The state of Pennsylvania is $112 million richer, thanks to its third satellite casino auction. Mount Airy won the bigging for a license with a $21 million bid. The casino plans to build their satellite in Lawrence County.

According to the Morning Call, Lawrence County leaders sent out letters to the state’s existing casino trying to convince them of the county’s readiness to welcome a satellite to their area.

County commissioner chairman Dan Vogler said he and his colleagues were waiting on the results of the lottery to find out who won and where the winner would build their property.

“We watched it here this morning, and we were very pleased with how it transpired,” Vogler said.

Mount Airy became the third casino in three auctions to win a license. Penn National scored the first one with a $51 million bid, while Stadium Gaming LLC snagged the second one for $41 million.

Mount Airy beat out two other casinos

Per the Pennsylvania Gaming Control Board’s rules, the auctions take place at 10 a.m. Bidders provide the auction board with two envelopes — one contains the casino’s bid and one contains the coordinates of where the casino plans on building their satellite.

After the auction was over, the board released the results: Sands and Parx’s bids lagged behind Mount Airy’s offer.

Satellite site just a few miles from 500,000 people

What makes the satellite casino auctions so fascinating isn’t just the bidding; it’s the strategy.

For example, Penn National won the first satellite license. Its mini-casino will pop up in Yoe County, which gives it access to Maryland residents driving up the interstate to gamble in Pennsylvania. However, there aren’t any major cities near the Maryland-Pennsylvania border.

Stadium Gaming LLC, the group who will soon break ground on Philadelphia’s second casino, won the second satellite license auction. Their site is just outside Pittsburgh, a move that will capture coming from the east of the metropolis and will, it seems, cut into Rivers’ revenue.

Mount Airy’s Lawrence County location may be the most ingenious of all of them because their site will be a 30-minute drive from Youngstown, OH, a city whose urban and surrounding area is home to more than 500,000 people.

The city does have a racino — Hollywood Gaming at Mahoning Valley Racetrack — but the property has no slot machines or table games, two things the satellite property will offer.

A look into the future of the remaining seven satellite licenses

There are two factors that stand at the forefront of the discussion about Pennsylvania’s remaining seven satellite licenses.

First, there’s a good chance prices may decline as each new license comes up for auction. The first license went for around $50 million, the second for $41 and third for $21 million. The minimum bid is $7.5 million. The downward trend points to the next license selling for less than $20 million, but it’s no guarantee.

Second, strategy may dictate who bids and when. For example, Stadium Gaming’s plans to build just a few miles east of Pittsburgh may push Rivers to make a move for a satellite and capture some of the revenue they’ll inevitably lose from the Stadium property.

SugarHouse, the original Philadelphia casino, may also feel pressure from Stadium Gaming’s satellite. While the satellite won’t cut into SugarHouse’s revenue, the money Stadium earns from that second location could be leveraged to strengthen their soon-to-be-constructed Philadelphia location through better marketing, expanded entertainment venues, and other avenues of growth.

J.R. Duren

J.R. Duren

J.R. Duren is a freelance writer and author. He is a three-time winner at the Florida Press Club Excellence in Journalism contest. His work has appeared in numerous blogs and publications including Bespoke Post, Snooth, Our Amazing Norway, Barcelona Metropolitan and The Villages Daily Sun.