Penn National snares its 4th casino license in Pennsylvania
HARRISBURG, Pa. – Penn National Gaming was the sole and winning bidder on Wednesday for a fifth new mini-casino license authorized by cash-poor Pennsylvania, potentially giving the company a state-leading fourth casino.
Pennsylvania-based Penn National won by submitting a bid just $3 over the $7.5 million minimum. Landing another casino license for a rock-bottom bid is something of a coup for the company after it won the first auction in January with a high bid of just over $50 million.
The company has not picked a specific location yet, Penn National spokesman Eric Schippers said. But the general location Penn National identified to state regulators seems to ensure that it will be built in southern Berks County, either along a section of the Pennsylvania Turnpike, in the city of Reading or its suburbs, where Penn National is headquartered.
Penn National hopes to protect its flagship Hollywood Casino, about 25 miles (40 kilometers) to the west, plus draw patrons from Philadelphia’s heavily populated suburbs and the Reading and Lancaster areas, Schippers said.
A state law passed last year authorizes the Pennsylvania Gaming Control Board to auction the rights to 10 new mini-casinos in an effort to scrounge money for a deficit-strapped state bank account. Each mini-casino can have 750 slot machines and license holders can pay another $2.5 million to operate 30 table games. The four license auctions raised $120 million, including Penn National’s opening $50 million bid.
A Reading-area casino would fit into a gap between central Pennsylvania, where Penn National’s Hollywood Casino draws from a broad area as the only operating casino, and heavily populated southeastern Pennsylvania, where five casinos already compete for business and another casino in Philadelphia is under construction.
The bidding pool widened in Wednesday’s auction because owners of Pennsylvania’s most expansive casino licenses – which allow up to 5,000 slot machines and 250 table games – did not bid on the license in last month’s auction. As a result, the gaming board opened bidding to owners of all casino licenses in Pennsylvania, including two smaller casinos and winners of the first four auction rounds.
With 18 licenses and 12 casinos operating, Pennsylvania is the nation’s No. 2 state for commercial casino gross revenues, second to Nevada. At $1.4 billion in the most recent fiscal year, it already rakes in more tax revenue from casino gambling than any other state.