Pennsylvania Tweaks Laws to Lure Bidders at Mini-Casino Auction
The Pennsylvania Gaming Control Board plans to re-auction mini-casino licenses, following a no-show at its previous attempt last year. The authorities set the reserve at $7.5 million for bidders willing to setup satellite gaming zones in the state. Pennsylvania has 13 licensed casinos currently in operation. However, the bid failed to generate interest due to numerous obscure clauses plaguing the legislation.
Governor Tom Wolf recently signed a clause updating regulations in a fresh bid to attract funding, leading experts to believe this year’s auction will lure bidders. This might seem like a long shot judging at face value, considering Pennsylvania does not operate a single satellite casino. Moreover, the recent global pandemic has massively affected casino revenue.
The Need for Reauction
Last year’s auction was for a Category 4 casino license, which allows the owner to operate a gaming facility similar to casinos but on a smaller scale. By doing away with the age-old norms, the Government plans to infuse a fresh lease of life into the State coffers, opening the Pennsylvanian market to mini-casinos.
Among the notable casino operators in Pennsylvania, Baltimore-based real estate and entertainment group Cordish Cos. has shown interest in bidding for the mini-casino license this year. The group, which is busy constructing a full-scale casino resort right next to Philadelphia’s sports stadiums on Packer Avenue, is yet to disclose the location of the proposed mini-casino.
Under current Pennsylvanian law, existing casinos and satellite properties are protected by a 40-mile buffer zone from new establishments. As a result, available properties remain far-fetched and in lightly populated areas across the northern, central, and western parts of the state.
The extent of Changes This Year
Cordish won’t have it easy at the auction, however, as the new law allows existing principal investors in any of Pennsylvania’s 13 casinos to bid on the new license. This allows the dozens of investors deemed casino owners by the State to participate in the bidding process.
Rumors suggest Philadelphia-based Ira M. Lubert, the former owner of the Valley Forge Casino Resort in King of Prussia, is in on the race. Lubert sold the Valley Forge to Nevada-based Boyd Gaming Corp. back in 2018 for $280 million. However, he owns 3% stakes at the Rivers Casino in Pittsburg and is still named a principal investor in Valley Forge by the gaming board, automatically entering his name for the auction.
Category 4 casino licenses are unique to Pennsylvania and introduced in 2017 as a part of the State’s initiative to promote gambling, including sports betting, arcade, and online gaming. Satellite casinos are allowed to operate up to 750 slot machines and 40 table games. A paltry figure compared to the 3,200 slot machines and 198 table games currently operational at Bensalem’s Parx, Pennsylvania’s largest casino.
According to the latest amendment, the 40-mile buffer zone isn’t relevant, opening up 1,000 of the state’s nearly 2,500 municipalities to potential mini-casino operators. The valuation of prime properties in populated areas is expected to rise shortly.