Penn National Gaming drops Suit over PA’s mini-casinos

A federal lawsuit filed in January this year by Penn National Gaming contrary to the Pennsylvania Gaming Control Board (PGCB) and Governor, Tom Wolf, has reportedly been withdrawn. The lawsuit sought to overturn a part of the governor’s 2017 expansion law; the Wyomissing-based operator in the time citing unfair competition because of the Hollywood Casino in Penn National Race Course close Grantville.

The case alleged that the gaming expansion law signed by Gov. Wolf on October 30, 2017, leaves the Grantville company uniquely vulnerable to its company being cannibalized by the brand new “mini-casinos,” more than all the other casinos in the nation.

Penn feared cannibalization:

According to Philly.com in the time…

The suit says, “Even though the 25-mile buffer zones purport to treat all existing casinos alike, as applied, Hollywood Casino, uniquely situated in the center of the country, is the only casino inclined to confront substantial cannibalization. ”

Penn National contended that the sole 25-mile buffer would not be enough to guard its casino in South Central Pennsylvania because the centre is independently and situated in the center of the country, unlike other casinos that are already are near rivals. Those casinos, the suit claimed, form what it calls “mega-clusters” which present a super buffer of sorts and boost the exclusion zones .

The lawsuit claimed that if gamblers frequent new centers, Hollywood would lose $34 million annually, causing financial harm that is “significant and distinctive. ”

Penn National filed the lawsuit on January 9 in federal court in Harrisburg, a day before bidding opened on the right to submit an application for the very first mini-casino license.

Winning bids for two mini-casinos:

But the operator’s objections to the new gaming extension law failed to deter it in bidding a $50.1 million in January for the first [York] Category 4 license. Penn National has in fact because then, bid successfully on another license, paying just $7,500,003 for the fifth casino license [Reading] in April.

According to Penn Live…

Penn National has yet to mention a last site for of its winning bids.

The operator officially withdrew the national suit in a July 12, 2018, detect registered in U.S. District Court.

Penn National spokesman Eric Schippers reportedly had this to say to Penn Live last week Once the news agency achieved about the withdrawal:

“We made a business decision to withdraw our lawsuits against the Category 4 (casino) law.

“Even though we continue to think in the merits of our discussions, we have chosen to focus entirely on our development efforts for both new casinos, rather than pursue what’s very likely to be a lengthy and costly legal battle.

“As previously stated, our aim of pursuing our Cat4 permits is both defensive, in terms of protecting our existing investment in Hollywood Casino from fresh competitors, and offensive concerning penetrating more deeply into more populous market areas to our south and east, in order to drive incremental value for our investors. ”

Not out of the woods yet:

While the withdrawal from the litigation by Penn National removes one danger to the state gaming laws, another registered in state Supreme court in the conclusion of last season by Sands Casino Resort Bethlehem remains in play.

In its December 28, 2017 lawsuit, Sands alleges that by requiring profitable casinos such as Sands to pay a special tax to subsidize casinos which are struggling financially, the gambling law violates state and national constitutions.