After winning the auction for the 4th mini casino license in Pennsylvania, Sands Casino Resort Bethlehem has now seen their bid invalidated.
In Pennsylvania, a gaming reform package approved last year has already led to many changes within the gaming industry. One such change is the creation of satellite casinos, or mini casino gaming venues. The state has the ability to create as many as ten such venues and operators have already been working to obtain licensing. In Pennsylvania, the Gaming Control Board has been hosting auctions twice a month since January to provide licensing for satellite casinos. The first three have already been claimed. Sands Casino Resort Bethlehem seemed to have earned the fourth license, only to have their bid invalidated later on.
The Sands Casino Resort Bethlehem won the auction yesterday with a bid of close to $9.9 million. The bid was just able to inch past a competing offer and give the brand the satellite casino license. However, later on that day, the casino operator was told their bid was invalidated.
The actual bid was not the problem. Casino operators have to bid $7.5 million to be considered for licensing. Sands bid over that amount. However, they selected the Hempfield Township of Mercer County as their choice for the location of the gaming venue. The location choice reserves a 15 mile radius around the location per regulations for the new gaming venues.
The problem is that the location intrudes upon a zone that was reserved by the Mount Airy Resort when their parent company was able to secure a satellite gaming license a few weeks ago. On February 8th, Mount Airy #1 LLC obtained licensing after bidding close to $21.2 million. They selected an area in New Castle, of Lawrence County.
New Castle and Hempfield are less than 30 linear miles apart, but the 15 mile reserved zone set by the Sands Casino would overlapped where Mount Airy had already claimed. This violated the provisions of the gambling expansion law and caused the board to invalidate the bid.
Earlier in the day, officials of the Sands had stated they were excited to be working with the state on the new project. They have yet to comment on the invalidation of their bid.
What Happens Next?
Now that the bid by the Sands has been invalidated, the Executive Director of the Gaming Board, Kevin O’Toole, will be considering if the other bidder from this week will be named the winner. Greenwood Gaming and Entertainment Inc. was the operator of the Parx Casino that would be given the license if the board chooses to do so.
According to the board, the Sands is still eligible to bid again in upcoming auctions. March, April and May will include two auctions each to see all ten licenses bid upon.
So far, the state has been able to earn almost $111.4 million with the auctions that have taken place. It was estimated that the bidding process for all ten casino licenses would bring $100 million to the state. That number has already been surpassed and if the bids continue as they have been, the state could reach the $150 million to $200 million mark.
The amount of each bid has dropped drastically with each auction. The first auction brought the state $50.1 million while the second was just a little less at $40.1 million. It will be interesting to see how the Board rules in this case and if Sands will try again for a satellite casino license after his little debacle.