Penn National now owns two Pennsylvania casinos

Breaking Down The PA Online Gambling Market: Meadows Racetrack And Casino

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Editor’s note: Pennsylvania recently legalized online poker and casino games. This is the next installment in a series of articles about the casinos in Pennsylvania and their possible place in the online gambling market.

The history of Meadows

Meadows Racetrack and Casino is the oldest pari-mutuel gambling establishment in Pennsylvania.

The harness track is located about 25 miles south of Pittsburgh in the southwest corner of the state. It originally opened in 1963 under the guidance of the Washington Trotting Association. A historical marker at the property’s entrance recognizes the work of founding father Delvin Miller.

Meadows became a racino when it received its casino license in 2006. A temporary slot parlor opened the following year, and the permanent casino was finished in 2009. Table games were added in 2010.

On the racing side, Meadows’ track is a 5/8-mile oval with a traditional surface. It runs about 200 race days throughout the year. The flagship event is the Delvin Miller Adios Pace for the Orchids, named after the track’s founder and his legendary steed. “Adios” sired nearly 600 offspring and is considered one of the greatest studs in harness racing history.

The property has changed hands numerous times since opening, most recently landing with Pinnacle Entertainment for a purchase price of $138 million. Last year, Penn National Gaming (PNG) announced it would acquire Pinnacle in a transaction worth billions of dollars.

The PA Gaming Control Board just approved the change of control of Meadows to Penn National this week.

Land-based casino performance

Meadows operates more than 2,700 slot machines and 80 table games, and it employs more than 1,300 people.

It generated about $250 million in gaming revenue for the 2016-17 fiscal year. That makes it the sixth-largest casino out of 12 in the state, pulling in just less than its fair share of profit.

More than 85 percent of Meadows’ gaming revenue can be attributed to slot machines, an even larger share than most casinos in the state. Just over half of it went back to the city, county and state in the form of taxes.

What we know about Meadows and online gambling

When PNG confirmed its Pinnacle acquisition, it made no secrets about its plans in the digital realm.

“The combined company will benefit from additional promotional opportunities in online and social gaming, which will help provide an additional boost to property level performance,” it said in a press release.

Penn National already runs a social casino through its interactive division, and it’s publicly moving toward real-money online gambling, too. Taking up a second position in Pennsylvania seems to be another step in that direction.

Platform provider

A likely scenario has PNG partnering with Scientific Games/NYX for its online casino platform.

If the rumors are true, Scientific Games/NYX will provide the platform for the Meadows online casino. The newly combined entity is among the world’s leading iGaming suppliers, boasting one of the largest libraries of games.

In-state partnerships/relationships

PNG also owns the Hollywood Casino outside of Harrisburg. It seems likely that the company will use the Hollywood brand for its online casino products, as it does in Nevada.

Out-of-state partnerships/relationships

There are dozens of casinos and racinos in Penn National’s portfolio, including two in Nevada. The group owns the M Resort and the Tropicana in Las Vegas, both of which operate social products under the Hollywood Casino brand.

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Forecasting Meadows’ online gaming performance

Penn National is well-positioned for online gambling on its home turf. It now owns two PA casinos, one on either side of the state. This one is within reach of Pittsburgh, and the other, Hollywood Casino, is just outside the state capital.

Being able to attack the market on two fronts should provide immediate benefits to PNG. It’s going to want to bolster its regional presence, and online gambling is complementary to that goal.

Penn National parterning with a giant like Scientific Games also bodes well for Meadows’ entry into the online market.

Past installments of this series:

- Eric is a reporter and writer covering regulated US gambling, sports betting, and DFS. He comes from a poker background, formerly on staff at PokerNews and the World Poker Tour.
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