Regulators Hear Pitches For Satellite Casinos Equipped With Sportsbooks

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A pair of public Pennsylvania casino hearings were held this week for Category 4 licenses, the so-called mini-casinos, or satellite casinos. The projects weren’t given the green light at the meetings, but they were a crucial step in the process to check off.

Pennsylvania passed a law in late 2017 to allow the state’s 12 existing casinos to buy permits to open a maximum of 10 satellite casinos. Five of the 10 licenses were ultimately spoken for, generating $127 million for the Keystone State. Both casinos that were up for discussion this week are pegged for Western Pennsylvania.

The casino hearings, conducted by the Pennsylvania Gaming Control Board, were held in the local communities in which the smaller casinos are planned. The satellite casinos are allowed to have 30-40 tables and 750 slot machines, as well as sports betting, the hottest casino offering in the nation right now.

Pennsylvania currently has just one active sportsbook, at Penn National’s Hollywood Casino located near Harrisburg. Pennsylvania is expected to be one of the largest sports betting markets in the country, so it should be able to support many brick-and-mortar sportsbooks, even with a massive tax rate.

Stadium Casino’s project

On Wednesday morning, the PGCB met in the Hempfield Township Municipal Building in Greensburg to hear details of a $150,000,000 project from Stadium Casino, LLC. The 100,000 square foot property, dubbed simply Live! Casino, would come to the Westmoreland Mall, located about a 30-minute drive from Pittsburgh.

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The mini-casino will be fitted into a space once home to a Bon-Ton department store before it went bankrupt. Stadium said it will have 750 slots, the maximum allowed under law, and 30 tables, along with on-site sports betting. The satellite casinos can have up to 40 tables through an additional regulatory approval.

Stadium, an affiliate of the Cordish Companies (owners of Live! Casino in Maryland), made a winning bid of $40,100,005 for its Category 4 casino in January. Stadium is also in the process of developing a $700 million Category 2 in Philadelphia. Under Pennsylvania law, the Category 2 casinos can be much larger and more closely resemble a Las Vegas casino.

Stadium is eyeing a 2020 opening for the Philadelphia casino, but there have been setbacks over the past several years. For a short period recently, it was rumored that the project was at risk of not coming to fruition. Under PA law, Stadium was able to bid for the Category 4 license despite not having a casino in Pennsylvania. It just needed the license for the Category 2.

At the start of Stadium’s public hearing, it was apparent that the PGCB was a tad frustrated with the status of the Philadelphia casino. As soon as Stadium started to break down its Westmoreland mini-casino project, the PGCB interrupted it to inquire about its other project.

“A week ago, we, the Board gave you a time extension, for the slots at the Category 2,” said regulator Sean Logan. “A week in construction planning is a year long, so has anything changed in that week positive or negative on your 2, whether it’s permits approved or denied.”

The PGCB said that the Philadelphia casino and the Westmoreland mini-casino projects must “run parallel.”

“We continue to prosecute the Category 2, the permits are in the final stages with the city of Philadelphia,” a Stadium representative said. “Every day there is work being done.”

Here’s a brief clip of the hearing (the PGCB said it will be republishing the full video to its website).

Mount Airy project

On Tuesday afternoon, the PGCB met in the social room of the Big Beaver Borough Fire Station #14, located in Darlington. The board gathered testimony on the Category 4 application submitted by Mount Airy #1, LLC, which secured its bid of $21,188,888 for the satellite casino in an early February auction.

The Mount Airy project, located in the borough of Big Beaver north of Pittsburgh near the Ohio border, will also have the maximum number of machines and tables that are legal. It will also have on-site sports wagering, according to the company’s presentation at the hearing. Mount Airy’s main Keystone State casino, the Mount Airy Casino Resort, is located in Eastern Pennsylvania.

Mount Airy is calling its satellite casino Mount Airy Pittsburgh.

If approved by regulators, Mount Airy would build on an undeveloped site near the intersection of the PA Turnpike and the Beaver Valley Expressway. The project, which it hopes to finish in 2020, will also include a hotel and convention center. Stadium didn’t give a construction timeline for its project.

Here’s a look at the hearing:

More local hearings to be held

Regulators have yet to schedule hearings for a project from Mountainview Thoroughbred Racing Association, LLC (Penn National) in Caernarvon Township, as well as Greenwood Gaming and Entertainment Inc. (Parx Casino) in Shippensburg Township.

Last month, the PGCB held a public hearing for gathering information on Mountainview’s proposed Springettsbury Township facility.

The PGCB is authorized to hold additional auctions for companies not licensed for a casino in Pennsylvania to bid for a mini-casino.

State officials are hoping that the new satellite casinos can help grow a flat slot market. Through November, the 12 casinos in the Keystone State generated $2,167,044,769 from their machines, up only 0.86% over the same period in 2017. Pennsylvania receives more than half the winnings in the form of tax revenue.

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Brian Pempus

Brian served as a senior reporter and online content manager for Card Player Magazine for nearly a decade before joining USBets in October 2018. He is currently focused on legal and regulated sports betting and online gaming. He's an avid jiu-jitsu practitioner in his free time.

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