Today, the Pennsylvania House of Representatives passed, on a 153-29 vote, a bill that would significantly change the landscape for the revoked Philadelphia slot license. Frank DiGiacomo and I have reported about that license here and here.
The bill, HB 65, would first remove the restriction that the remaining Category 2 slot license be located within the City of Philadelphia, and would instead allow that license to be awarded anywhere in the Commonwealth. The bill will also set up an auction process for the license. Under the auction, the minimum bid will be $66.5 million. Under the auction process, the PGCB is to retain a financial advisory firm to assist with the auction process. Prospective licensees must submit a definitive, noncontingent proposal containing the amount of the bid, an identification of all financial sources, location, details of municipal approvals and requests for approvals, a discussion of other approvals required, an ownership chart, business plans, five year projected financials, and a projected opening date. These bids will become public record.
Once the bids are received, the financial advisor hired by the PGCB has 30 business days to report on the proposals. Then, the PGCB is to select three proposals to advance to the next round. Once the three finalists have been selected, the PGCB is to conduct public hearings on each proposal, and make a final evaluation of the proposals. The criteria for award is an award to the bidder who submits the highest responsible proposal that will provide the greatest amount of projected total revenue to the Commonwealth, and otherwise serves the interests of the state. The bidder must satisfy all other requirements of the Gaming Control Act, including financial stability and qualification, before being awarded the license.
Interestingly, this bill would waive the prohibition currently in place that prohibits the current owner of a casino in Pennsylvania from having more than a one-third interest in another casino.
The bill now moves to the Senate for consideration, where its future is uncertain. Currently, there are several schools of thought with respect to this available license. One suggests that the Pennsylvania market is in danger of saturation, and, therefore, would simply eliminate the available license. Another suggests that the license should be awarded anywhere in the state. A third suggests that no change should be made, and that the license should remain in Philadelphia where it was initially allocated. The legislative and regional interests represented in the Senate will tell where this bill is headed. Amending this statute has, in the past, been a difficult process in Pennsylvania, so it is hard to predict an outcome. Stay tuned for more information as we get it.