Hard-up for money, Pa. again tries selling mini-casino licenses
HARRISBURG — Pennsylvania will again seek to auction a mini-casino license on Sept. 2, under orders from state lawmakers in search of cash for a treasury starved of tax collections from shutdowns to contain the coronavirus.
The Pennsylvania Gaming Control Board on Wednesday scheduled the auction after budget legislation passed in May required it.
Owners of the state’s casinos are eligible to bid, although many of them never bid in seven prior auctions. The bidding is under a 2017 state law to expand gambling, including authorizing auctions of 10 mini-casino licenses that allow the holder to operate up to 750 slot machines and 40 table games.
Bidders must submit a prospective site for the casino that cannot come within 40 miles of another casino location.
Minimum bids are set at $7.5 million, and the state tax rate on casino revenue is among the nation’s highest.
Meanwhile, exclusion zones around the 17 existing and proposed casino sites have rendered Pennsylvania’s largest metropolitan areas off-limits. That leaves bidders with a choice of rural northern Pennsylvania, a stretch along the Ohio border between Pittsburgh and Erie, and a handful of smaller cities, including Altoona, Williamsport and State College.
The state received bids in five auctions in 2018, but interest petered out in the sixth auction and another auction ordered by lawmakers last year drew no bids.
None of the mini-casinos have opened yet and the proposal from one successful bidder, Mount Airy Casino Resort in the Pocono Mountains, was rejected after Mount Airy acknowledged it couldn’t finance the project.
One mini-casino is being built near Reading, along the Pennsylvania Turnpike, while two are sited in southcentral Pennsylvania and another is being built in Westmoreland County, in western Pennsylvania. All told, the state has reaped about $111 million in bids.
With 12 casinos operating, Pennsylvania was the nation’s No. 2 state for commercial casino revenue, behind Nevada, at $3.4 billion in 2019, according to American Gaming Association figures. It was No. 1 in tax revenue from casino gambling last year at $1.5 billion.