slot machines

Pennsylvania’s casinos declined to submit bids for the right to a satellite casino in the state, the state’s Gaming Control Board (PGCB) announced.

The rights auction was the first scheduled by the PGCB thanks to a law that passed earlier this year. Since no company submitted a minimum $7.5 million bid for any of the five remaining licenses in the state, the law dictates that the auction process will end.

In 2017, the state Legislature passed an expanded gaming bill that allowed for up to 10 satellite casinos to be built across the state. The smaller venues allowed gaming companies to operate facilities with 300 to 750 slot machines. They could also pay an additional fee for the right to offer table games.

The lack of bids at Wednesday’s auction may indicate Pennsylvania, the largest U.S. commercial gaming market outside of Nevada, according to the American Gaming Association, has reached its saturation point for casinos. Not including the five satellites, none of which have opened, the state has 13 licensed casinos and racinos. In addition, online casino gaming launched across the state in July.

Wednesday’s auction excluded territory within 40 miles of an existing casino or proposed satellite, as well as jurisdictions that chose not to allow casinos in their communities. As a result, the remaining territory up for bids was in the mostly rural north central part of the state.

Pennsylvania received nearly $127 million from the bids for the five satellite casinos. However, the winning bids dropped dramatically as the auction process continued. In January 2018, Penn National Gaming bid $50.1 million for the right to build a casino near York, where it recently received approval to build one in an abandoned Sears in the York Galleria.

According to Casino.org, company officials said they paid a premium in order to protect the Hollywood Casino at Penn National Race Course near Harrisburg. In April 2018, Penn National paid just $3 above the $7.5 million minimum for the right to build one in Berks County.

Other casinos that won satellite auctions include Stadium Casino, which paid $40.1 million for a facility in Westmoreland County; Mount Airy Casino Resort, which is seeking to build a casino in Beaver County after bidding $21.2 million; and Parx Casino, which is seeking to build its satellite in Cumberland County after an $8.1 million bid.

In addition to slot machines and optional table games, Doug Harbach, PGCB’s communications director, said the satellite casinos can seek licenses for sports betting as well. The license holders may have some flexibility in doing that.

“At this juncture, we read the law as requiring an additional license (for sports betting) at $10 million,” Harbach said. “However, sports wagering can be offered at auxiliary facilities to a casino, namely an off-track betting facility, so casinos that also have a racing license could request from the Horse Racing Commission to transfer an existing or establish a new OTB at their mini-casino site.”