Online Poker Takes Back Seat to Other Gaming Issues in Pennsylvania

Pennsylvania approved a wide ranging gambling expansion program at the end of 2017, and this year the PA Gaming Control Board (PGCB) has already received and granted full online gambling licenses (table, slots, poker) to many of the state’s casinos. While online casinos are expected to thrive and net solid returns for their operators, online poker, on the other hand, is likely to stay low-key in the absence of an agreement to join Nevada, New Jersey and Delaware’s shared player pool.

Nevertheless, Pennsylvania has stayed quiet on whether and when such a move is likely to occur, despite language being included in the expansion bill paving the way for such a development to occur. Commenting upon its chances of becoming part of the landmark ‘Multi-State Internet Gaming Association’ (MSIGA) in the near future, Doug Harbach, director of communications for the PGCB, recently stated:

“While an interstate compact could certainly occur, at this junction I can’t predict or comment on the likelihood.”

Other Priorities Ahead

Governor Tom Wolf (photo) would be required to authorize and sign off on any MSIGA before it passes into law. To date, however, he has given no clear indication as to where he stands on the issue. Further slowing down any potential progress is the fact the PGCB is currently dealing with a number of other issues that take precedence over the online poker vertical, including setting up uniform sports betting regulation to govern the industry, as well as establishing a plan for the state’s five remaining category 4 satellite casino licenses.

In the meantime, Wolf’s administration has drawn criticism from operators over the high price of its gambling licenses, as well as the state’s exorbitant gambling tax rates. Further complications have also arisen over the decision by seven of Pennsylvania casinos to file a lawsuit against the state lottery in order to prevent it from offering products which conflict with their interests, which is sure to sour Wolf’s relationship with them further.

Lawsuit Against PA iLottery

A number of Pennsylvania’s casinos have taken issue with the state’s Department of Revenue and its Secretary C. Daniel Hassell, whose department also oversees the PA Lottery. In May, the PA Lottery launched its selection of iLottery games that can be played online via the PA Lottery app. According to the ensuing lawsuit, the casinos have claimed that these “casino-style games online and on mobile devices” are illegal as they “imitate the look, sound, and feel of slot machines”.

Cited in the casino coalition’s petition are several games that have the same titles or themes as slot machines featured on their casino floors, including Volcano Eruption Reveal, Robin Hood, Super Gems, Big Foot, and Monster Wins. As their lawsuit subsequently states:

“The plain intention of Act 42 was to authorize online lottery games while preserving the rights of the Petitioners — who must pay a minimum of $10 million each to obtain interactive gaming certificates.. to offer interactive gaming without unfair competition from the iLottery, which has no license fees, a lower age restriction, pays no taxes, and enjoys the imprimatur of the Commonwealth.”

Substantial Contributions

Summing up the substantial financial contribution that Pennsylvania’s casinos have made to the state economy, a statement was released by the coalition explaining that they employ around 18,000 people, and have invested more than $5 billion in the state, as well as spending an additional $230 million each year on goods and services purchased from local businesses. During the 2016-17 period, slot machines alone apparently generated $2.3 billion in tax revenue for Pennsylvania, as well as an extra $132 million in funding for local host communities.

In 2017, Pennsylvania’s 12 casinos generated $3.227 billion in revenue, representing an historic high and topping the previous record set only the year before. That figure is only set to increase further going forward, though, as the state rolls out its expansion program, which includes the addition of one more land-based casino, as well as several new mini casinos, and the permitting of slot machines at truck stops and airports across Pennsylvania. Applications are also being taken for sports betting licenses, with the vertical expected to produce a handle of between $1-$1.5 billion once mature, resulting in extra revenues of $50-75 million.