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Penn National wins second mini-casino license for $7.5M

Hollywood Casino owner eyeing Lancaster/Berks border

After plunking down more than $50 million for the first mini-casino license awarded in Pennsylvania, Penn National Gaming today bid just above the $7.5 million minimum to win its second mini-casino license.

Wyomissing-based Penn National, the owner of Hollywood Casino at Penn National Race Course in East Hanover Township, is looking to build a casino within a 15-mile radius of West Cocalico Township in northern Lancaster County, near the Berks County border.

Penn National spokesman Eric Schippers said no specific sites have been chosen, but the company’s focus is on the Reading and Lancaster areas.

“As in choosing the coordinates for our first Category 4 license in the York area, we had an eye on defense as well as offense,” he said. Category 4 is the official name given to mini-casino licenses. 

Penn National chose York County for the first site as a way to protect its flank and block other casino operators from opening facilities near Hollywood Casino. Penn National opened Hollywood Casino in 2008, spending more than $300 million to build the facility.

Schippers said the West Cocalico centerpoint for a new casino will expand the company’s defensive effort in Central Pennsylvania. Under state law, mini-casinos cannot be built within 25 miles of an existing casino, unless an existing casino is building a satellite location.

“We draw a lot of business to Hollywood Casino from the Reading and Lancaster areas and this location will allow us to better protect our market while allowing us to penetrate further into the more populous areas in the western Philadelphia environs,” he said.

Berks County seems more likely to host the new mini-casino since all 60 municipalities in Lancaster County originally opted out of hosting mini-casinos. Reading officials, meanwhile, have been stumping for a gambling parlor.

Licenses for the smaller casinos are being auctioned off under a state expansion of casino-style gambling. The new gambling parlors can house 300 to 750 slot machines and up to 40 table games.

Penn National’s winning bid today, the only bid in the auction, is for the fifth mini-casino license to be awarded. But it is the sixth auction. There are 10 mini-casino licenses up for grabs.

No bids were received at the fifth auction last month, which cleared the way for previous winners like Penn National to bid again.

The first four winning bids totaled nearly $120 million, but prices have fallen steadily since the first auction. That number now jumps to $127 million with five licenses left.

The minimum bid price for a license is $7.5 million. Penn National bid $3 over that. An additional $2.5 million fee must be paid for permission to add table games.

With its winning bid, Penn National now has six months to select a site for the new casino and submit an application to the Pennsylvania Gaming Control Board.

Penn National has yet to select a site in York County, a license awarded on Jan. 10. Schippers expects the company will take the full six months for its application.

The next license auction is slated for April 18.

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