On Wednesday, the Pennsylvania Gaming Control Board hosted an auction to begin the bidding process again for satellite casino licensing. The auction resulted in no bids placed. The auction was the second try by the Board that failed to draw in any bids after the first five auctions brought $127 million to the state in 2018.
Early Auction Success:
The satellite casinos were approved in a massive gambling package back in late 2017. By January 2018, the state began the auctioning process. In the beginning, the bidding was limited to the casino license holders in the state. A minimum of $7.5 million was the required bid to be considered.
The first five auctions were successful, with $127 million earned from the licensing process. By April, the interest had waned, and zero bids were placed. It seems the exclusion zones of the mini casinos played a role in the decision-making process to bid.
The larger metropolitan areas of Pennsylvania were not allowed, so bidders had to consider placing the gaming venues in rural areas and smaller cities.
Joe Weinert, Spectrum Gaming Group executive vice president, stated that he feels the casino owners decided that the potential for revenues as well as cost of licensing plus taxes would not provide the profit they were looking for.
Weinert continued: “You have to look at the constraints posed by the regulating jurisdictions, you have to look at what can be built in what area, what’s the tax rate, what’s the licensing fee and you have to put all those ingredients into a big pot of stew and see whether it’ll turn into a palatable product.”
With the 2017 law, 10 satellite casino licenses were authorized. A license holder can offer as many as 750 slot games and as many as 40 table games. Of the operators that won the bids, Penn National Gaming is currently the closest to opening a venue.
The Gaming Control Board provided approval for Mountainview Thoroughbred Racing Association to start construction on the satellite casino in Morgantown. The group is a subsidiary of Penn National Gaming, with the venue to be located off the Pennsylvania Turnpike.
A total off $111 million will be spent on the project. The casino will be 89,500 square feet in size and will include 750 slots and 30 table games. More table games are anticipated along with a sportsbooks, plus dining and entertainment facilities.