Penn National Gaming officials are hoping sportsbooks at two mini-casinos to open late this year will bolster betting on horse racing as well as the overall bottom line for the new satellites in Berks and York counties.
That’s because the company’s Hollywood Casino at Penn National Race Course intends to move OTB parlors now located in Lancaster and York into the mini-casinos.
The Pennsylvania Gaming Control Board on Wednesday morning approved certificates for the sportsbooks, which are permitted in OTB locations of racetrack casino operators. Parx Casino already added sports betting at its two Philadelphia area OTB sites, and Mohegan Sun Pocono intends to do so at its Lehigh County location.
Penn National track has seen crossover benefits
Adrian King, a lawyer representing Hollywood Casino, told the board that the sportsbook that opened there in November 2018 has had crossover appeal that has benefited the racing side of operations.
Whereas the racetrack in Grantville experienced a decline in racing handle of 10% in 2017 and 9% in 2018, it was able to soften that to a decline of just 0.4% in the year since the sportsbook opened, King said. He noted that the racing handle nationally had declined 2% last year.
“What we were able to do is stabilize the racing handle at Grantville, and we anticipate a similar uptick in the new locations,” King said. Some of the same patrons who bet on sports can be drawn to race wagering, just as they are also known to have a spill-over effect boosting table games play.
While not all mini-casino visitors will be betting on sports and/or racing, King noted the new operations could draw 1 million visitors a year instead of the 50,000 annually that is more typical of the standalone OTB sites.
The mini-casinos, which can have up to 750 slot machines and 30 tables initially, were permitted as part of the state’s 2017 wide-ranging gambling expansion legislation.
Existing casinos had the chance to bid for rights to them at auction, and Penn National did so in order to protect Hollywood Casino’s turf in central Pennsylvania from encroachment by competitors.
King said Hollywood Casino Morgantown near the Pennsylvania Turnpike in Berks County is on track for a November opening. Hollywood Casino York, being developed in a former Sears store at York Galleria Mall, could open its doors in December.
Ruling still awaited on other mini-casino’s fee
The 2017 legislation authorizing sports betting, with a $10 million license fee for casinos that wanted sportsbooks, enabled racetrack casinos to avoid any additional fee when providing sportsbooks at OTB sites, including those in the mini-casinos.
That legislation was silent about granting any such waiver to non-racetrack casinos, which don’t have OTBs. That has become a sticky issue for the gaming board and the mini-casino sportsbook application it has pending from Stadium Casino LLC for its Westmoreland Mall location in suburban Pittsburgh.
Stadium Casino LLC, which is also developing the Philadelphia Live! property, told the board at an Oct. 30 hearing that it would be economically unfeasible to pay a separate $10 million fee for a mini-casino sportsbook. Stadium Casino officials said the size of the facility and its potential revenue does not justify it, and it would create an uneven playing field with competitors like the Hollywood mini-casinos that can bypass the additional fee.
The board has yet to act on the request to waive the fee at the Westmoreland Mall mini-casino, but the issue came up in questioning of King about whether Penn National and Hollywood Casino would be able and willing to pay such a fee if it were required.
His response, alluding to how sportsbooks are a useful amenity but don’t directly generate a lot of revenue, showed sympathy for Stadium Casino’s plight.
“It would not be worth it,” King told the board. “As I have been advised by the financial folks, the juice is not worth the squeeze.”