Churchill Downs Diving Headfirst Into PA And NJ Online Casino, Sports Betting

Churchill Downs is about to make a big splash in the legal and regulated online gambling and sports betting markets in both Pennsylvania and New Jersey.

Churchill Downs is about to make a big splash in the legal and regulated online gambling and sports betting markets in both Pennsylvania and New Jersey.

The Louisville, Kentucky racing and gaming giant, best known as owner and operator of The Kentucky Derby, announced its entry into the markets this week through a pair of partnership agreements.

First, Churchill Downs inked a strategic partnership agreement with SBTech to use SBTech’s integrated technology platform for both its online gambling and sports betting operations.

According to a press release from Churchill Downs, SBTech will provide the company with an online gaming and sports betting software platform. This includes a website, mobile apps, and back-office systems.

Churchill Downs says the partnership is initially intended to enable it to enter online gambling and sports betting markets in both Pennsylvania and New Jersey. Both states have already approved online gambling and sports betting.

Pennsylvania is in the middle of setting up the regulatory framework for both markets.

New Jersey has had legal and regulated online gambling since 2013. It is currently setting up regulations for its sports betting market. New Jersey is expected to be the first new state to accept legal sports bets. This following the US Supreme Court decision this week repealing a federal ban on sports betting.

Of course, Churchill Downs is already in the online gambling sphere. However, it’s online horse race wagering site will continue to run separately from its new SBTech sites.

Churchill Downs in PA

Churchill Downs announced in March it planned to purchase Presque Isle Downs & Casino in Erie with an eye on the burgeoning PA online gambling market. In fact, Churchill Downs CEO Bill Carstanjen said the reason it acquired Presque Isle was to get a foothold in Pennsylvania where online gambling legislation just passed.

Presque Isle Downs & Casino features:

  • 1,600 slots
  • 32 table games
  • A poker room
  • Thoroughbred racing on 100 dates annually

Currently, only the 13 PA casino license holders can apply for online gambling licenses in the state. Licenses are being made available in three categories including online slots, online table games, and online poker.

Churchill Downs and Golden Nugget Atlantic City

In New Jersey, Churchill Downs has also inked an agreement with Golden Nugget Atlantic City. It plans to enter into the NJ online gambling and sports betting markets under Golden Nugget’s license. Churchill Downs is awaiting new sports betting legislation and online gambling license approval in the state first. However, it is planning to launch both operations in the first quarter of 2019.

Carstanjen said Churchill Downs is eagerly anticipating entry into both NJ markets:

“We are looking forward to offering integrated iGaming and sports betting products in New Jersey. We have the unique opportunity to leverage our knowledge and experience operating the largest legal online horse racing wagering business in the U.S. as we enter the iGaming and sports betting markets.”

Online gambling has already been a huge success for Golden Nugget Atlantic City. It’s own online casino site has the largest selection of games in the market. Plus, the Betfair and PlaySugarHouse NJ online casino sites run under its license. Together, the Golden Nugget site are the runaway revenue leader in NJ online gambling. In fact, they are pulling in more than $7 million a month.

Golden Nugget’s Senior Vice President and General Manager of Online Gaming Thomas Winter welcomed Churchill Downs aboard:

“We welcome Churchill Downs, a respected US gaming operator with online wagering experience, to New Jersey. The addition of their offering will allow Golden Nugget Atlantic City to cater to an even larger demographic of New Jersey online players.”

More Skins Limitations In PA Could Prevent Online Gambling Growth

Skins continue to be a major sticking point in the current creation of regulations governing online gambling in Pennsylvania, with most experts agreeing any limits and limitations will hurt revenue.

Skins continue to be a major sticking point in the current creation of regulations governing online gambling in Pennsylvania.

Online gambling was approved as a part of a comprehensive gambling expansion package passed by the state in October 2017. Since that time, the Pennsylvania Gaming Control Board (PGCB) has been creating regulations to govern online gambling operations in the state and fine-tuning its licensing process.

The first sets of regulations related to online casinos and online poker in PA did not address whether there would be a limit on the number of online gambling websites, otherwise known as skins, licensees can launch under a single license.

New Jersey limits the number of skins allowed under a single internet gambling licensee to five. Experts claim this has helped maximize revenue for both operators and the state. However, representatives from PA’s top-grossing Parx Casino, and Hollywood Casino at Penn National Race Course, still asked gaming board officials to limit the number of skins in PA to as little as one.

This appeared to be an effort to prevent online gambling from eating away at existing land-based casino revenues. Even though most in the industry believe allowing multiple skins will be good for the casino industry as a whole, helping grow revenues online and off.

Addressing the skins issue

At the beginning of April, the PGCB’s Executive Director Kevin O’Toole finally updated its temporary regulations to address the skins issue.

According to O’Toole, there will be no limitations on the number of skins a licensee may employ. However, branding must make it clear which licensee each skin is operating under.

No other state where online gambling has launched has used this stipulation. Plus, even further, never-before-seen limitations are also being placed on PA online gambling licensees when it comes to skins.

One of these regulations will limit players to a single account per operating platform. Even if there are multiple skins operating on that platform.

It has not been determined how this regulation will be implemented. However, it appears players will only be able to create one account with each license holder in the state, and use it on all skins operating under that licensee.

Limitations on skins may equal limitations on revenue

This may not be an issue from a player perspective. However, industry analyst Steve Ruddock claims this and other regulations on skins will only hurt the local online gambling business.

Ruddock says much like high tax rates and a prohibition of online gambling at land-based casinos, how PA is handling the skins issue seems to be turning into a form of self-sabotage.

He claims that limits and limitations on skins only serve to:

  • Make PA a less desirable market for those interested in launching a skin
  • Prevent the industry from reaching its revenue potential
  • Lead to higher operating costs
  • Present fewer choices for consumers
  • Lead to less money spent on marketing
  • Prevent competition and innovation
  • Cost the state millions in licensing fees

On the other side of the coin, Ed Andrewes, head of Resorts Casino’s online operations in New Jersey, says New Jersey proves multiple skins are necessary to create a competitive marketplace. One that also provides an incentive for operators to spend money on marketing.

He also says operators who think limiting skins will save them money on marketing costs must understand that a less money spent on marketing only leads to less growth in the market as a whole.

PGCB is still in the process of defining online gambling regulations for the state. However, PA casinos started applying for online gambling licenses beginning April 16.

PA Online Casinos Will Have Limited Skins…With Some Limitations

The PA Gaming Control Board recently released temporary regulations for online casinos, including a ruling on skins, which will be unlimited but feature the host casino’s branding.

For the past two months, Pennsylvania casinos and their iGaming partners waited patiently for a clarification on the all-important matter of “skins“, a term that refers to how many iGaming websites one casino can operate under a single license.

Parx Casino argued that casinos should only have one site per license. Meanwhile, global iGaming firm 888 argued that PA casinos should be able to feature multiple sites under one license.

This past week, the Pennsylvania Gaming Control Board (PGCB) provided clarity on the matter via a press release.

PGCB Executive Director Kevin O’Toole addressed the issue as part of the board’s update of its temporary regulations governing iGaming when it launches later this year:

“Under these temporary regulations there is no limitation on the number of skins that a slot machine licensee may employ to deliver games, but every ‘skin’ that a casino offers must be branded in a manner that makes it clear that it is offered on behalf of the slot machine licensee consistent with language of the act.”

PGCB statement is clear…to a certain extent

O’Toole’s quote would lead one to believe that Pennsylvania casinos could operate multiple iGaming websites with a single license.

The phrase “no limitation” is the driving force here. At first read, it seems to indicate that Pennsylvania’s online gambling industry could resemble what we see in New Jersey. In the Garden State, casinos can operate up to five casinos with one license.

However, the confusion comes later in the quote when O’Toole says that the site must clearly present the licensee’s branding. In other words, an online gambling website run under Mount Airy’s license must feature Mount Airy’s branding.

Websites could feature dual branding

The “must be branded in a manner that makes it clear that it is offered on behalf of the slot machine licensee ” phrasing presents a sort of hybrid skins model. Under this, a casino can run multiple sites as long as those sites reflect the casino’s branding.

The reason this format could be considered a hybrid is because it makes a nod to Parx’s argument that the site should only push the casino’s brand. However, it also considers 888’s argument that a casino should be able to operate multiple sites and leverage its partner’s brand power.

In a practical sense , this most likely would result in URL’s that would feature both the casino’s name and the operator’s name. For example,

For comparison’s sake, New Jersey’s Golden Nugget Casino runs four online casinos via its one license. These are:


The first two domains are Nugget-centric. They feature the name of the casino and nothing else. The second two, and, feature URL’s that reflect the partner operating under Golden Nugget’s license.

Based on what O’Toole said in his “clarification” quote, there’s a good chance that we won’t see an URL mentioning only the casino’s partner’s name.

However, the PGCB hasn’t clarified this point. Ttherefore, nothing can be concluded with certainty.

GAN Shouts Out Pennsylvania In Earnings Report

Major online casino software company GAN readily admitted both their profits and their plans are tied to the launch of online gambling in Pennsylvania

GAN, the international B2B gambling supplier who currently offers games in Parx Casino, announced this past week that Pennsylvania’s expanded gambling regulation and future online gaming industry is part of the reason why the company had a promising first quarter in 2018.

What makes this past quarter so significant is that it’s the first time since 2013 that the company has posted gains before interest, taxes depreciation and amortization (EBITDA).

GAN provided the information in a summary of their quarterly earnings call. The summary included bullet-point highlights of positive developments as well as a lengthy quote from GAN CEO Dermot Smurfit.

GAN points to PA gambling expansion, Parx partnership

Much of what the company’s earnings report talked about was not related to Pennsylvania. It did make key mentions of what’s ahead for the Keystone State though.

Perhaps the most important mention came just before Smurfit’s comments:

“Preparations [are] underway for GAN to launch Parx Casino in Pennsylvania for Internet gaming with the Pennsylvanian Internet gaming market anticipated to commence in H2 2018.”

We know that applications for manufacturers, operators, and suppliers can be submitted to the Pennsylvania Gaming Control Board this month. Those submissions began on April 1. However, there has yet to be a firm launch date for online gambling in the state.

According to GAN’s earnings report, we can expect online gambling sometime between now and the end of the year.

The fact that these developments were mentioned in their earnings call indicates that they see PA as an important revenue stream, one that will make investors happy.

CEO sees PA online gambling as a massive opportunity

Smurfit made a point to note that the PA casino market has huge potential. After all, there are nearly 13 million people will be able to wager via the state’s online gambling launch. More from Smurfit:

“GAN has continued to position its business to capture growth in emerging online gaming markets in the US …  with a number of significant commercial and strategic developments the most significant of these was the passage into law of legislation on October 30, 2017 permitting 12.8m Pennsylvanian residents to play real money Internet casino games starting in H2 2018.”

It’s clear that GAN is excited about the potential that online gambling has in Pennsylvania. They say that the combination of their existing relationship with Parx and the upcoming online gambling launch makes GAN “positioned for substantial growth in regulated real-money Internet gaming in the US following the commencement of Pennsylvania’s Internet gaming market.”

A reminder that Parx is the largest and most successful casino in the state.


Gambling Bill Authors Declare Their Love For Unlimited Skins

While the PA Gaming Control Board debates how many skins online casinos should get, the bill’s authors clarify they never intended to limit skins.

If there was any confusion before this past week about online casino skins, Pennsylvania lawmakers cleared it up quick.

Reps. Jason Ortitay and Rosita Youngblood sent a letter to Pennsylvania Gaming Control Board (PGCB) Chairman David M. Barasch explaining the intent of the online gambling portion of the state’s gaming laws.

Ortitay, the man who sponsored the bill, did not mince his words when describing his position on whether or not multiple companies (skins) should be able to use a casino license to operate in Pennsylvania.

“I urge you to help our state further by allowing for multiple skins. After all, it is certainly within the purview of the Board to prepare for the future and to ensure all customers experience the best gaming environment possible,” Oritay wrote. “Limiting the number of skins in any regard would be an unconstitutional usurpation of the specific powers and authority of the legislative branch of Pennsylvania government.”

Letter adds clarity to debate between casinos

The matter of skins goes back to PA legislation about PA online casino licenses. As casinos explore new ways to generate revenue, utilizing their license to strike up partnerships with multiple online casinos — and, therefore — multiple iGaming websites — would generate income., a popular global online gambling operator who has a partnership with Mount Airy Casino, sent a letter earlier this month to the PGCB defending the right of casinos to hire multiple operators to run websites under one license.

Their argument focused on two main factors: the success of other markets who’ve allowed multiple skins and the brand power they can bring to Mount Airy.

To their first point, New Jersey is a sterling example of how multiple skins have worked well for land-based casinos. The state has 25 online casinos distributed across seven casinos. Borgata has 10 casinos under its license and Caesars/Harrah’s have a combined six sites.

Parx argued against skins

Before sent in their letter to the PGCB, Philadelphia’s Parx Casino voiced their support of limiting casinos to one skin per license, meaning each casino would operate one site that would implement the casino’s branding.

Parx’s argument took the side of Pennsylvania’s workforce, noting that allowing multiple skins would mean that companies that aren’t based in Pennsylvania would be able to make money from the contracts they have with PA casinos.

An influx of out-of-state companies would mean in-state candidates wouldn’t have the chance to get jobs in what will be a formidable new industry within state lines.

Parx’s objection to multiple skins has the support of Penn National, too, although, in light of the recent letter from Ortitay, it seems the two casinos will be in the minority.

Parx isn’t averse to being the squeaky wheel, though. They opposed the state’s gambling expansion bill, too.

As one of the state’s top-two revenue earners, limiting gambling to one skin would most likely benefit the casino because it would maintain a somewhat level playing field of revenue.

However, if multiple skins are allowed to exist, smaller casinos — and Parx’s Philly-area competitors — could boost their revenue by forming multiple partnerships. In theory, Parx could counter those moves by forming their own partnerships.

New PGCB Applications Available, But No Word On Skin Limits

The Pennsylvania Gaming Control Board announced this week it will begin accepting applications for interactive gaming platforms on June 4.

The Pennsylvania Gaming Control Board announced this week it will begin accepting applications for interactive gaming platforms on June 4. This Despite the fact the interactive gaming platform providers aren’t sure exactly what they will be applying for just yet.

Interactive gaming platform providers are not online casino operators. Instead, these are the companies that provide technology and software platforms for online casinos. Companies like Gamesys, GVC Holdings, NYX Gaming Group, and GAN have been providing software platforms for New Jersey online gaming sites since online gambling launched there in 2013.

Clearly, these tech companies will be applying for the right to provide software platforms for online casinos in Pennsylvania. It’s how many sites PA online casino license holders will be able to operate using these software platforms that are still in question.

PGCB approves online gaming regulations

The gaming board approved two sets of regulations related to PA online casinos and online poker last week. Missing was any language addressing whether or not there will be a limit on the number of online gambling websites licensees can launch. Multiple websites operating under a single license holder are referred to as skins.

New Jersey limits the number of skins allowed to operate under a single online gambling licensee to five. Experts say this has helped maximize both operator and state revenue from online gambling.

However, representatives from Parx Casino and Racing and Hollywood Casino at Penn National Race Course have told the board it wants it to limit the number of skins in PA to as little as one.

This appears to be a misguided effort to prevent the online gambling market in PA from cannibalizing the existing land-based casino industry. Misguided because most industry insiders agree that allowing multiple skins will be good for the entire industry and help revenue growth across the board.

Two PA lawmakers, Reps. Rosita Youngblood and Jason Ortitay, recently said legislators never had any intent on placing a limit on skins.

Skins question remains

PA casinos have been invited to apply for online gambling licenses beginning April 16. But with the licenses for online slots, table games, and poker costing $10 million for all three or $4 million separately, the casinos will want to know where the state officially stands on the issue of skins before applying.

The interactive gaming platform licenses come with a $1 million licensing fee attached. So, clearly online gambling software platform providers want an answer on skins sooner rather than later as well.

The board is planning to approve the third set of online gambling regulations at its next meeting on April 2. It is expected the skins issue will be addressed in these new regulations. Key players in the fledgling PA online gambling industry certainly hope so.

Gaming platform application a lengthy process

In the meantime, there’s time to pour over the extensive 59-page interactive gaming platform application. It’s currently available on the board’s website.

A document that size, and steps like fingerprinting and background checks to follow, suggest the process will be a long one.

The licensing process for online gambling operators will likely run into September. As a result, it initially appeared online gambling sites could launch in PA by the fourth quarter.

However, this June 4 deadline for interactive gaming platform licenses and the lengthy process to follow may change things. In fact, it may even push the state’s online gambling launch into 2019.

The Race To Get Online In Pennsylvania Starts April 16

The Pennsylvania Gaming Control Board will start offering online gambling license applications to state casinos beginning April 16.

Pennsylvania casinos can apply for the state’s first online gambling licenses beginning April 16.

The Pennsylvania Gaming Control Board (PGCB) announced Wednesday it will allow licensed Pennsylvania casinos to petition the board for Interactive Gaming Certificates for a period of 120 days beginning in Mid-April.

After obtaining the certificate, the casinos will be authorized to offer online gambling in three different categories. The categories include:

  • Peer-to-peer interactive games where players compete against other players, including online poker.
  • Non-peer-to-peer interactive games where players compete against dealers, including online blackjack and other table games.
  • Non-peer-to-peer interactive games which simulate slot machines online.

In the first 90 days, beginning April 16, existing Pennsylvania casinos can petition the board for an Interactive Gaming Certificates covering all three online gambling categories. These come with an authorization fee of $10 million.

From the 91st day until the 120-day licensing period is over, existing Pennsylvania casinos can petition the board for an Interactive Gaming Certificates covering one or more separate online gambling categories. The authorization fee for each is set at $4 million.

Qualified gaming entities next

Once the 120-day licensing period is over, other qualified gaming entities may apply for any remaining Interactive Gaming Certificates. However, each qualified gaming entity must be deemed suitable by the board first.

Pennsylvania law allows for the issuance of a total of 13 Interactive Gaming Certificates for each online gambling category. That makes for a total of 39 certificates.

The board’s Executive Director Kevin O’Toole addressed PA online gambling’s timeline during a recent House budget hearing. He said the board is in the process of crafting temporary regulations which will govern online gambling operations in the state.

The licensing process isn’t likely to conclude until September. Add that to the ongoing crafting of temporary regulations and it appears the first online gambling sites in the state won’t be up and running until the fourth quarter of 2018.

Who wants a PA online gambling license?

However, which existing PA casino operations are interested in offering online gambling in all three categories will be clear by July. Plus, it will be clear if existing casinos intend to snatch up all available licenses. Or, if outside entities will be allowed to enter the online gambling market in the state at all.

Most experts agree the state’s casinos are likely to apply for most, if not all, available licenses.

However, the state has yet to clarify whether it will limit the number of branded websites, or skins, online gambling operators can possess under each license.

A decision on the skins issue could have a significant impact on the number of casinos applying for licenses.

The board will meet again March 21 with the skins issue still unresolved.

Pennsylvania Takes First Small Step Towards Licensing Online Casinos

The regulatory and licensing process for online gambling in Pennsylvania begins April 2, but potential operators are still waiting for word regarding when they can apply for a license.

The regulatory and licensing process for online gambling in Pennsylvania is finally beginning.

However, potential operators are still waiting for word regarding when the Pennsylvania Gaming Control Board (PGCB) will begin accepting applications for iGaming operator licenses.

This week, the board announced it will begin accepting license applications for manufacturers and suppliers to iGaming operators on April. Additionally, the board will start accepting applications from truck stop Video Gaming Terminal (VGTs) manufacturers and suppliers on the same day. Truck stops wanting to offer VGTs can start turning applications in on May 7.

The board also says the acceptance date for applications for iGaming operators or platform providers will be announced later.

Internet gambling in PA

The state passed new gaming expansion laws in October 2017 that legalized three categories of online gambling. These categories include:

  • Non-banking table games, like poker
  • Banking games which simulate casino table games
  • Games which simulate slot machines

PGCB is developing the regulations and licensing process for internet gaming. However, a frequently asked questions document on the board’s website claims it is still in the first phases of a roll-out of internet gaming. There is no specific date when internet gambling will launch yet..

In fact, this announcement regarding license applications from internet gambling manufacturers and suppliers is the first sign the regulatory and licensing process is moving forward.

The applications have been made available on the PGCB website at

The application is nearly 60 pages. Additionally, there are supporting documents some applicants must fill out. Manufacturers currently licensed by PGCB are able to submit an abbreviated application.

The new gambling expansion legislation clearly states Pennsylvania’s existing casinos will get the first crack at applying for iGaming operator licenses. There are 13 licenses available.

In fact, PA casinos will have 90 days following the acceptance date for applications to apply for a discounted license to operate all three categories of online gambling. The discounted price is $10 million. After the 90 days is up the price will increase to $4 million per license.

Entities from outside the local casino industry can apply for any licenses that are available after the existing PA casinos get their shot.

Online gambling tax

In addition to the upfront licensing fees, the state is in line to collect a percentage of online gambling revenue once the market gets up and running.

The law specifies the following taxes on internet gambling operators and distribution of those funds:

  • 14 percent of internet table game revenues will go to the Pennsylvania General Fund.
  • 34 percent of internet slot machine revenues will go the Property Tax Relief Fund.
  • 13 percent of internet slot machine revenues will go the to the Commonwealth Finance Agency for county grants.
  • 5 percent of internet slot machine revenues will go to counties that see a decrease in local share assessment funds.
  • A local share tax of 1 percent of all internet gambling revenue will go to the license holder’s host county.
  • 1 percent of all internet gambling revenue will go the Commonwealth Finance Agency for county grants.