MGM Will Soon Enter The PA Online Gaming Market

MGM Will Soon Enter The PA Online Gaming Market

Here comes the lion

According to paperwork recently submitted to the Pennsylvania Gaming Control Board (PGCB), MGM Resorts is applying to enter Pennsylvania’s online gaming market in as expansive a way as it possibly can.

How the door to this opportunity was opened

Pennsylvania recently created 39 new online gaming licenses. These consisted of three different types of license (online slots, online table games, and online poker) available for each of Pennsylvania’s thirteen casino operators. The licenses cost $4 million each, though casinos could pay $10 million for all three bundled together.

Most of PA’s casinos leapt at the opportunity, grabbing all three of the licenses. There were some holdouts though. Lady Luck Nemacolin, Rivers Casino, and The Meadows decided not to apply and Presque Isle Downs opted for online table games and online slots only.

That left the PGCB holding ten online gaming licenses, which they decided to offer up to Qualified Gaming Entities (QGEs). MGM Resorts appears to be the first of these to jump into the ring and they aren’t holding back. They are applying for all three types of online gaming license.

MGM very likely to be approved

MGM Resorts is a very successful casino operator with a long history of responsible gaming operations all over the map. Their size and stature in the industry makes the approval of their application almost certain, so long as too many QGEs don’t enter. If that were to happen, the PGCB will use a lottery-style drawing to determine who may purchase the licenses.

MGM Resorts submitted this application using Borgata Resort and Casino’s New Jersey license. This is likely because the playMGM brand of online gaming is already operational in New Jersey. There is also a sports betting app available under this brand – a fact that may become germane in the very near future.

MGM has been seeking entry into PA

MGM had to wait until other operators passed on these online licenses and application was open to outside QGEs like themselves because MGM currently has no physical presence in Pennsylvania.

That’s not for a lack of trying. In 2017, MGM was close to sealing a deal to buy Sands Casino Resort Bethlehem for $1.3 billion. Unfortunately for them, the deal collapsed and now Wind Creek Hospitality (an affiliate of the Poarch Band of Creek Indians) has stepped into their place. Their own $1.3 billion deal to buy the property is currently being finalized with all three PA online gaming licenses attached.

MGM wasn’t ignoring other avenues for entry into the emerging (and sizable) PA gaming market. They recently struck a deal with Boyd Gaming to share online gaming opportunities across the US. Boyd, in turn, recently finalized its own purchase of a Pennsylvania gaming operator, Valley Forge Resort Casino.

As if that weren’t enough, MGM is also reported to be a potential suitor to buy the not-yet-constructed Stadium Casino in Philadelphia. If sold, this casino-to-be would also come with all three of the state’s online gaming licenses.

With any one of these paths to online gaming, MGM Resorts would become a player in the state. If they succeed with two (or even three) of these efforts, they will be a major operator in the region – perhaps the biggest.

Seven more licenses remain. Who will step up and take them?

Assuming MGM follows through and is approved, the PGCB still has seven online gaming licenses left:

  • two for online slots
  • two for online table games
  • three for online poker

So the question remains: who wants these presumably lucrative licenses? It was long assumed that MGM would want to enter the Pennsylvania market. Other possible applicants for licenses could include other Nevada casino operators, other New Jersey operators, online gaming companies like FanDuel and DraftKings, as well as many others possible entrants.

Is the price too high?

Given that three of the casino operators that were given first dibs on these licenses and declined to partake, the question arises: why? It is certainly conceivable that the high license fee(s) might have played a role.

Perhaps more prohibitive and disincentivizing is the tax rate that comes along with the licenses. PA is set to have extremely high tax rates compared to other jurisdictions in the US (as well as the rest of the world). Online slots will be taxed at 54%. Online table games and poker will be taxed at 16%. Online sports betting (a different license entirely) will be taxed at 36%.

It could (and has been) argued that these rates are cripplingly high and preclude profitability. If that’s the case it would be a shame. Online gaming is entertaining for customers and lucrative for operators and tax jurisdictions. It would be very unfortunate if short-sighted greed from the state were to destroy a big win-win-win opportunity in Pennsylvania.

When will it all go online?

Online gaming in Pennsylvania won’t be available anywhere until the end of 2018 at the earliest, and Pennsylvanian’s may have to wait until the first quarter of 2019 to legally gamble online.

So what to do now?

Those who just can’t wait might consider looking at Pennsylvania’s online lottery. It’s legal, quick, fun, and easy to use. You can bet and win real money. Best of all, it’s up and running now.

There are some excellent bonuses available now too. Enter bonus code: WINNER to receive $5 free to play. Also, first time depositors receive a matching deposit bonus of 50% up to $50 if they use bonus code: DEP50 when depositing.

Maybe it’s not quite as exciting as legal online slots, table games, poker, and sports betting, but the PA iLottery is here right now and these bonuses are quite attractive to those interested in playing.