Pennsylvania Satellite Casinos Are Not Gaining Interest

Back in 2017, lawmakers in Pennsylvania approved a new plan to significantly expand the state’s gambling options. Under the new laws, 10 new satellite casinos, or mini-casinos, can open in various parts of the state. Unfortunately, these Pennsylvania satellite casinos are failing to gain much interest.

Casino Floor Picture

A recent auction took place for the sixth mini-casino here. Unfortunately, no bidders took part. Let’s take a quick look at why this is.

More Mini-Casinos Are Coming to Pennsylvania

It’s clear that Pennsylvania is looking to cash in on its gambling industry. For more than a year, this state has been actively expanding the number of gambling options available to residents. It all started in 2017 when the state government passed an aggressive new gambling expansion plan.

Initially, the state approved plans for five mini-casinos to open up. Under the expansion plans, land-based casinos already operating in this state can bid to run these mini-casinos. The satellite casinos can hold up to 750 slot games and 40 table games.

Five of these mini-casino licenses have already been handed out. Recently, Pennsylvania lawmakers approved plans to open an additional five satellite casinos. The same regulations apply to these gaming venues. The state’s Gaming Control Board is currently working to auction off these casinos.

Unfortunately, the state is having a difficult time finding bidders for the five additional Pennsylvania satellite casinos. Many casino operators have raised concerns over how profitable these small gambling establishments will be.

Pennsylvania Satellite Casinos Struggle to Find Bidders

This week, the Pennsylvania Gaming Control Board held an auction for the sixth mini-casino. Minimum bids for this casino were set at $7.5 million. It was a failed attempt, as not a single casino operator bid to host this new gaming venue.

There are a few reasons why this is. First, Pennsylvania has set exclusion zones around many of the state’s metropolitan areas. This means that the new mini-casinos can only open in rural areas in Northern Pennsylvania or small cities such as Altoona and Williamsport.

The high tax rates set on casino companies is also pushing casino operators to stay away from the satellite casinos. Joe Weinert, a gambling consultant for Spectrum Gaming Group, recently gave his take on why these new mini-casinos are failing to pique casino operators’ interest.

“You have to look at the constraints posed by the regulating jurisdictions, you have to look at what can be built in what area, what’s the tax rate, what’s the licensing fee and you have to put all those ingredients into a big pot of stew and see whether it’ll turn into a palatable product,” he said. 

Under the expansion plan, the state would cease all auctions if no bidders were interested in opening a sixth mini-casino. Interestingly, House Gaming Oversight Committee Chairman Jim Marshall believes that lawmakers may continue to push for additional Pennsylvania satellite casinos to open. He’s keeping his eye out for any casino operators that express interest in hosting another one of these gaming establishments.

Sports Betting Proves Successful in Pennsylvania

Satellite casinos aren’t the only new addition to Pennsylvania’s gambling industry. Shortly after PASPA was struck down, the state officially legalized sports betting. The Hollywood Casino at Penn National Race Course took the state’s first legal sports bets in mid-November of 2018.

Today, every casino in the state has a fully-functioning sportsbook. There are now several online sportsbooks available here, as well. Fortunately, sports gambling is proving to be an incredibly lucrative industry for the state.

More than $300 million has already been spent on sports bets here. Overall, the state has earned $8,849,233 in sports betting tax revenue. In time, this state’s sports betting revenue may compete with New Jersey and Nevada.

Pennsylvania has even begun to allow online casino gambling. In July, three casinos in this state officially launched their internet casino gambling options. Much like sports betting, the online casino industry is earning the state millions of dollars in revenue already.

Pennsylvania satellite casinos aren’t taking off the way that lawmakers initially anticipated. Make sure to stay tuned for more updates on this state’s gambling laws over the next few months!