The remaining six auctions run bi-weekly

Pennsylvania: Parx wins fouth mini-casino auction

The location of South Newton selected by the operators of Parx Casinos does not intrude upon any other zone already reserved.
2018-02-23
Reading time 2:57 min
Following the invalidation of Sands Bethworks' winning USD 9.9 M bid Wednesday, the state's Gaming Control Board on Thursday announced the operator of Parx Casino in Bucks County as the winner of the fourth auction.

As disclosed by The Morning Call, the state had a special mini-casino auction Thursday, after the winning $9.9 million bid of Sands Bethworks Gaming LLC was invalidated a day earlier. The location selected by the company in western Pennsylvania was too close to another prospective site, so the Pennsylvania Gaming Control Board on Thursday announced the operator of Parx Casino in Bucks County as the winner of the fourth auction.

Greenwood Gaming and Entertainment Inc. bid $8.1 million and selected the coordinates of South Newton Township, Cumberland County, for its planned mini-casino, reserving a 15-mile radius around that spot where it can build a satellite parlor, with up to 750 slot machines and, after an additional fee, 30 table games initially.

While Sands’ bid was invalidated Wednesday, the company is still eligible for upcoming auctions.

The remaining six auctions run bi-weekly, from March 7 to May 16, and the state’s racetrack and standalone casino operators have first dibs on the new licenses before the process is opened to the state’s two resort casinos, previous auction winners and other qualified entities.

Through four auctions, the winning bids have totaled about $119.5 million. Greenwood has until 4 p.m. Monday to pay its bid amount and must submit its application, which includes the mini-casino’s exact site, building plans and employment projections, to the state within six months.

Despite the hiccup Wednesday, the mini-casino auctions thus far have surpassed financial expectations.

The gambling expansion law estimated $100 million could be generated if all 10 slot and table games licenses were sold at the minimum asking price of $7.5 million and $2.5 million, respectively.

In terms of Parx’s selected location of South Newton, it doesn’t intrude upon any other zone already reserved.

South Newton is about 45 linear miles from Hollywood Casino at Penn National Race Course in Dauphin County, and roughly 42 linear miles from the York County location Penn National reserved in the first mini-casino auction with a bid of $50.1 million. Its location, however, is only about an hour from the Maryland border and has the potential to take some business from Penn National’s existing casino and its planned mini-casino.

Eric Schippers, Penn National’s senior vice president for public affairs, said the company wasn’t surprised by the selection of a Cumberland County location. Penn National, however, is not planning to publicly weigh in on the potential impact of each planned mini-casino until the company knows the exact locations, size and scope of the proposed satellite parlors.

While Schippers wouldn’t address potential cannibalization on Thursday, the company did file a federal lawsuit in January claiming the gambling expansion law leaves its Harrisburg-area casino uniquely vulnerable to the poaching of its customers by new “mini-casinos.” One of the law’s provisions prohibits mini-casinos from locating within a 25-mile radius of an existing casino, a buffer Penn National argues is insufficient to protect its Hollywood Casino because the facility is isolated in the middle of the state. Its fight in federal court continues.

But in the meantime, Penn National hedged its bets and spent big in the first mini-casino auction, selecting a 15-mile radius centered on Yoe, York County, to protect Hollywood’s customer base to the south and also draw in new consumers from Maryland.

The second and third auctions, meanwhile, led to the selections of locations in western Pennsylvania, which will heat up that market and compete with some facilities in Northeast Ohio.

In the second auction, held Jan. 24, Stadium Casino LLC won with a bid of $40.1 million for a facility near Greensburg, Westmoreland County, a location that will allow it to compete for the Pittsburgh market. Stadium Casino is a joint venture between The Cordish Cos. and Greenwood.

Then, in the third auction, the operator of Mount Airy Casino Resort in Monroe County won with a bid of nearly $21.2 million and selected a location of New Castle, Lawrence County, which shares a border with Ohio and has been trying to lure a casino for about 14 years.

The location Sands selected Wednesday was Hempfield Township, Mercer County, which is the reason Sands’ winning bid was invalidated. New Castle and Hempfield are less than 30 linear miles apart, meaning the 15-mile zone Sands wanted to claim overlapped with one already claimed by Mount Airy, in violation of provisions in the gambling expansion law signed last year.

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