Posted on: January 4, 2021, 09:06h.
Last updated on: January 4, 2021, 11:26h.
Bally’s Corporation and Pennsylvania businessman Ira Lubert are partnering to build a satellite casino near Penn State University in Centre County.
Lubert was the high bidder during the September auction held by the Pennsylvania Gaming Control Board (PGCB). The Category 4 license was won with a $10,000,101 bid. Category 4 permits satellite gaming venues to house up to 750 slot machines and initially 30 table games.
Lubert pinpointed a 15-mile radius centered in Unionville Borough. The municipality did not opt-out of Category 4 consideration. The Nittany Mall is located within the selected radius.
In a press release announcing the Bally’s and Lubert partnership. The project did not specify if the casino will take over a vacant part of the Nittany Mall. However, it did say it would be at least near the shopping center.
Post-COVID Mall Makeovers
Shopping malls were struggling before COVID-19, and the pandemic has only further strained retail shopping. In Pennsylvania, Category 4 satellite casinos are coming to the rescue of some malls that have become ghost towns in recent years.
Penn National Gaming is underway with transforming a former Sears department store at the York Galleria Mall into a Category 4 casino. The gaming and entertainment space has a total investment price of $120 million. This includes the $50.1 million bid Penn National paid to win the first satellite casino auction round.
In the western part of the state, The Cordish Companies spent $150 million — inclusive of its $40.1 million winning auction fee — to overhaul a former Bon-Ton department store at the Westmoreland Mall into Live! Casino Pittsburgh. The casino opened its doors on November 24 but was forced to close less than a month later on state COVID-19 orders. The gaming venue reopened today, January 4.
Bally’s and Lubert could follow Penn and Cordish’s leads and build their casino at the Nittany Mall. Former anchor tenants JC Penney, Sears, Bon-Ton, and Macy’s have all closed their doors in recent years.
The Nittany Mall is located less than four miles from Beaver Stadium. Home of the Penn State Nittany Lions, the venue brings in more than 100,000 fans during home college football games.
Multi-Million Dollar Project Details
Bally’s estimates the total cost for its Pennsylvania casino to come in around $120 million, inclusive of the licensing fee. Bally’s says it will acquire a majority equity interest in the partnership and will receive 100 percent of all revenue generated by sports betting and online gaming.
Lubert has made his immense wealth through his own private equity firms. He’s also played his hand well in Pennsylvania’s gaming industry.
Lubert was a founding investor in the Valley Forge Casino Resort. Because it was initially a Category 3 casino only accessible to hotel guests and members, the PGCB licensing fee was only $5 million in 2011. That’s far cheaper than the $50 million costs for a Category 2 casino that is open to everyone.
The PGCB in 2017 amended its categories and allowed Valley Forge to pay a $1 million fee to welcome in non-hotel guests. Lubert and his partners sold the casino a few months later to Boyd Gaming for $280.5 million.
Lubert no longer holds stake in Valley Forge, but does have a three percent interest in Rivers Casino Pittsburgh.