On Wednesday, the Pennsylvania Gaming Control Board reviewed bids from an auction for the very first satellite casino license in the state. The Category 4 auction resulted in Penn National Gaming earning the license, winning the auction with a $50.1 million bid.
Operators interested in the satellite casino license had to bid a minimum of $7.5 million in order to even be considered during the auction. The bidding process was expected to be in high numbers, but no one was expecting the massive bid by Penn National.
In their bid, the company announced their plans to locate a mini-casino in the area of Yoe. Penn National has until 4pm today to pay the $50.1 million or their bid will be removed, and the next highest bid will earn the licensing.
It is surprising to find that Penn National is the winner of the mini casino license as they recently filed a lawsuit against the state in regard to the gaming expansion that was recently passed into law. The goal of the company’s lawsuit is to stop the construction of the smaller casinos. In the suit, Penn National is challenging if the provision for mini casinos is constitutionally sound.
In the gaming package, the mini casinos must be located within a 25 mile buffer zone around existing casinos. The company feels that they are at a disadvantage as their Hollywood Casino, located at the Penn National Racecourse, is in a central region of the state and is isolated so the buffer zone does not overlap as it does with other gaming venues. This essentially means that satellite casinos could be located closer to their casino than other casinos in the state.
Because they now hold the first license for satellite gaming, Penn National has first pick when it comes to location of the new venue. This will help the company to find the best spot in which revenues can be generated as well as protect themselves from cannibalization they feel the mini casinos will create for their existing casino.
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