Penn National No Longer Suing Mini Casino Licensing Process

Penn National GamingPenn National has dropped their lawsuit against the Pennsylvania Gaming Control Board and Governor involving mini casino licensing.

In the fall of 2017, Pennsylvania lawmakers passed a gaming package that will see many changes coming to the gambling industry of the state. Included in the mix are satellite casinos, or mini casinos. These smaller gaming venues can be created by land-based operators in the state who are approved for a Category 4 casino license via a bidding process. Since the first of the year, the licensing process has taken place with several venues receiving a license, including Penn National. Operator of the Hollywood Casino, Penn National decided to sue the state Gaming Control Board and Governor Tom Wolf, stating that the new casino gaming option would harm their already existing business. The company has now withdrawn their lawsuit.

Changing their tune

Penn National was the first to win a Category 4 license in the state, having bid a whopping $50.1 million in January. The company wanted to secure a gaming license as there were only so many on offer, one per operator that already offers land-based services in the state. The company went on to secure a second license once the process was opened up to those who had already been given approval for a mini casino.

All the while, Penn National had a lawsuit in progress to sue the state based on the fact that they felt the new mini casinos would be harmful to their business. In the case, the company alleged that the new casino licensing provisions should be blocked as they treat existing operators unfairly and use language that is unconstitutional.

The Penn National venue would be in a worse position in comparison to other casinos when mini casinos are to be created. The Hollywood Casino at Penn National Racecourse is basically on its on the region of the state where it is located. Mini casinos cannot be constructed within a certain mile marker point of existing gaming venues. Other casinos are located near other venues, so the area in which mini casinos can be created is further from these sites, making for less competition. However, Hollywood is on its own, so mini casinos could be constructed that would not be as far away.

Dropping the Lawsuit

In the decision to drop the lawsuit, Eric Schippers, a spokesman for Penn National, stated that the company made a business decision to withdraw the lawsuits and while they continue to believe that their arguments have merit, they have chosen to focus their efforts on developing the two new mini casinos instead, avoiding a long and expensive legal battle.

The goal of Penn National in obtaining the Category 4 licensing was a defense mechanism as they were working to protect their investment at the Hollywood Casino from new competition and being on the offense by penetrating more deeply into the populous market areas in the south and eastern region of the gaming venue to drive incremental value to shareholders.

The process of seeing the mini casinos come to fruition has been slow going. With Penn National now dropping their lawsuit and focusing efforts on their smaller venues, we may seem this brand be the first to launch a satellite casino in the state. Other companies have received licensing but are behind on getting the ball rolling to start services. Mount Airy is one such company that has licensing but is not ready to get started. The company recently asked for an extension to reveal their plans for the mini venue to the Gaming Control Board and were granted until October to do so.