Subscribe and get alerts on new PA online gambling sites and bonus codes
A third satellite casino auction will be held Wednesday, February 7th in Harrisburg to determine which land-based property will acquire the rights to build a Category 4 establishment within Pennsylvania.
Although the minimum sale price for each “Round 1” permit is set at $7.5 million, there is ample reason to believe that next week’s winning bid will far exceed that amount. On January 24th, Stadium Casino LLC was awarded a mini casino license near Derry (Westmoreland County) for $40.1 million.
The inaugural January 10th blind auction was a bonafide eye-opener as Hollywood Grantville parent company Penn National defended its market with a $50.1 million haymaker to acquire its own satellite property near the borough of Yoe, in York County.
The field has thinned somewhat now that two winning bidders are blocked from participating in the auction process until late May. However, up to eight Category 4 licenses (which allow 300-750 slot terminals along with 30 table games during Year 1 of operation) are still up for grabs.
Following is a look at who the most likely suitors for the third license are, as well as where those casinos could choose to set up shop. Note that there were four participants in each of the first two auctions, and that all losing bids, their amounts, as well as their locations are safeguarded by the Pennsylvania Gaming Control Board.
Rush Street Gaming (SugarHouse Philadelphia & Rivers Pittsburgh)
Both properties could benefit greatly from a satellite casino location near their existing casinos.
Their preferred locations may have already been taken (the two winning bids so far have blocked off sections southwest of Philadelphia and east of Pittsburgh), but there could still be several desirable locations for Rush Street.
Namely, I-78 near Allentown in Lehigh County and the I-76 Pennsylvania Turnpike region south of Reading within Berks County. Allentown and Reading are the third and fifth largest cities in Pennsylvania, with populations of 120,000 and 88,000 respectively.
Both potential mini casino sites would theoretically cannibalize Penn National’s Hollywood Grantville business while allowing SugarHouse Philadelphia an opportunity to further spread brand awareness of its subsidiary offerings such as Video Gaming Terminals (VGTs) and Poker Night in America telecasts — which attracted more than 10,000 live viewers via Twitch and YouTube in 2017.
A total of 49 municipalities in the two counties have opted-out of hosting a mini casino, according to the PGCB (38 in Berks – 11 in Lehigh), but the region remains wide open since land-based operators are provided with a 15-mile buffer zone from their designated “center point” affidavit when submitting a bid.
Rivers Pittsburgh appears to have two likely options to build its own satellite casino — both along Interstate 79. The first could be located in Fayette County near Miner’s Monument to attract northbound casino-goers from West Virginia, while the second might be western Butler County near Portersville. Only two municipalities in Fayette County have informed the state that they will not allow a Category 4 property, while 19 have done so in Butler County.
Another option east of Pittsburgh was already secured by Stadium Casino LLC with its purchase of a license to build near Derry.
Pinnacle Entertainment & Penn National (The Meadows)
Pinnacle Entertainment is by far the most intriguing potential suitor for an upcoming Category 4 casino license in Pennsylvania.
The Meadows “racino” (operated by Pinnacle) would potentially stand to gain from a mini casino in either Fayette or Butler counties. However, the brick & mortar casino could also submit a bid that favors Penn National’s Hollywood establishment due to a pending $2.8 billion merger that is scheduled to close later this year.
Penn National needs another mini casino location near Allentown and Reading to thwart its competitors’ efforts to capture market share in that region. But whether The Meadows will acquiesce to such a deal (the merger agreement has yet to be completed) remains to be seen.
Greenwood Gaming & Entertainment (Parx Casino)
Parx Casino in Bensalem is still eligible to participate in the satellite casino auction process, despite the fact that its interests may have been served by Stadium Casino LLC’s acquisition of a mini casino license in Westmoreland County outside Pittsburgh (Stadium is a joint venture between The Cordish Companies and Greenwood Gaming).
Indeed, the state’s creation of Category 4 casino licenses is prompting a major shake up in the land-based casino industry while Pennsylvania awaits regulated online gaming infrastructure (which passed late last year) and a US Supreme Court decision that could pave the way for legalized sports betting in the Keystone State.
Las Vegas Sands Corporation (Sands Bethlehem)
Sands Corporation shot-caller Sheldon Adelson is among the most despised individuals in the entire regulated internet gambling space. Online gambling proponents have learned over the years that the casino mogul’s deep pockets are never to be underestimated.
The Sands Bethlehem property is among Category 1 and Category 2 Pennsylvania casinos that can potentially win a mini casino license from the state. A winning February 7th bid by Sands would most likely designate a center point near Allentown and Reading — which would in turn further re-arrange the chess pieces in the bidding process.
Analysis and Conclusion
The February 7th Harrisburg auction for the third mini casino license could again attract four bidders: (a) one representative from Rush Street Gaming, (b) The Meadows, (c) Parx, and (d) Sands.
The third license may be worth significantly less than the previous two, which have already netted the Pennsylvania Gaming Control Board over $90 million in fees for the first month of 2018.
However, the law of diminishing returns might be thrown out the window since there are at least a couple of potential Category 4 sites remaining that could sway customers’ spending habits for years to come.
My estimation is that the February 7th winning bid will be between $25 million and $35 million, with the designated center point near the locations outlined above.
Get Alerts For PA Online Gambling Launches!