When online gambling was passed in October 2017, some expected the first casinos would be live by the summer of 2018. The summer eventually turned to the end of 2018 and then the early part of 2019. Now the clearest indication yet of a timeframe — online gambling could be live by July 2019, according to Pennsylvania Gaming Control Board Director Kevin O’Toole.
The comments came during a House Appropriations Committee hearing this week where O’Toole said that the games were on target to launch in 3-4 months.
“We’re getting close. If not right before the end of this fiscal year, definitely the beginning of the next.” Online sports betting is also believed to be under a similar timeframe.
So far, licenses have been given to 10 of Pennsylvania’s 13 casinos. Additional out of state applications were submitted by MGM and Golden Nugget in October 2018 but have yet to be approved.
PA mini-casinos took a lot of the attention in the beginning of 2018 and towards the end of 2018, sports betting became the focus. Early 2019 seemed to be online casinos and online pokers time. That was until the U.S. Department of Justice updated their 7-year opinion on the 1961 Wire Act in January. Prior to the original reversal in 2011, the Wire Act has historically held back online gambling progress in the United States.
A new problem: The Wire Act
In late 2011, the DOJ announced that the Wire Act only applied to sports betting crossing state lines. Under a new administration and perhaps outside political pressure, the Department of Justice reversed that opinion to more broadly say that many forms of online gambling are not lawful, especially if the online gambling crosses state borders.
All states that have regulated online gambling thus far require that players be physically in the state at the time of wagers. States have done a good job of enforcement, but after the new opinion was released, there was a renewed concern that all infrastructure would also need to be located intrastate in order to comply with the new opinion.
Although it is not 100% known what will and will not be allowed under the new opinion, Pennsylvania regulators are working under the assumption this more measured approach is closer to the intention of the DOJ. If not, there will be likely court battles ahead.
Wire Act reversal main cause for delay
To comply with the law, the Pennsylvania Gaming Control Board gave casinos 30 days to present plans of how they planned to comply with the new law. The main requirement for PA regulators is how the state’s casinos plan to keep online gambling infrastructure — including servers and possibly payment processing — completely within the state.
The confusion and Wire Act compliance has moved the timeframe for PA online gambling from what looked like an early 2019 launch to sometime in the middle of 2019. This is, of course, barring any new unforeseen issues or obstruction.
Regulators are also busy testing software and making sure safeguards are put in place for compulsive or problem gambling. Such safeguards include self-imposed limits and self-exclusion steps, so players themselves can take easy action if they feel they have a problem. “Treatment is available in Pennsylvania, and it works. And it helps the individuals who have a gambling addiction, and it helps their families as well.”
One big impact of the Wire Act reversal is that PA online poker rooms will not be able to share liquidity with other states. While this will affect small states and online poker the most in general, the large population of PA means it should be able to sustain its own online poker market and certainly online casinos, which do not demand the same liquidity concerns.
So while online gambling in PA is undergoing a slight delay, the good news for players and stakeholders in the industry is that Pennsylvania appears to be full steam ahead with an online gambling launch this summer.