Penn National strikes deal to enter Pennsylvania’s new VGT market

January 7, 2019 6:45 PM
  • Howard Stutz, CDC Gaming Reports
January 7, 2019 6:45 PM
  • Howard Stutz, CDC Gaming Reports

Pennsylvania’s entrance into the nation’s growing video gaming terminal market saw its first high-profile entry Monday from Penn National Gaming.

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The regional casino giant announced that it has entered into a deal with convenience store operator Rutter’s to provide up to five VGTs in each of 20 Rutter’s locations around the state. The deal is subject to approval of Pennsylvania gaming regulators.

State lawmakers approved the use of VGTs last year as part of an overall gaming expansion. Regulators told in December they expected the slots-like games to begin rolling out early this year.

“We are excited to combine our expertise with Rutter’s established success in the convenience store industry to offer VGT gaming at their qualified locations,” Penn National Senior Vice President of Regional Operations John Finamore said in a statement.

Penn National is the nation’s largest regional casino operator, with 41 properties in 18 states.

Estimates of Pennsylvania’s VGT market potential are, to this point, unclear.

Penn National, which is headquartered in Wyomissing, Pennsylvania, is active in the industry. The company acquired an Illinois slot machine route operation in 2015, allowing it to enter a market that analysts expected to expand into several states. Nevada, Montana, and South Dakota are among the handful of states that allow slot machine route operations, in which a fixed number of games are allowed in non-traditional gaming locations, such as taverns, bars and convenience stores.

Illinois has become the most high-profile slot route state. As of the end of November, nearly 6,800 taverns, convenience stores, bars and other locations in Illinois operated 30,735 video gaming terminals, according to state regulators. The state’s expanding VGT market has sliced into the gaming revenues of Illinois’ riverboat casinos. In November, Illinois VGTs reported revenues of $125.1 million.

Last year, regional casino company Boyd Gaming Corp. acquired an Illinois route operator.

Under Pennsylvania’s gaming expansion law, establishments that meet certain criteria are eligible to host up to five VGTs inside their stores. The law sets maximum bets at $5, with a maximum payout of $1,000.

As of December, more than 60 locations in Pennsylvania had applied for licensing to host video gaming terminals; of those, more than 20 had received conditional state gaming approval.

Penn National received a conditional license from the Pennsylvania Gaming Control Board to serves as a terminal operator. Rutter’s has filed its application with the regulators.

“We look forward to partnering with (Penn National) to provide our customers the opportunity to enjoy playing VGTs at a number of our locations throughout Pennsylvania,” Rutter’s CEO Scott Hartman said in a statement. The company is headquartered in Pennsylvania and operates convenience stores in Pennsylvania, West Virginia, and Maryland.

Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at Follow @howardstutz on Twitter.