Pennsylvania’s third mini-casino license auctioned for $21.2m

TAGs: mount airy casino resort, penn national gaming, Pennsylvania

pennsylvania-satellite-casino-auctionPennsylvania’s third satellite casino license auction brought in significantly less money than the first two but you don’t hear the state government complaining.

Pennsylvania’s third Category 4 casino license auction was supposed to go down on Wednesday, but inclement weather forced the state to postpone the festivities for 24 hours. Three bids were received, with the operator of the Mount Airy Casino Resort in Monroe County coming out on top with a winning bid of just under $21.2m.

That sum is lower than the $40.1m paid by Stadium Gaming LLP two weeks ago, which was itself lower than the $50.1m that Penn National Gaming (PNG) paid for the state’s first Cat 4 auction last month. Regardless, with seven more licenses still up for grabs, the state has now earned $111.4m, significantly more than the $67.5m the state booked as potential revenue from the Cat 4 program this year.

Mount Airy has chosen the city of New Castle in Lawrence County as the site of its new satellite venue, which will boast somewhere between 300 and 750 slot machines, plus up to 30 gaming tables for an addition license fee of $2.5m.

Meanwhile, the state’s attorney general has responded to the federal lawsuit PNG filed last month, which claimed the satellite casino portion of the state’s gambling expansion legislation was unconstitutional.

PNG’s lawsuit is based on its argument that the geographic location of its Hollywood Casino at Penn National Race Course meant that the company stands to lose much more than the state’s other casino operators from the satellite casinos, which can’t be built within a 25-mile buffer zone of an existing land-based casino.

Since many of these casinos are clustered in certain portions of the state, their overlapping buffer zones create what PNG calls a “mega cluster” that shields these operators from further competition. Meanwhile, most Hollywood Casino customers already come from outside its 25-mile buffer, leaving it unduly afflicted by the new venues.

On Tuesday, Pennsylvania’s Office of Attorney General filed papers asking a federal judge to dismiss PNG’s suit based on the fact that PNG had failed to demonstrate that it had been “intentionally treated differently than other casinos.”

As quoted by Law360, the state further argued that these ‘clustered’ casinos already faced more competition than Hollywood, and since many of these other casinos were close to the state border – beyond which the buffers don’t extend – they faced additional competition from out-of-state gaming venues.

PNG claims the Cat 4 licenses will cost Hollywood Casino around $34m in annual revenue. While the company did participate in the first auction, its intention was more about blocking other operators from horning in on Hollywood’s turf.


views and opinions expressed are those of the author and do not necessarily reflect those of