Pennsylvania officially became the fourth US state to legalize online gambling when Gov. Tom Wolf signed the comprehensive gambling expansion bill on his desk last week.
Now, the question is: Who will get online first?
New Jersey, Delaware and Nevada were previously the only US states to pass online gambling legislation.
The PA gaming expansion
The new law makes it legal to operate online slot machines, online table games and online poker throughout Pennsylvania. However, there are also a number of other gambling expansion initiatives attached. The new law regulates:
- Daily fantasy sports
- Sports betting (should it be legalized federally)
- Online lottery sales
- Video gaming terminals at approved truck stops
- Tablet gaming in approved airports
It also authorizes the construction of up to ten satellite casinos at under-serviced locations a specified distance from one of Pennsylvania’s 12 existing casino operations.
Online gambling in Pennsylvania now legal
Tax rates were heavily debated in the lead up to the passage of the law. PA lawmakers ultimately settled on the very same tax rates brick and mortar casinos in the state are already paying. This includes:
- 54 percent for online slots
- 16 percent for online poker
- 16 percent for online table games
The state’s existing 12 casinos now have 90 days to apply for a license to operate the three different forms online gambling. PA casinos can apply for a license for all three. It will cost $10 million. PA casinos are also welcome to apply for any of the three separately. These licenses will cost $4 million each.
If any of the 36 available licenses remain unclaimed following the 90-day period, companies outside of the existing 12 PA casinos will be allowed to apply for them.
Getting ready for market
While it took New Jersey close to nine months to launch of regulated online gambling from the day online gambling legislation passed, PA is expected to get things done a little faster.
Regulators in New Jersey have paved a path for Pennsylvania. Plus, the process may be fast-tracked because it will only involve existing gambling licensees at the outset.
It is also worth noting that Pennsylvania’s fiscal year ends in June. Lawmakers are certainly hoping to see the initial licensing fees come in before then, ensuring the revenue is on the books for the current fiscal year.
Still, the question remains as to which of PA’s 12 existing casinos will be applying for the first licenses.
Penn National Gaming operates the Hollywood Casino at Penn National Race Course. The organization has been critical of some aspects of gambling expansion, particularly satellite casinos. It is unlikely to apply for one of the first online gambling licenses as it is reportedly pursuing legal options to combat the law entirely.
Parx Casino was critical of proposed tax rates in the creation of the bill. Parx executives also expressed a fear online gambling operations would cannibalize the brick and mortar casino business. It remains unclear if the legislation that passed will draw Parx online.
Sands Casino Resort Bethlehem owner Las Vegas Sands Corporation and its CEO and Chairman Sheldon Adelson have represented the largest opposition to online gambling legislation in the US for years. It might appear hypocritical if Sands applies for a license in PA. However, the competition may force its hand.
Ready to roll
Philadelphia’s SugarHouse Casino and owners Rush Street Gaming launched a New Jersey online gambling site under the Golden Nugget Atlantic City’s internet gaming permit in September 2016. Considering the company’s interest in online gambling, and the fact it has the software ready to roll, SugarHouse Casino could very well be one of the first to apply for table games and slots license in PA.
Caesars Entertainment owns and operates Harrah’s Philadelphia Casino and Racetrack. Its Caesars Interactive Entertainment subsidiary also runs World Series of Poker-branded online poker rooms in New Jersey and Nevada.
The Nevada site also shares player pools with 888 Poker online poker sites in Delaware under an agreement between the two states signed in 2015. New Jersey also signed on to join the agreement in October. As a result, Harrah’s and Caesars are a good bet to apply for one of the first online poker licenses in PA.