Bally’s Seeking iGaming Privileges in Pennsylvania, State College Casino Dispute Drags On

Posted on: January 4, 2023, 11:48h. 

Last updated on: January 4, 2023, 01:23h.

Devin O'Connor @CasinoorgDevinO Read More
Expertise: Asia Pacific Gaming, Commercial Gaming, Legislation, Politics.

Bally’s Pennsylvania, LLC, a fully owned subsidiary of Rhode Island-based Bally’s Corporation, has filed a petition with the Pennsylvania Gaming Control Board (PGCB) to receive iGaming privileges.

Bally's Pennsylvania State College casino iGaming PGCB
Bally’s Atlantic City is one of the flagship properties owned by Bally’s Corporation. The company is seeking to expand its gaming operations into Pennsylvania by way of a land-based mini-casino in State College and online with an iGaming platform. (Image: Bally’s Corporation)

Pennsylvania gaming regulators on Tuesday reopened bidding for iGaming concessions. The PGCB said there are three categories of interactive gaming licenses available, each costing a one-time fee of $4 million.

The state says there are three available licenses to operate online slot machines, three licenses for online table games, and six permits for internet poker. Bally’s is seeking online slot and table privileges, which — if the company is deemed a “Qualified Gaming Entity” by the PGCB and is subsequently issued the concessions — would need to pay the state an $8 million licensing fee.

The Bally’s bid for iGaming in Pennsylvania comes as the company continues to seek a Category 4 “mini-casino” license. The company wants to renovate the former Macy’s department store at the Nittany Mall in State College near Penn State University into Bally’s Pennsylvania.

Satellite casinos were authorized through a substantial gaming expansion package passed in 2017. Each mini-casino is allowed to operate a maximum of 750 slot machines.

An initial allotment of 30 table games can be added for an additional $2.5 million. After 12 months in operation, satellites can petition the PGCB for an additional 10 tables.

Bally’s Bullish on Pennsylvania

Since the state’s 2017 gaming expansion — which in addition to satellites, legalized sports betting, online casino gambling, truck stop gaming, and airport gaming lounges — Pennsylvania has emerged as one of the richest gaming states in the country. Pennsylvania’s monthly gaming revenue regularly trails only Nevada, and sometimes New Jersey.

Despite market saturation concerns, Bally’s remains focused on gaining entry to the commonwealth. Should its State College casino plan fall through because of legal challenges to the Category 4 bidding process and/or widespread local opposition to the project, Bally’s still wants to operate online slots and tables in the commonwealth.

Bally’s believes it meets the state’s requirements to be considered a “Qualified Gaming Entity” to receive iGaming rights.

In its PGCB petitions, the company says it satisfies the state’s requirement that a bidding iGaming firm “demonstrate that it currently holds, directly or indirectly through an affiliate, a license in good standing in any US or foreign gaming jurisdiction.” Bally’s currently owns and manages 14 land-based casinos and one horse racetrack in the US.

Bally’s also thinks it satisfies Pennsylvania’s requirement that an iGaming applicant is “in good standing and there may not be any enforcement actions pending against the entity.” However, sections of Bally’s iGaming petition were redacted, as permitted under the state’s Gaming Act. One of the redacted sections follows Bally’s saying it has never been denied a gaming license in a market it has sought entry.

Finally, Bally’s says it has no trouble producing a “bond or letter of credit” from an established bank in the US. That would be used to follow-through on the $8 million fee it would need to pay for the online gaming licenses.

Cordish to Make its Case

The Cordish Companies, which operates Live! Casino & Hotel Philadelphia and Live! Casino Pittsburgh, has raised legal concerns that Bally’s should not be allowed to operate a casino in State College.

Cordish attorneys argue that Ira Lubert, who was the high bidder during the PGCB’s satellite casino auction round in September 2020, orchestrated an illicit bid by partnering with Bally’s before submitting his winning $10 million offer. Only land-based casinos and key individual investors in the state’s brick-and-mortar casinos qualified to bid during the 2020 auction.

Lubert maintains a 3% ownership position in Rivers Casino Pittsburgh. Soon after securing College Township for his Category 4 casino development, Lubert announced a partnership with Bally’s to embark on what would be a $123 million development.

In December, the PGCB said Cordish will be allowed to intervene in its review of Bally’s Pennsylvania proposal. The state will provide Cordish with 15 minutes at a to-be-scheduled hearing to present its case as to why Bally’s should be denied a Category 4 casino license.