After more than a year of haggling over the details, the state of Pennsylvania passed online gaming, poker and DFS regulations for its citizens. While the passage of that bill was a watershed moment that brings to four the number of states with such legislation, the question now is when will it go live. State legislators are looking to move quickly on the issue, but will they have any suitors who will offer games in the state?
Passage of the bill only started the clock on how long it would take to get systems for online gaming and poker live in the Keystone State. Right now, the Pennsylvania Gaming Control Board is preparing the criteria that will be required for operators to be able to apply for a license inside the state. The PGCB has yet to announce that they have cleared that hurdle, even though they had more than a year to create the licensing process that they would go through.
Once the PGCB finally announces that they are prepared to accept applications, those companies that are already in the state will have first crack at the licenses. There will be three licenses offered – casino, slots and table games and poker – with companies that apply for all three licenses getting a discount at $10 million. If companies wish to apply individually for licenses, then each license would cost $4 million for each segment of the industry. The PGCB will accept licenses from qualified companies and operations that are already in the state for a period of 90 days.
Once that 90-day window has passed, then the PGCB will open the doors to companies outside the state. Over a 120-day span, companies that don’t already have a presence in the state of Pennsylvania will be able to apply for licenses at $4 million a pop (apparently they don’t get the “hometown discount” if they apply for all three). For those counting along, that is a time span of 210 days, or seven months, before just the licensing process is done. Since Governor Tom Wolf signed the legislation at the very end of October, the earliest that the licensing process can be completed would be Memorial Day 2018.
And that is just the licensing process. The act of getting the sites for the different companies to get up and running (and pass review by the PGCB) could take anywhere from 90 to 180 days. This additional time puts the first official bets in a Pennsylvania online casino or poker site in the neighborhood of the end of August 2018 to Thanksgiving 2018.
Another thing that might push the process forward faster is the money that is involved in the legislation. If Pennsylvania is able to accept licensing fees prior to July 2018, that money would go towards their budgetary needs for the current fiscal year. If they are not able to get the process completed before July 2018, then the online gaming industry in Pennsylvania would start off at an automatic deficit since money from the licensing phase has already been counted.
Then there is still the question of who will be taking part in the new Pennsylvania online gaming industry. While local casinos such as Parx Casino in Bensalem and Rivers Casino in Pittsburgh will be analyzing whether they’ll get in on the business, Harrah’s Chester (owned by Caesars Entertainment) has already indicated that they are going to be a major player in the game. For those outside of the Pennsylvania gaming industry, The Stars Group (PokerStars), 888 Holdings (888Poker, a partner with Caesars) and partypoker have already given signals that they will be ready when their time period opens.
One major news outlet is saying that isn’t a done deal, however. In a report prepared by Moody’s Investors Service, which provides financial bonds research for investors and other companies, the taxation rate for slots could scare off some suitors. At 54%, that is much higher than the rate for other states (New Jersey’s online slots are taxed at 16%) and could prevent companies from entering the market with a full roster of gaming services.
There are still plenty of questions regarding the Pennsylvania online gaming market and there are few answers coming from Harrisburg. The one thing that is known is that it won’t be anytime soon that the industry will open for business to Pennsylvanians.
