July 15 Picked As Launch Date For PA Online Casino Gaming

July 15 Picked As Launch Date For PA Online Casino Gaming

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After a long wait, gamblers in Pennsylvania finally know when online gaming will arrive: July 15, 2019.

During a meeting on April 15, Executive Director Kevin O’Toole of the Pennsylvania Gaming Control Board (PGCB) announced that the board needed 90 more days to finalize regulations and procedures and then they would allow casinos to launch their online gambling operations.

It’s an auspicious time for online gaming in PA. If all goes well, Pennsylvania will (in less than 2 weeks) be the fourth US state with legal mobile sports betting. Also, in less than three months, Pennsylvania will be the fourth US state with legal online poker.

How did we get here?

In October of 2017, Governor Wolf signed legislation enabling a massive expansion of gambling in Pennsylvania. This legislation was created in hopes that the US Supreme Court would soon strike down a law that had prohibited sports betting throughout most of the country. Another piece of federal prohibition was removed when the DOJ (under the Obama administration) issued a revised opinion that narrowed the scope of the Wire Act. These changes created room for states to legislate gambling (both traditional and online) for themselves.

When, (in May, 2018) the US Supreme Court followed through as expected, Pennsylvania was well positioned to greatly expand gambling activity in the state. As well as online casino gaming, the new legislation also authorized for a new online lottery, satellite casino expansions, and sports betting (both retail and mobile).

Many PA casinos have taken advantage of the new situation. There have been several satellite casino expansions planned. Seven casino operators have opened sportsbooks (nine of them so far) with more coming soon. Ten casino operators have applied for online gaming licenses. Although many have been approved for these licenses for quite some time, it was unclear when the PGCB would allow them to launch their sites and apps. Now we know: July 15, 2019.

The lay of the (virtual) land:

All of Pennsylvania’s thirteen land-based casinos were eligible to apply for online gaming licenses. There are three different kinds: online table games, online slots, and online peer-to-peer gaming (poker). Each costs $4 million. Operators can also to buy the 3-pack for $10 million.

Of the ten Pennsylvania casinos that have applied for and received licenses to operate online slots and online table games, seven of these sprung for the license that allows for online poker as well.

Sports betting is covered by a completely different license that can also be had for $10 million. The Pennsylvania sportsbook market looks like this.

Of the thirteen total casinos, three (Lady Luck Nemacolin, Meadows, and Rivers Casino) opted against online gaming licenses. For one of these, Rivers Casino, there is no mystery. The owners can simply use the license of their sister casino (SugarHouse) to operate state-wide. There’s nothing so special about the Rivers brand that is worth paying double.

What about the other two casinos? We can only speculate. Perhaps their owners concluded that the steep license fees and state taxes that accompany the privilege of legal online casino gaming were too high for them to overcome.

The PGCB created 36 different online gaming licenses for thirteen PA casinos. Since some went unsold, the PGCB decided to seek other buyers. They created a new category of casino operator called Qualified Gaming Entities (QGEs) and invited outside operators to apply for this designation and apply for the “left-over” licenses. Two well-known casino operators (Golden Nugget and MGM) stepped up and will soon be offering online gaming in Pennsylvania.

The return of online poker to Pennsylvania

Online poker was popular all across the US since its inception in the late 1990s. That all ended when the US Government effectively destroyed US online poker in April, 2011. Since then, legal online poker options for US players have been sparse. Nevada and New Jersey have some very small intra-state sites and there have been some movement towards merging player pools between states. Even so, compared to the bustling online poker market that existed in the US prior to “Black Friday”, it’s been a virtual ghost town.

Unsurprisingly, the opening of Pennsylvania’s online poker market is highly anticipated. Here’s what we know about it so far:

What about the DOJ and that pesky Wire Act?

It’s overwhelmingly obvious that legalized gambling, in both live and online versions, is coming to many states in the US in the very near future. Many are concerned that the current DOJ (under the Trump administration) might try to hold back this welcome tide. So far states don’t seem to be buckling under the threat, in fact some are drawing lines in the stand and getting ready for a fight for federalism and decentralized control over this issue.

Pennsylvania is involved with a federal court proceeding in New Hampshire that is challenging the new DOJ “interpretation” of the Wire Act. Further, The PGCB has publically announced it will move forward despite the DOJ’s new hostile posture. New Jersey isn’t blinking in the face of federal hostility either. The states want this.

The gambling public wants it too. A whole lot is riding on the outcome of this decision.

At least part of this problem might be overcome by technology. Casino operators may avoid legal trouble from the Feds if they can successfully confine all online activities (including servers and payment processing) within the borders of their respective states. The Wire Act wouldn’t apply.

Poker players sick of intra-state player pools (or no pools at all) are particularly vulnerable to Wire Act interpretations.It is essential for the health of online poker that state player pools be merged together. The number and variety of poker games available to players is severely restricted if they can only play against people residing in the same state.

Hopefully the DOJ has a change of heart and steps out of the way.