It’s been a long time coming, but finally, Pennsylvania’s gamblers know when online gaming will come to their state: July 15, 2019!
Executive Director Kevin O’Toole of the Pennsylvania Gaming Control Board (PGCB) announced during a PGCB meeting on April 15, that the board needed 90 more days and then they would allow Pennsylvania’s casinos to begin online gambling operations.
Assuming all goes as planned, in a couple weeks or less, Pennsylvania will be the fourth state in the US with legal mobile sports betting. Additionally, in a little under three months, Pennsylvania will be the fourth state in the US with legal online poker.
Lots of moving parts leads to a long wait
In October of 2017, Governor Wolf signed legislation enabling a massive expansion of gambling in Pennsylvania. State officials had guessed (correctly) that the US Supreme Court would strike down a law that had made sports betting illegal throughout most of the US. In addition, the DOJ under Obama had issued new opinions regarding the scope of the Wire Act that left room for states to decide issues of gambling for themselves, free from federal prohibitions.
In May, 2018, the US Supreme Court ruled as many expected they would. Thanks to legislative prescience, Pennsylvania was well positioned to greatly expand gambling activity in the state. In addition to online casino gaming, the new legislation also provided for anew online lottery, satellite casino expansions, and sports betting (including mobile betting).
As one would expect, many PA casinos have rushed to take advantage of these new opportunities. There have been several satellite casino expansions planned. Nine operators have opened sportsbooks. Ten operators have applied for online gaming licenses. Although many have been approved for these licenses, until now nobody has had any idea when online gaming could actually begin. Now we do – July 15.
Pennsylvania’s online gambling picture in detail:
Pennsylvania has thirteen land-based casinos. All were eligible to apply for online gaming licenses in the state. There are three different types that can each be had for $4 million each. Operators who opt for all three get a $2 million discount, so the bundle can be had for $10 million.
Ten PA casinos have applied for and received licenses to operate online slots and online table games. Seven of these ten casinos also opted for the license that allows for online peer-to-peer gaming (read: online poker).
Sports betting is covered by a completely different license (Also costing $10 million). For details on the PA sports betting market, click here.
Only three PA casinos (Lady Luck Nemacolin, Meadows, and Rivers Casino) declined the offer of legal online gaming. The reluctance of Rivers Casino is no mystery. They can simply use the license of their sister casino (SugarHouse) to operate state-wide. The extra expense of a license just for the Rivers brand is unnecessary.
The other two casino operators must have decided their prospects in the online gaming space didn’t warrant the steep license fees and state taxes that accompany the privilege.
Since 36 online gaming licenses were created for all thirteen PA casinos, when some were left unsold, the PGCB looked for other buyers. They made allowances for outside Qualified Gaming Entities (QGEs) to buy the left-over licenses at the same price. Two outside operators (Golden Nugget and MGM) took the PGCB up on the offer and will be operating online gaming in Pennsylvania under this special QGE status.
Online poker returns to PA
Online poker used to be popular all across the US. That all changed in 2011 when the US Government effectively destroyed US online poker. Since that time, legal options for US players have been meager. There are some intra-state sites in Nevada and New Jersey and there are the beginnings of efforts to merge player pools. Overall however, the online poker landscape is desolate compared to the vibrant online poker community Americans used to enjoy prior to “Black Friday”.
Because of this, the opening of the PA online poker market is highly anticipated. Here’s what we know about this future market so far:
- PokerStars, the industry leader, will operate under its partnership with Mount Airy Casino.
- PartyPoker will operate under its partnership with Valley Forge Casino
- Harrah’s Philadelphia will probably operate two platforms, WSOP and 888 Poker.
- SugarHouse, Sands, Hollywood, and Parx Casino also bought online poker licenses, but their technical partners have yet to be announced.
Will the new (old) Wire Act interpretation mess it all up?
Gambling, in both brick & mortar and virtual varieties, is set to sweep across many states in the US in the very near future. There are some worries that the DOJ under Trump might try to curtail at least the online portion of this trend, but so far states don’t seem to be giving in. In fact, some states are drawing lines in the stand and getting ready for a fight over the issue.
The PGCB has announced it will move forward despite the DOJ’s new hostile posture. To that end, Pennsylvania is involved with a federal court proceeding in New Hampshire that is challenging the new DOJ “interpretation” of the Wire Act.
To put it mildly: much is riding on the outcome of this decision.
Technology might come to the rescue as well. Regardless of DOJ attitudes, casino operators may avoid legal trouble from the Feds if they can successfully confine all online activities (including servers and payment processing) within the borders of their respective states.
The prospect of merging player pools in online poker is perhaps most at risk from the DOJ’s interpretation of the Wire Act. The number and variety of poker games available to players is severely restricted if they can only play against people residing in the same state.
Hopefully the DOJ will be convinced to back down.