PA casino operators say PASS to overpriced casino licenses

casino operators say PASS to overpriced casino licenses

The Pennsylvania Gaming Board Control’s auction of the first of five mini-casinos was canceled on Wednesday after receiving no bids for the overpriced casino licenses.

It was quite an embarrassing moment for the PGCB, which went ahead with the auction, only for it to be closed just 60 seconds later.

Douglas Sherman, the organization’s chief counsel, had invited 13 eligible companies to place an envelope into both the ‘bids’ and ‘locations’ boxes at 10am on the day, yet none came forward.

After a moment of silence, Sherman said: “Having received no responses, the auction is canceled.”

The board’s chairman, David M. Barasch, also canceled any future auctions that were set to take place.

The companies were required to pay a minimum of $7.5 million for one of the satellite gambling outlets, known as Category 4 casinos.

Last year, the Pennsylvania Gaming Control Board made $127.7 million from the sale of five mini-casino licenses.

Three of the licenses have yet to be approved, and neither of the two fully-licensed venues has yet opened.

Regardless, a bill was passed earlier in 2019 to allow for a second auction to test the market demand for more satellite casinos. 

The satellite casinos can contain up to 750 slot machines and 40 table games, but can only be legally operated by one of the state’s 13 licensed companies. These casinos cannot be built within 40 miles of an existing casino or other satellite casino.

This meant that very little unclaimed space was left on which any new potential buyers could bid, apart from sparsely-populated areas of central and northern Pennsylvania.

Pennsylvania’s gambling scene brought in almost $1.4 billion in tax last year.

Mini-casinos were first legalized in 2017 as a way to expand gambling opportunities in the state.

Legalization for them came alongside authorization of sports betting, internet gaming, video gaming terminals in truck stops, and interactive lottery.

The first license was bought by Penn National’s Hollywood Casino Morgantown in Berks County and was approved in June. Penn also won the rights to a location in the York Galleria Mall.

Live! Casino Pittsburgh followed with a license for Westmoreland County, which was approved just last month. Mount Airy Casino Resort won the rights to a casino north of Pittsburgh and Parx Casino in Bensalem will build in Shippensburg.

The market is now, however, completely tapped out. Senate Bill 712 required the state to conduct as many as five auctions but was to stop if no bids were received in any of the rounds.

Auctions were to start on September 4 and conclude no later than December 31.

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