Pennsylvania Moves Forward On Mini-Casinos—Penn National Lays Out Its Plans

Penn National laid out plans for its second mini-casino to the PGCB and the public

Penn National explained its plans for a new mini-casino in Morgantown, Pennsylvania this week. The company presented to the Pennsylvania Gaming Control Board and interested members of the public at an open meeting in the township of Caernarvon.

The new gambling laws passed in 2017 opened up an auction process for new so-called mini-casino licences. Penn National bid $50.1 million to build a mini-casino in the borough of Yoe. That was an outlier bid because Penn wanted to make sure no other casino won the location. The Morgantown licence was acquired for a much lower price of $7.5 million.

The mini-casinos are restricted in how many slots and other games they are allowed to offer. Penn plans to fill its Morgantown property with the maximum permissible; 750 slots and 40 tables. The company will also take advantage of the new laws allowing sports betting and create a sportsbook for the location.

Penn National has a home field advantage

During the presentation to the PGCB, Penn National played the “local boy made good” card. It explained to the PGCB that it was the only publicly quoted gambling company with a headquarters in Pennsylvania.

The company was founded in 1968 after Pennsylvania first introduced a law allowing thoroughbred horse racing. Today Penn National boasts 30,000 employees and 42 properties in 18 separate gaming jurisdictions.

Hollywood Casino at Penn National Race Course was the first in the state to offer sports betting when it opened its new sportsbook last November.

The new mini-casino will be built near the intersection of the Pennsylvania Turnpike, I-176, and the Morgantown Expressway. Scheduled opening date is late in 2020, and it will employ around 250 full time staff. Penn’s total investment for the property will come in at $111 million.

Ironically, the Yoe mini-casino where the license cost $50 million will get a smaller investment of $70 million.

CasiNO! Public opposition more organized than usual

Penn National’s plans may meet with the regulator’s approval, but at the public meeting the opposition turned out in force. Sporting “casino badges” there was a large contingent of local citizens fighting against the new mini-casino.

PGCB spokesman Doug Harbach said that the opposition was more organized than that at other casino expansion hearings.

Online gambling not due until July 2019

Although the new Pennsylvania laws allow for online gaming, none has launched so far. The PGCB expects online to begin sometime after July 1. The reason for the delay is the new DOJ opinion on the Wire Act.

The PGCB wrote to all its licencees cautioning them to keep their internet operations within the state’s borders. The major casinos, including Penn National had planned to use game servers based outside the state, as explicitly allowed in the Pennsylvania law.

The uncertainty created by the DOJ opinion means that all game servers will now be set up inside the casinos to avoid any legal risks.

Joss Wood 07 Mar 2019 View more

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