Parx Casino Objects To Branded Skins In Pennsylvania

Parx Casino Objects To Branded Skins In Pennsylvania

Parx Objects to Online Gambling Skins in PA

Branded “skins” under a unified network or software provider has been a major component of online gambling over the last twenty years. The practice that was first popularized offshore, continued in regulated European markets and has subsequently spread into regulated online gambling in the United States.

But as Pennsylvania online gambling market gears up to begin accepting license applications in early April, at least one casino is lobbying for the state to limit the number of skins used. Pennsylvania’s largest casino, Parx Casino wants the Pennsylvania Gaming Control Board to limit the number of skins to one per license, rather than casinos subing out their software to additional operators. It’s an important decision that will likely be decided by the PGCB before final regulations are released.

In Pennsylvania, licenses are available to “internet gambling operators and “qualified gaming entities.” Pennsylvania legislation does not currently put a limitation on the number of skins that an operator under a license. Attorneys for Parx owners submitted a letter to the PGCB on January 30th expressing their desire for one skin per license. Parx is concerned that allowing skins would transfer responsibility from the PGCB to the operators saying the policy would “creates a sub-licensing regime that essentially transfers licensing authority from the PGCB to the Certificate Holder.”

The fear for Parx and other casinos such as Penn National Gaming, is that sub-licenses would be able to operate under a fraction of the cost of a full certification.

What are skins?

Online poker rooms and casinos that are skinned are essentially white label brands that use much of the software provider’s infrastructure. The software is usually similar with the same games offered. In addition, oftentimes casinos and poker rooms operate under a unified customer service and payment processing platform. The major difference between skins is the branding used by operators.

Some skins are owned by the software provider, the “flagship” of the site or by a totally different company. Because the skin uses existing infrastructure and technology, owning a skin can often cost a fraction of what “standalone” a poker room or casino, allowing the owner of the skin to be more efficient and other business needs such as marketing. To the customer it looks like a different casino or poker room.

Skins in New Jersey

In New Jersey, online gambling legislation allowed each licensee to have as many as five branded skins. A relaxed skin policy has played a part in New Jersey’s online casino growth, says Online Poker Report. The New Jersey market generates nearly $250 million in revenue per year.

The iDevelopment and Economic Association says that online gambling operators partly engage in self regulation that helps maximize operators maximize profit while collecting the most tax dollars. “Limiting skins would effectively pick winners and losers in the Pennsylvania market and hand the market to the state’s largest land-based casino operators (that are willing to enter the market).”

Limiting the number of skins per license could lower the ceiling for potential revenue generated by Pennsylvania online operators leaving some licenses even unclaimed.