Casino operator Penn National Gaming Inc. confirmed this week that it had withdrawn its lawsuit against the Keystone State challenging the legalization and expansion of the so-called “mini-casinos”. Penn National went public with its objection to the new Category 4 casino licenses that authorized the establishment of new mini-casino in the state.
According to Penn National Gaming, the satellite casinos were very likely going to cannibalize the state’s existing set of casinos without contributing much to the revenue. The operator, through its lawyers, went further ahead to claim that Hollywood Casino at Penn National Race Course, its operation in the state, was going to be uniquely victimized particularly because the 24-mile buffer zones for existing casinos would provide huge buffers for its competitors but leave its more far-flung primary market exposed.
In addition to that, they also claimed the state law provided special treatment to Mount Airy Casino when it excluded the establishment of casinos within three of Mount Airy’s surrounding counties. Also, Mount Airy is not required to share a cut of their revenue with all the surrounding counties, unlike the case with the remaining 12 operators who are required to share portions of their revenue with the local host authorities. The operator’s lawsuit was championing for the federal courts to block the state’s new Category 4 casino provisions because they “treat existing operators unfairly and use ‘unconstitutional’ language.”
A Change of Heart?
Regardless of their stance against the state’s laws, Penn National went ahead to secure the rights to the first Category 4 auction – they paid a whopping $50.1 million for the rights to set up a mini-casino in York County. A while later when bidding for the remaining licenses stalled and previous auction winners were allowed back to the bidding pool, Penn went back for a second satellite, this time parting with a $10.5 million for Lancaster County.
Now, with the two Category 4 casino licenses in hand, the operator has opted to focus on the two projects instead of the fruitless fight against the inevitable development.
“We made a business decision to withdrawal our lawsuits against the Category 4 law. While we continue to believe in the merits of our arguments, we have chosen to focus entirely on our development efforts for our two new casinos, rather than pursue what is likely to be a lengthy and costly legal battle,” Eric Schippers, the Penn National spokesperson explained. “Our goal in pursuing our Category 4 licenses is both defensive, in terms of protecting our existing investment at Hollywood Casino from new competition, and offensive in terms of penetrating more deeply into more populous market areas to our south and east.”
As it stands, the casino operator is yet to name final site for either of its winning bids. It may not be late for this since the PGCB recently gave it a two-month extension to come up with a formal proposal for the site of the satellite casino in York County.
