Posted on: September 13, 2024, 05:37h.
Last updated on: September 13, 2024, 05:37h.
Bally’s and SC Gaming announced today that their agreement to open and operate a Category 4 satellite casino near Penn State University at the Nittany Mall has been terminated, but the project will move forward and remains on track to open in the first half of 2026.
The decision arrived three years after the two companies struck an accord to develop a “mini casino” in what was previously a Macy’s department store at the Nittany Mall — a shopping venue located just five miles from Penn State’s campus. Bally’s wasn’t eligible to bid on the license when the auction was held four years ago, but Ira Lubert — the sole owner of SC Gaming — was eligible due to his stake in Rivers Casino Pittsburgh. He was the winning bidder and later partnered with Bally’s, agreeing that the gaming venue would bear the regional casino operator’s brand.
Amid Bally’s shifting corporate priorities, the agreement was scuttled and Lubert is making clear to state regulators that he has the financial resources to advance the project on his own.
As a part of the Pennsylvania Gaming Control Board’s application and approval process, I demonstrated to the Board my resources and capability to independently develop and operate this casino project without reliance on a third party, including Bally’s,” he said in a statement.
Lubert developed the Valley Forge Casino Resort during the global financial crisis and has a 3% stake in Rivers Pittsburgh.
A Lot’s Changed for Bally’s in Three Years
When Bally’s and SC Gaming decided to team up on the Pennsylvania mini casino three years ago, the project was inline with the casino operator’s prior ventures. Since then, however, Bally’s rapidly became more ambitious, targeting larger, more expensive developments in bigger cities.
The shift in Bally’s land-based casino priorities includes development of a permanent gaming venue in Chicago, which will be the operator’s highest-priced project to date. Additionally, the gaming company is pursuing a license in the New York City area and still holds the operating rights for Tropicana Las Vegas.
While the future of the Tropicana site is in flux and there are no assurances that Bally’s will procure a downstate permit in New York, the Chicago venture alone requires significant attention from the gaming company, indicating shedding of smaller projects, such as the Pennsylvania mini casino, could be prudent at this time.
Additionally, in July, Bally’s agreed to be acquired by Standard General — the hedge fund that is the gaming company’s largest shareholder. Such a transaction wasn’t on the table three years ago when the operator agreed to work with SC Gaming on the Nittany Mall casino.
Bally’s Has New Vision
Prior to Bally’s accepting the Standard General takeover offer, some shareholders criticized the company for becoming financially strained and placing too much emphasis on expensive projects in Chicago, Las Vegas, and New York. Some investors argued that some or all of those projects should be abandoned in the name of cost savings.
Some cost efficiencies are likely to be realized by dropping out of the Pennsylvania mini casino partnership, but Bally’s didn’t quantify that. With Chairman Soo Kim, the founder of Standard General, likely to take on a larger day-to-day role in Bally’s operations, it’s possible more cost-cutting moves will take place, but that remains to be seen. It is, however, clear that the Nittany Mall casino didn’t fit with Bally’s new vision for its future.
“The termination of the framework agreement aligns with Bally’s long-term strategic goals and allows the company to allocate resources towards other priorities. Bally’s remains confident in its ability to adapt and thrive in the ever-changing market,” said the company in the press release.
