The auction for Pennsylvania’s ‘mini-casino’ licenses lasted all of 60 seconds

The new casinos can be built no closer than 40 miles to an existing casino or satellite casino, leaving very little unclaimed territory left in Pennsylvania where potential bidders could locate a new casino, except for some sparsely-populated areas of central and northern Pennsylvania.

(FOR USE AS DESIRED) The SugarHouse Casino photographed July 25, 2019. Keywords: rebranded Rivers Casino Philadelphia Rush Street Gaming state regulators Fishtown waterfront Delaware Avenue Jack Frost Sugar refinery Shackamaxon Street gaming hall online sports betting sportsbook legalize PlaySugarHouse.comRead moreTOM GRALISH / Staff Photographer

by Andrew Maykuth

Published Sept. 4, 2019, 11:12 a.m. ET

When presented with a long-shot bet, Pennsylvania’s casinos apparently know what to do with their money.

At a legislatively mandated auction for a new mini-casino license on Wednesday, none of the state’s 13 casinos stepped forward to pay a minimum of $7.5 million for a satellite gambling outlet, also known as a Category 4 casino.

The Pennsylvania Gaming Control Board last year generated $127.7 million from the sale of five mini-casino licenses. The board has formally approved only two of the licenses so far, and none of the facilities has opened yet. But the legislature this year passed a law ordering the board to conduct another round of auctions to test the market anew for satellite casinos.

It’s now official: The market for new casino licenses in Pennsylvania is tapped out.

An Expansive Area Off-Limits to Mini-Casinos

Legislation prohibits new gambling halls within 40 miles of an existing casino or mini-casino. Many municipalities have also chosen to prohibit the construction of new casinos. The exclusion zones from these factors blanket all of the southeastern and southwestern parts of the state, and most of south-central Pennsylvania.

Existing or licensed

casino

Approved sites

for mini-casinos

Areas prohibited

to future

mini-casinos

Mini-casinos

allowed

MILES

Presque

Isle Downs

Mohegan Sun

Mount Airy

Mount Airy Pittsburgh

476

Sands

Hollywood Casino

at Penn National

Rivers

Hollywood

Casino

Morgantown

Live! Casino

Meadows

Parx

Valley

Forge

Parx Shippensburg

Sugar

House

Hollywood

Casino York

Lady Luck Casino

Nemacolin

Live!

Phila.

Harrah’s

Existing or licensed

casino

Approved sites

for mini-casinos

Areas prohibited

to future

mini-casinos

Mini-casinos

allowed

JOHN DUCHNESKIE / Staff Artist

The auction was over in less than 60 seconds. With no interest from bidders, David M. Barasch, the board’s chairman, canceled further auctions.

Only the state’s 13 licensed casinos can build satellite casinos, which can contain as many as 750 slot machines and as many as 40 table games.

The auction was held in response to legislation approved this year that required the state to conduct as many as five rounds of bidding for the licenses, starting no later than Sept. 4 and concluding by Dec. 31. If no bids are received in any rounds, the auction process will conclude.

The law specifies that the new casinos can be built no closer than 40 miles to an existing casino or satellite casino, leaving very little unclaimed territory left in Pennsylvania where potential bidders could locate a new casino, except for some sparsely populated areas of central and northern Pennsylvania. More than 1,000 of the state’s 2,500 municipalities opted out of hosting mini-casinos.

The mini-casinos are unique to Pennsylvania, which authorized them in a 2017 law that dramatically expanded gambling opportunities in the state, including authorizing sports betting, internet gaming, video gaming terminals in truck stops, and interactive lottery.

The state in June formally approved the first satellite casino license for Penn National’s Hollywood Casino Morgantown in Berks County, and last month approved the Live! Casino Pittsburgh in Westmoreland County. The Westmoreland site will be operated by Stadium Casino LLC, whose flagship Live! Casino & Hotel Philadelphia is under construction at 900 Packer Ave. in Philadelphia.

Penn National also won the rights to build a second mini-casino in the York Galleria Mall, Mount Airy Casino Resort won the rights to place a satellite casino north of Pittsburgh, and Parx Casino in Bensalem plans to build a satellite casino in Shippensburg, just off I-81.

The directive for the new satellite casino auctions was included in Senate Bill 712, a hodgepodge of spending and revenue amendments to the fiscal code that Gov. Tom Wolf signed into law on June 28 as Act 20.