Last year, PA lawmakers not only legalized a host of online gambling verticals, but also gave the state’s land-based slots licensees the chance to expand physically through the purchase of a Category 4 satellite casino license.
Ten permits were originally put up for auction, giving owners the right to build miniature versions of their properties and offer a limited number of slot machines and table games.
The proceedings started off with a bang, but ended with a whimper. While the first license was purchased on January 10 for more than six times the required minimum bid of $7.5 million, interest steadily waned, then bottomed out altogether, leaving the state with five permits unsold.
Even so, regulators did not come away disappointed — the initial five auctions netted the state a tidy $127 million in revenue.
For each auction, a general location was selected, which in a few cases led to a feisty bidding war. After purchasing a license, it was up to each operator to scout the exact location inside that radius where it would build its future mini-casino.
As of October 31, all licensees have now chosen their preferred locations. Once the Pennsylvania Gaming Control Board approves the choices, they can break ground.
Here’s everything we know about satellite casinos and where they will be scattered throughout the Keystone State.
What is a satellite casino?
Satellite casinos were authorized as part of the omnibus gambling bill passed in October 2017, and allow license holders to build branded gambling properties housing between 300-750 slot machines and up to 30 table games.
Ultimately, five of the state’s 10 satellite casino licenses were purchased.
Penn National (Springettsbury Township, York County)
Penn National never wanted a satellite casino, but due to its exposed location, felt forced to get involved — and boy did it get involved.
Penn was initially extremely opposed to mini-casinos, even filing a lawsuit arguing that they would cause “significant and unique” harm to its main Harrisburg location.
But with uncertainty in the air, and feeling geographically susceptible to competitors, the operator decided to create a buffer around its Hollywood Casino mothership, scooping up the first satellite license for an eye-popping $50,100,000.
The lawsuit was subsequently dropped after the successful bid.
The venue was slated to be built somewhere in Yoe, some 50 miles south of Hollywood Casino and 20 miles north of the Maryland border. The purchase was something of a blocking bet, which prevented competitors from choking off traffic to its main property to the north.
While it dropped more than $50 million on its casino license alone, Penn’s choice of location is decidedly unglamorous. In September, the operator filed an application stating its intention to build its mini-casino in a 79,000 square-foot space formerly occupied by Sears at the York Galleria Mall in Springettsbury Township, York County.
The space will be filled with around 500 slot machines and 20 table games, for starters, and will be revamped at a cost of around $70 million.
Penn execs believe that the location is well suited for a casino, with its existing infrastructure and parking presenting several advantages.
Once approved by the PGCB, they estimate construction will take between 12 and 18 months.
Stadium Casino (Hempfield Township, Westmoreland County)
Buoyed by the initial eight-figure shot in the arm, PA officials kicked off the second mini-casino event on January 24, this time auctioning off a permit to build in Derry.
Stadium Casino, a joint venture between The Cordish Companies and Greenwood Gaming & Entertainment (parent company of Parx Casino), snapped up the license for a cool $40,100,005.
But the company might be regretting that now.
Stadium is the developer behind Live! Casino and Hotel, a massive South Philadelphia casino project that is set to be located in close proximity to Lincoln Financial Field, Citizens Bank Park, and the Wells Fargo Center.
All was seemingly well and good with the project, which was estimated to go live as soon as 2020, until recently, when rumors began circulating that the owners were looking for a way to back out.
Before trouble began brewing, however, Stadium Casino dropped a pretty penny for its satellite license. Like Penn National, it plans to house its new casino inside a mall, specifically inside a space formerly occupied by a Bon-Ton department store at Westmoreland Mall in Hempfield Township. The plaza is located in Westmoreland County along Route 30, less than 40 miles east of downtown Pittsburgh.
In a release, Stadium officials boasted the project would create around 600 jobs and generate millions of dollars for the local community. They did not give a firm timetable as to when the facility would open or specify how many slots and table games would be offered.
Mount Airy (Beaver County)
While Penn National was forced to protect its property from cannibalization, Mount Airy had no such concerns. That’s because several of the counties that surround the Mt. Pocono casino had exempted themselves from the satellite casino process, providing a natural buffer zone for Mount Airy.
With this protection in place, the casino decided to go on the offensive, purchasing a mini-casino on the other side of the state, north of Pittsburgh in New Castle.
Mount Airy later applied to build the facility specifically in Beaver County, on a 100-acre parcel of land that it recently purchased. Officials said at the time they hoped to break ground on the project in the fourth quarter of 2018.
The property will max out its allotted gaming terminals and tables, offering 750 slot machines and 30 table games.
In addition to the casino, Mount Airy also plans to build a hotel and convention center on the land. It expects to create 700 jobs total, with 400 of those becoming permanent positions.
Parx Casino (Shippensburg Township)
Parx is the top dog in terms of PA casino revenue, so it wasn’t a shock when the Bensalem property splashed around a little cash to open its own miniature venue.
On February 21, it purchased the fourth satellite casino license on offer, which was slated to be located somewhere in the South Newton Township area.
But Parx wasn’t the original winner of the fourth license. In fact, Sands Bethlehem initially won the auction for $9.9 million, but had its bid invalidated due to its proposed location being too close to Mount Airy’s choice.
As a result, Parx snapped up the license for the bargain price of $8,111,000.
In October, Parx revealed its plan to build on a 10-acre site in Shippensburg Township, just east of the Franklin County line. The building will be situated just off of Interstate 81, located within 25 miles of around 300,000 residents.
Parx had a tough time locking in its mini-casino location, and was eventually forced to settle on Shippensburg, its third choice.
The operator hopes to have the new casino up and running by 2020, and plans to offer 475 slot terminals and 30 table games. Parx officials expect to provide about 100 full-time jobs and generate around $45 million in gross gaming revenue annually.
Penn National (Caernarvon Township, Berks County)
Penn National may have broken the bank to lock in its first satellite casino, but managed to pick up its second for just a hair over the minimum bid of $7,500,000. Keep in mind that Penn, the only PA operator to purchase two Category 4 licenses, originally tried to block the venues all together. If you can’t beat ’em, join ’em, right?
The permit gave authorization for a mini-casino in West Cocalico Township, about 45 miles east of Harrisburg, which, along with its first mini-casino to the south, will help build a wall around the main Penn National property.
Penn has chosen a 36-acre site in Caernarvon Township, Berks County, near the intersections of the Pennsylvania Turnpike, I-176, and the Morgantown Expressway.
The venue, dubbed Hollywood Casino Morgantown, will span 80,000 square feet and feature 750 slot machines and 30 table games. It will also boast a sportsbook and entertainment lounge.
The project is expected to generate 250 new local jobs as well as 275 construction jobs, and is expected to be ready for prime time 18 months following approval by the PGCB.
Apart from protecting its flagship casino from encroaching competitors, Penn National expects the mini-casino to generate new revenue from the densely populated suburbs west of Philadelphia.
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