MGM Has Grand Plans For PA Online Casino Business

MGM Resorts finally found a way into the Pennsylvania online casino market, applying as a qualified gaming entity to the PA Gaming Control Board.

We finally know where those remaining PA online casino licenses will likely wind up.

According to a recent report, US gaming giant MGM Resorts International has thrown their hat in the ring when it comes to PA-based online gaming.

We also know that MGM has made a bid for at least one of the available PA online casino licenses.

But is that all they’re after?

Three’s better than one

Turns out MGM has its sights set even higher than just dipping a single toe in the PA online gaming waters.

Thanks to Online Poker Report, we now know that MGM filed paperwork with the Pennsylvania Gaming Control Board (PGCB) for all three categories of the remaining licenses.

The only other applicant from outside the state seeking PA interactive gaming licenses is Golden Nugget.

Unlike Golden Nugget, MGM wants to claim to all three of the $4 million licenses, which are online slots, online table games, and online poker. Golden Nugget wants table games and slots, but no poker.

MGM previously tried to buy Sands Bethlehem

This actually isn’t the first foray MGM has made into PA gaming.

Back in 2017, the casino conglomerate attempted to buy Sands Casino Resort Bethlehem for $1.3 billion.

But that deal fell through, leaving MGM to seek other avenues of entry.

One such path involved partnering with Boyd Gaming on online gaming initiatives.

In New Jersey, MGM has already launched playMGM-branded online casino and online poker sites. This came not long after MGM took full control of The Borgata Hotel Casino & Spa.

MGM is also rumored to be a potential suitor for Stadium Casino in PA, which is still in the process of being built. And while there’s no confirmation either way, it’s probably safe to say that MGM is serious about joining the PA gaming push.

Whether or not that includes a physical casino presence remains to be seen.

What happens with the leftover licenses?

Somebody’s going to lay claim to these someday, we swear.

For a quick recap, here are the licenses remaining up for grabs:

  • 3 for online slots
  • 3 for online table games
  • 5 for online poker

The PGCB opened an exclusive window for qualified gaming entities (QGEs) from outside PA to apply for the available licenses.

That deadline passed on Oct. 31.

As of now, there are still no PA sports betting licenses available to these QGE applicants.

With only MGM and Golden Nugget applying, they should each be able to get all the licenses the want, pending PGCB approval.

The earliest we can expect news on that front is Nov. 28, which is when the next PGCB meeting will be held. 

If MGM Buys Sands Bethlehem, It’s Not Going To Be A Fast Process

The fact that MGM Resorts International has a deal in place to buy Sands Bethlehem is not a secret. When it will be complete? That’s difficult to answer.

The fact that MGM Resorts International has a deal in place to buy Sands Bethlehem is not a secret.

But the part of the equation we don’t know: When will the deal will close? The short answer: We might not know for months.

The sale of Sands Bethlehem won’t happen quickly

A new report from WFMZ-69 broke down what exactly happens in Pennsylvania when a casino is sold.

Not surprisingly, it’s not a simple process. Anything that involves the transfer of a gaming license will get thorough vetting — even with a company as widely respected and regulated as MGM.

Doug Harbach, communications director for the Pennsylvania Gaming Control Board, did not get into specifics on the deal, which isn’t complete. But he did talk with WFMZ in broad strokes about what would happen if the sale takes place:

“They need to petition the board for what’s called a change of control,” said Harbach. “From there, our investigative unit will do work on the new potential holder of that license, in this case it would be MGM.”

Because MGM does not operate any casinos yet in Pennsylvania, the process would take longer.

“You’d be starting from the ground up,” said Harbach.

Harbach concluded that six months could be a likely timeframe, once the process actually starts.

MGM expanding its East Coast footprint

If MGM does come to PA, it’s the latest signal that it wants to make its presence felt on the Eastern seaboard.

Some of the other MGM moves of late:

Perhaps too late for helping PA online gambling

The presence of Las Vegas Sands Corporation in the state has hampered efforts to legalize PA online casinos.

Sands’ CEO, Sheldon Adelson, is vehemently opposed to online gambling of any type, anywhere. His company’s stake in Sands Bethlehem has allowed him to push back against the possibility of online gambling in PA as a casino owner in the state.

While Sands still has interest in the state, its lobbying will still have some pull. However, if it’s clear the sale will go through during ongoing gambling talks in the state, the chances of online gambling likely increase. MGM would be a willing participant in iGaming, instead of an opponent, and online gambling could use all the help in can get in the statehouse.

Sands Bethlehem Sale Could Shift PA Online Gambling Legalization Opinions In Major Way

If the proposed sale of Sands Bethlehem Casino to MGM goes through, it would remove one of the only roadblocks opposing online gambling legalization.

Las Vegas Sands reached an agreement to sell the Sands Bethlehem Casino in Pennsylvania to MGM Resorts International.

The sale could have wide-ranging implications. The proposed $1.3 billion deal would not only have a major impact on land-based gaming in Pennsylvania. It could also be the final nudge the state needs to pass a bill legalizing PA online casinos.

Why the Sands Bethlehem matters for iGaming

Las Vegas Sands is adamantly opposed to online gambling. Unsurprisingly, state Sen. Lisa Boscola was one of the most skeptical lawmakers at a recent hearing on online gambling legalization. Her district includes Sands Bethlehem.

Of note, the other voice of opposition at the hearing was Sen. Robert Tomlinson, whose district includes Parx Casino. That’s the other Pennsylvania casino operator that opposes online gambling.

These lawmakers aren’t necessarily in cahoots with casino operators. But casinos are often the largest employers and economic drivers in the lawmakers’ districts. Therefore, their position on pertinent issues is important.

If MGM replaces Sands, the online gambling opinions of Boscola and other lawmakers in the vicinity of Sands Bethlehem are likely to evolve.

“It definitely changes the online gaming landscape a bit,” said state Rep. George Dunbar, the vice chairman of the House Appropriations Committee, in an interview with The Morning Call. “Some members could be swayed by a change, if it happens. Things are going to get interesting.”

In the same column, Sen. Pat Browne said, “If I’m going from an operator that thinks iGaming is dangerous to its business model, to one that uses it to build brand, it absolutely changes things.”

Sands opposition to online gambling has been unwavering

Sands didn’t testify at the hearing. But the casino’s parent company and its chairman, Sheldon Adelson, have made their position perfectly clear.

In 2013, Adelson famously told Forbes he would “spend whatever it takes” to stop online gambling in the US.

Soon thereafter, the Coalition to Stop Internet Gambling lobbying group was formed — widely believed to be funded by Adelson — and prohibition bills were introduced in Congress.

At a June 2015 hearing in Pennsylvania, Las Vegas Sands Senior Vice President of Government Relations and Community Development Andy Abboud submitted the following testimony:

“We are opposed to internet gambling… because of the negative effects internet gambling would have on employment and investment in Pennsylvania, and on its families and children and because of the threat it poses to the public interest.”

[…]

“The Las Vegas Sands stand in opposition to internet gambling in Pennsylvania and across the country, because internet gambling is bad for Pennsylvania jobs, Pennsylvania families and brings the wrong element to Pennsylvania gambling.”

And last year, Sands Bethlehem President Mark Juliano submitted similarly worded testimony:

“Las Vegas Sands testified last year before this committee in full opposition to internet gambling and this position has not changed. Internet gambling is a job killer that seeks to move jobs from casinos in Pennsylvania to server farms in foreign countries.”

Meanwhile, MGM embraces online gambling

On the other hand, MGM sees things differently, viewing online gambling as a driver of growth and reinvestment.

MGM already offers online gambling in New Jersey, through Borgata. It plans to launch an MGM-branded online gambling website in the near future.

In 2016, MGM praised legislative efforts to bring online poker to New York:

“This legislation recognizes that millions of New Yorkers play online poker on unregulated and unprotected off-shore poker websites that operate with no oversight, fraud controls, or age restrictions.

“We applaud the Senate Finance Committee’s vote to create a safe, legal environment for online poker through legislation that will generate tens of millions of dollars in revenue for taxpayers, and create open and fair opportunities for all providers of online poker.”

Final thoughts on Sands and online gambling

The sale of Sands would cause a dynamic change in Pennsylvania’s support and opposition coalitions.

Casinos opposing online gambling currently number just two (against 10 in support), but they are the two largest casinos in the state — Parx and Sands.

If Sands is sold to MGM, the opposition not only loses half its strength, but it would be transferred to the already significant support coalition.

Furthermore Boscola’s skepticism could quickly shift to cheerleading for online gambling if the casino in her district becomes an MGM property.

While Sands’ brass has cautioned that too much gambling expansion could lead to less investment in its Bethlehem property, online gambling would ramp up MGM’s willingness to invest.

MGM Chief Shares His Thoughts On Regulated Online Gambling, DFS

This week MGM and AGA head Jim Murren spoke to the press, and his comments on the future of regulated online gambling in the U.S. have garnered attention.

MGM Resorts CEO Jim Murren, who also happens to be the Chairman of the American Gaming Association (AGA), made several interesting comments about the future of gaming during a press briefing in Washington DC on Wednesday.

During his remarks Murren touched on three hot-button issues in the gaming industry:

  1. Online gambling
  2. Daily Fantasy Sports (DFS)
  3. Casino expansion outside of Atlantic City

Murren on potential online gambling ban

The comment that will certainly grab the most headlines was Murren’s assertion, reported by Las Vegas Review-Journal’s Steve Tetreault, that an online gambling ban would not be ruinous to MGM.

Murren went on to say that online gaming is “convenience gambling,” adding that MGM is in the “resort-based” gaming business.

This statement will likely be unsettling to regulated online gaming advocates, who may take Murren’s remark to mean the company will not fully support regulation or will not oppose Sheldon Adelson’s proposed online gambling ban, the Restoration of America’s Wire Act (RAWA).

But that’s only one interpretation of Murren’s online gambling comments.

Another way to parse Murren’s words is online gaming is only a small piece of the company’s revenue stream at the moment, therefore the passage of RAWA wouldn’t have much of an impact on MGM’s bottom line.

While true, this thinking could also be seen as shortsighted, considering only 3% of the U.S. population has access to legal online gambling at this point.

MGM sending mixed signals on iGaming

At first glance it appears MGM is heavily invested in online gaming legalization in the U.S.:

  • MGM is already involved in the online gaming space through Borgata in Atlantic City, the highest revenue producer in New Jersey.
  • MGM has also applied for and received an online poker license in Nevada, but never launched an online poker site in its home state.
  • Additionally, the company is one of the driving forces (along with Caesars Entertainment) behind the pro-regulation lobbying group, the Coalition for Consumer Online Protection (C4COP), as well as the Let NY Play online gaming legalization campaign in New York.

However, a close look at the company’s actions and statements over the past two years indicates MGM is not as invested as it appears to be.

When you examine Murren’s current assertions on iGaming and his previous statements regarding the AGA’s withdrawal from the online gaming fight following the formation of a rift between its members, it appears the company is hedging its iGaming bets.

In March of 2014 Murren told the Las Vegas Review-Journal:

“I don’t want the AGA to find itself mired in a tremendous amount of controversy and infighting. I feel like the Internet has become too divisive a topic when there are so many other topics we want to put forward where we can all agree.”

Two months later the AGA withdrew its support of regulating online gaming, with AGA President Geoff Freeman echoing Murren’s comments from March:

“One of the things I’ve learned in this industry is we are extraordinarily competent at shooting at one another. The snipers in this industry are of the highest quality, and if you let that be the focus, we’ll kill each other.”

Murren reiterated the AGA’s position on the matter in comments yesterday reported by Politico:

“The AGA has stepped back from this topic,” Murren said. “It was becoming very divisive within our organization. There are very passionate and polarized points of view on this topic and for better or worse I, as chairman, decided that this was not a battle that we want to tear the AGA apart over.”

Murren on DFS

Another topic touched on by Murren was DFS, both in terms of the company’s potential plans for entering the DFS space as well as the questionable non-gambling classification of DFS.

During his remarks, Murren said the AGA is studying the DFS industry and trying to determine the best way for its members to get involved in the DFS industry. Murren stated they were also examining the potential legal can of worms DFS could open down the road.

On this latter point Murren was unambiguous.

“Clearly this cannot be ignored, and it is gambling,” Murren stated.

Murren’s point of view is that anyone who thinks DFS isn’t gambling is “absolutely, utterly wrong.”

“I don’t know how to run a football team, but I do know how to run a casino, and this is gambling,” he said.

According to Murren, because of conversations with regulators, MGM has decided to put its plans for DFS on hold for the time being.

This is an indication that the AGA and MGM feel DFS regulations are coming down the pipeline, something that would almost certainly upset the DFS apple cart.

Murren on Atlantic City monopoly

Murren also touched on Atlantic City’s recent troubles (MGM owns half of the Borgata), but expressed optimism for the city moving forward. “The worst, I think, is behind Atlantic City,” Murren said.

Murren went onto say that expansion outside of Atlantic City, in North Jersey, would help AC, and the MGM would be interested in developing in a North Jersey casino.

“The market opportunity up north is vast,” the executive, Murren said, “If that were to pass, MGM would be interested in pursuing it.”

Image Jason Patrick Ross / Shutterstock.com