hotel & Casino Philadelphia is under construction, will build a mini-casino in the Westmoreland Mall outside of Pittsburgh. Mount Airy Casino Resort won the rights to place a satellite casino north of Pittsburgh. And Parx Casino in Bensalem plans to build a satellite casino in Shippensburg, just off I-81.
The directive for the new satellite casino auctions was included in Senate Bill 712, a hodgepodge of spending and revenue amendments to the fiscal code that Gov. Tom Wolf signed into law on June 28 as Act 20.
The law specifies that the new casinos can be built no closer than 40 miles to an existing casino or satellite casino, a larger buffer than the 25-mile cushion around existing facilities. The law still bans new casinos in Wayne, Pike, and Carbon Counties, providing the Mount Airy Casino with some protection from competition. And more than 1,000 of the state’s 2,500 municipalities opted out of hosting mini-casinos.
Accounting for the larger buffer zones, and the towns that have opted out, there is precious little of the populated parts of Pennsylvania still available to a casino operator, outside of Altoona, several townships near State College, and the Lycoming Mall near Williamsport. Almost everything east of the Susquehanna River and in western Pennsylvania is off limits, according to a map compiled by the Inquirer.
The mini-casinos are unique to Pennsylvania, which authorized them in a 2017 law that dramatically expanded gambling opportunities in the state, including authorizing sports betting, internet gaming, video gaming terminals in truck stops, and interactive lottery.