Penn National Pays $50m For First Satellite Casino License
Penn National had the highest bid for a satellite casino license in Pennsylvania, paying $50m.
Yesterday, the Pennsylvania Gaming Control Board reviewed the bids for the first satellite casino license in the state. Surprisingly, it was Penn National Gaming that won, with the company set to pay $50 million after having the highest bid for licensing. Penn National has been openly vocal about being against the gambling expansion in the state, so it is surprising to see that they placed such a high bid and now are the first set to open a new mini casino in the state.
The total amount bid by Penn National Gaming was $50.1 million and this amount won the company the first satellite casino license in Pennsylvania. With the bid, the company announced they plan on placing the new satellite casino near Yoe. The company has until Friday at 4pm to write a check and pay for the bid. If they do not pay up, the bid is thrown out and the next highest bid is the winner of the license.
The price point that Penn National paid is really high, especially if you consider that the price point to get started in the auction was $7.5 million. Companies had to bid at least $7.5m to even be considered. It was expected that bidding might reach the double digit millions but no one was prepared for the high amount that Penn National set forth.
Now that the company has earned the first license, they can build the casino and place it where they like, in the best area to generate the most revenues but also to protect themselves against other mini casinos.
Lawsuit on File
One of the big reasons that everyone is so surprised that Penn National won the licensing is that they recently filed a lawsuit against the state regarding the gambling expansion package that was recently passed into law. In the new lawsuit, the company is challenging the legislation, stating that the provision for satellite gaming is not constitutional.
The suit is questioning the buffer zone that was created based on existing casinos. The new mini casinos cannot be located within a 25 mile radius of an existing property. The satellite casinos must also be placed in an area where the host city has not chosen to opt out.
According to Penn National, the zones are putting them at a disadvantage. The company’s casino in the state is located in Grantville. The Hollywood Casino at Penn National Racecourse is located in the central region of the state. The location is isolated so that the buffer zone is not overlapping as with other casinos in the state, which pushes satellite casinos even further out.
Penn National also pointed out that Mount Airy Casino is located in a region where three counties are off-limits based on the new law. The company feels this is not fair and continues to show they are being treated unfairly.
So as of this week, Penn National gaming has filed a lawsuit against the state and won the first license for satellite casino gaming. It’s an odd turn of events that could prove beneficial to the company in the long run. For now, we wait and see what happens with the lawsuit and perhaps if concessions are made for the company as they try to fight areas of the gaming expansion.
The next auction for satellite casino bidding is set for January 24th. It will certainly be interesting to see just how high the bids are this time around!