Pennsylvania’s top gambling regulator says that the “novelty has worn off” for Pennsylvania’s casinos and that growth may have plateaued, leaving online gambling as a possible avenue for growth in the state’s gaming industry.

What the Gaming Control Board’s head said

William H. Ryan Jr., chairman of the Pennsylvania Gaming Control Board, was commenting as part of an in-depth feature at Trib Total Media on the current state of Pennsylvania’s casinos.

The story notes that casino revenue growth peaked in the 2011-2012 fiscal year, and that only two of Pennsylvania’s 11 casinos have experienced growth over the next two years (Sands Bethlehem and Valley Forge).

Ryan noted that he believes that growth for PA casinos may have topped out, without changes to their economical model and/or streams of revenue:

“The boom times for casino revenues we saw in years past are probably history,” said William H. Ryan Jr., chairman of the Pennsylvania Gaming Control Board. “Those were caused by the opening of new properties. And a lot of the novelty has worn off.”

And later:

“You have to expect as the number of casinos increases, the revenue of existing properties will drop some,” Ryan said. “The gaming industry is no different from any other industry. It is up to the people who run them to make them work and be profitable.”

One of the ways to foster growth in the casino sector? Online gambling.

Online gambling can help brick and mortar casinos

While Sheldon Adelson (casino magnate behind Sands Bethlehem) and company would like you to believe that internet gambling will cannibalize revenue from land-based casinos, that’s really not the case.

The most recent research on the subject of online gaming suggests that it can be complementary to brick-and-mortar casinos. The concept also came up at a Senate committee hearing last month, as representatives from both SugarHouse Casino and Harrah’s talked about iGaming’s potential for:

  • Growing revenue.
  • Creating new customers.
  • Reactivating inactive players.
  • Cross-promotional possibilities.

Then what’s stopping online gambling in PA?

In reality, there’s not much stopping it. There is minimal opposition to the idea of iGaming — notably from Sands and some horse-racing interests. The other 10 casinos generally support launching online gambling, to the point that some have already partnered with online platforms.

Most interests in the state approve of iGaming in some form, although the proposed tax rate and implementation remain issues that would need to be resolved.

In the spring, Reps. John Payne and Nick Kotik — a Republican and a Democrat — made their case for online gambling legalization in an op-ed, and both sides of the aisle have introduced regulation bills. The PGCB said it is more than ready to handle the task of regulating online gaming, if a bill is passed.

At the same time, legislation regulating online gambling has not really come up much in the current budget standoff. That’s despite the fact that online gambling has the potential of creating hundreds of millions of dollars in revenue for the state as the state looks to trim huge projected deficits.

But if casino revenue growth in Pennsylvania actually has plateaued or continues to dip at some casinos — and the state is still looking for revenue in the coming weeks and months — the solution on online gaming waits in the wings as a fairly non-controversial way to help foster growth in the sector.

Photo by It’s Our City used under license CC BY 2.0.