CLOSE

York Dispatch investigative reporter David Weissman on why York County was chosen for Pennsylvania's first "mini-casino." Wochit

LINKEDINCOMMENTMORE

Penn National Gaming successfully bid more than $50 million for the opportunity to place a casino in York County, but a lawsuit it brought against the state could eliminate that opportunity.

Penn National, which operates Hollywood Casino in suburban Harrisburg, submitted its winning bid to the state Gaming Control Board on Wednesday, Jan. 10.

The board is auctioning the rights to 10 new mini-casinos — referred to as Category 4 casinos — as the state government looks for cash to patch up a budget deficit.

The mini-casinos, part of a new gaming expansion law passed last year, can have 750 slot machines, and Penn National plans to pay another $2.5 million to operate 30 table games, according to The Associated Press.

The company filed a federal lawsuit against the state Tuesday, Jan. 9, in an effort to eliminate the potential for these Category 4 casinos, citing a “significant and unique” harm the new law could have on its Harrisburg casino.

More: Penn National sues over Pennsylvania’s casino expansion

Penn National said the law, passed in October, effectively allows competing casino owners to use the new mini-casinos to pick off its relatively far-flung customer base, while the protections in the law are far more adequate for the rest of Pennsylvania’s casino owners.

Defensive strategy: The company's new casino would go inside a 30-mile circle centered on Yoe that encompasses the majority of York County, including York City.

Eric Schippers, a Penn National spokesman, said their bid was made with "one eye toward defense and another toward offense."

If the company's lawsuit prevails, the state will not add any new mini-casinos, and Penn National will go back to operating Hollywood Casino as usual, Schippers said, adding that this is the company's preference.

If the lawsuit fails, their winning bid prevents a competitor from siphoning off part of their business and allows Penn National to potentially expand its market share with more Maryland customers, he said.

"Recognizing that this is the law of the land, we couldn't just sit back and allow our competitors to cannibalize our business," Schippers said.

Penn National now has six months to submit its new casino application, which must include a precise location, according to the gaming control board.

Doug Harbach, a spokesman for the board, said if Penn National does not submit its application within six months, it will forfeit its full $50.1 million bid. If it submits an application that the board denies, the company will be reimbursed 75 percent of its bid amount, he added.

Potential location: The board gave municipalities the option to opt out of potentially hosting a mini-casino, and 38 municipalities in York County, including Yoe, exercised that option.

Sam Snyder, president of the Yoe Borough Council, said their decision was based on the borough's determination that it didn't have enough open space to accommodate such a facility.

Harbach said the municipalities that opted out have one chance to opt back in if they're approached by a developer, but Snyder said he doesn't think the borough will reconsider its decision.

More: Pa. casino regulators hand down record fines

Many other local officials are taking a wait-and-see approach before deciding whether to endorse a casino in the county.

Philip Given, a spokesman for York City Mayor Michael Helfrich, said the mayor has not spoken with any casino developers but he's "willing and excited" to have any conversation about economic development in the city to see if it's the right fit.

York City is one of the municipalities that have did not opt out of the possibility.

Mixed opinions: York County Commissioner Chris Reilly said he could see the potential positives, such as more jobs and increased revenue, and negatives, such as gambling addiction.

He said he questions whether York County is the ideal location for a new casino, but if a local municipality decides it wants one, and it brings in revenue to the county, "it's fine by me."

Likewise, state Rep. Keith Gillespie, R-Hellam Township, said he wants to see a full analysis of the economic benefit versus crime analysis before he throws his support one way or the other.

One group already on board in favor of the mini-casino is the York County Economic Alliance, which fielded questions about this possibility ahead of Wednesday's bid from several casino operators, including Penn National, according to president and CEO Kevin Schreiber.

Schreiber said the alliance plans to help the company look into potential locations.

He said he's excited about the potential for increased tourism and additional investment that such an attraction could bring to the county.

Despite the pending lawsuit, Schippers said Penn National also is looking forward to meeting with interested communities.

— Reach David Weissman at dweissman@yorkdispatch.com or on Twitter at @DispatchDavid.

LINKEDINCOMMENTMORE
Read or Share this story: https://www.yorkdispatch.com/story/money/business/2018/01/10/bid-place-casino-york-county-partly-defensive-strategy-penn-national/1021285001/