As little as two months ago, the announcement Monday that Penn National was buying fellow gaming company Pinnacle Entertainment would have been dead in the water in Pennsylvania.
The deal might still have happened, but Penn National (owner of Hollywood Casino in Grantville) probably wouldn't have been able to purchase Pinnacle's Pennsylvania property, The Meadows racetrack and casino in Washington County, because the state's gaming laws forbid state operators from owning more than one casino property.
That changed in October, when Gov. Tom Wolf signed the state's gambling expansion bill into law. In addition to providing for more gambling operations across the state, the law struck down the state's existing ownership restrictions.
The announced deal, which would quite possibly create the state's largest gaming operation -- controlling more than one-in-twelve table games and roughly a fifth of all slot machines in the state as of June 2017 -- will face scrutiny from state regulators.
The change in ownership of the Meadows will have to be approved by the state's Gaming Control Board after the organization conducts a due-diligence review of the proposed transaction, said Doug Harbach, spokesman for the board.
"Any change in ownership has to be approved by the board," he said. Harbach said there was no timetable, as of yet, to when that could happen.
"We're going to look at all aspects of the deal," he said. "The bottom line is: Is it in the best interests of the commonwealth?"
It is unlikely to be the last merger among casino operators either. Over the last decade, there have been a number of mergers within the industry, many of which have occurred within the county's largest gambling mecca -- Las Vegas.
While Penn National owns two casinos in Las Vegas, Pinnacle Entertainment doesn't have a footprint in the city although it is based there. But the merger of the two would mark the joining of two the largest owners of casinos outside the city, which when completed, will give Penn National control of 41 casinos and race tracks across the nation, with 53,000 slot machines, 1,300 tables, 8,300 hotel rooms and 35,000 employees, making it the nation's largest regional gambling operator.
That should result in huge cost savings for Penn National (company officials estimated $100 million in savings over the first two years) and could enable it to attract more gamblers through the new company's combined loyalty programs while increasing Penn National's geographic reach, which in turn could attract more regional gamblers to the company's premier resorts in Las Vegas.
The deal is expected to close in the second half of 2018, pending regulatory approval.