The formerly disrespected Category 4 casinos are suddenly heating up. Category 4 casinos, created by Pennsylvania’s 2017 gaming expansion law, were intended as satellite facilities to current licensees, to be located in underserved areas with facilities limited to 750 slots and 30 table games at opening, with an additional 10 table games authorized by petition after opening. The gaming board opened bids to outside operators after auctions drew no bids from current licensees.
With Pennsylvania’s first Category 4 satellite casino up and running after Cordish opened Live! Casino Pittsburgh in December, other operators are working to get their own Category 4 properties open. Next to open looks to be Hollywood Casino Morgantown, one of two satellite facilities licensed to Penn National Gaming.
Category 4 casinos were created by Pennsylvania’s 2017 gaming expansion law. Initially, they are to be tied to a current casino licensee, with the aim of filling in areas in the state deemed to be underserved by gaming supply. Commonly called “mini-casinos,” the facilities are limited to 750 slot machines and 30 table games at opening, with another 10 table games permissible by petition after opening. The law authorized 10 Category 4 facilities.
Penn National was the first operator to be granted a license for a Category 4 facility, with a successful auction bid of $50.1 million for a facility at the York Galleria mall. It turned out to be the most bid for any of the satellite facilities, as smaller bids were subsequently successful as the demand for the facilities waned. Penn won the license for Morgantown with a bid of $1 over the minimum $7.5 million requirement. (The subsequent auction after that drew no bidders.)
The $111 million Hollywood Casino Morgantown will open with the maximum allowable 750 slots and 30 table games. It will be located just off the Pennsylvania Turnpike’s Morgantown exit in Caernarvon Township, Berks County, around 48 miles from Philadelphia.
Penn National spokesman Jeff Morris told the PennLive news site the casino is on track to open by the end of the year, after construction delays due to the Covid-19 pandemic torpedoed the original planned late 2020 opening for both Morgantown and the York casino. “We have utilized this additional time to reimagine our offerings at these properties, and will have more information to share in the coming months,” Morris told the news outlet.
Bally’s Corp., along with former Pennsylvania State University trustee and investor Ira Lubert, announced that their new Category 4 casino will be built in a former Macy’s anchor store at the Nittany Mall, in College Township near the Penn State campus in College Township in central Pennsylvania.
Bally’s and the investor won the license with a $10 million bid in a September auction held by the Pennsylvania Gaming Control Board. The partnership beat out one other bidder to become the first Category 4 licensee that is not also a Category 1 (racino) or Category 2 (large stand-alone) licensee.
Bally’s, the former Twin River Holdings, indicated the new $120 million casino will open with the maximum allowed 750 slots and 30 table games, along with a sportsbook, a restaurant and entertainment facilities. A fact sheet and local impact report released last week by College Township stated, “Tax revenues to the township from the casino will be a significant net positive to the township budget.”
“Expanding our rapidly growing, national footprint into the attractive Pennsylvania gaming market represents yet another major milestone for Bally’s and a great way to cap off a truly extraordinary year,” George Papanier, president and chief executive officer of Bally’s Corp., said in a January statement.
“Regional, land-based casinos remain the cornerstone of our portfolio diversification strategy, providing the necessary support for the growth, development and success of our future sports betting and iGaming initiatives. We look forward to combining our own proven track record of greenfield development with Ira Lubert’s local knowledge and expertise to bring Bally’s first-in-class gaming experience and amenities to customers and sports fans across Pennsylvania.”
Lubert, a 1973 Penn State graduate and former chairman of the university’s board of trustees, is a real estate and private equity investor.
“I am excited to have Bally’s as our partner to complement our vision, industry experience and financing capabilities,” Lubert said in the January statement. “Together, I believe we will make this transformative project successful for all stakeholders and look forward to the positive impact the redevelopment will have on the community.”
The new Bally’s casino will be the third in Pennsylvania to be located inside a retail mall, following Cordish Companies’ Live! Casino Pittsburgh in Westmoreland Mall and Penn National’s Hollywood Casino York in the York Galleria. Construction on the facility.
