Legal Turmoil Remains as Pennsylvania Online Gambling Launch Looms

An unsettled legal situation remains active in Pennsylvania just days before the official July 15 launch date for one or more of the state’s casino-operating online gambling sites. Parx Casino and others will likely serve up casino-style games on July 15 or shortly thereafter — online poker in Pennsylvania will arrive weeks or months later — but there’s still the legal issue surrounding the Keystone State’s online-lottery offerings, which the very same casinos have asserted have been illegal all along, in part because they mirror prominent slots-based titles that are likely to be offered by the casinos’ online sites.

The matter continues to be argued in a Commonwealth Court, Pennsylvania technically being a “commonwealth” and not a “state”, and a decision on a motion for an injunction stopping the sales and operation of Pennsylvania’s iLottery offerings is scheduled to be delivered by July 15, coincidentally the same date as the official online-casino launch.

pennsylvania lottery ilotteryBesides Parx, the six other Pennsylvania casinos seeking an injunction against the state’s iLottery offerings are Hollywood Casino at Penn National Race Course, Harrah’s Philadelphia Casino & Racetrack, The Meadows Casino Racetrack Hotel, Stadium Casino, Valley Forge Casino Resort, and Mohegan Sun Pocono. All of these properties are among those already approved by the state to conduct online operations.

According to recent PennLive updates on the legal battle, the casinos continue to pursue claims that the iLottery offerings are really slot-style games in disguise, and are thus illegal offerings. The casinos’ arguments include:

  • At least nine iLottery games have the same titles and / or themes as slot machines offered on Pennsylvania casino floors, or online casinos in other states.
  • iLottery games have an average payout of 85 percent, which is the minimum payout percentage for Pennsylvania’s slot machines, whereas the minimum payout percentage for traditional lottery games is 40 percent.
  • Some of the games are offered in nickel or dime denominations that are typical for casinos but not any other Lottery products.
  • The state Department of Revenue, which oversees the Lottery, required that its game supplier agree not to sell the same games to Pennsylvania casinos, effectively admitting iLottery games are, in fact, casino games that would otherwise be sold to and offered by casino operators.
  • At least 22 of the iLottery games are certified for compliance with casino gaming standards in other jurisdictions, including the United Kingdom’s Gambling Commission and New Jersey’s Internet and Mobile Gaming regulations.

— Source: PennLive

The casinos are also irate over the Pennsylvania iLottery allowing ticket sales to gamblers age 18 and up, while their own soon-to-debut products will carry an age-21 minimum.

“The actions of the Pennsylvania Lottery are illegal,” casino coalition spokesperson David La Torre previously stated to several Pennsylvania mainstream outlets. “To make matters even worse, the agency is promoting casino-style gambling to teenagers. Pennsylvania casinos must follow very stringent regulations on underage gaming or face millions of dollars in fines. Meanwhile, the Lottery is openly violating the law and marketing these games to anyone as young as 18. Not to mention, any loss in casino revenue will hurt Pennsylvania’s tax collection for property tax relief and local improvement projects funded by gaming tax dollars.”

There’s home team, and then there’s home team. Despite the casinos offering several sound legal arguments, the betting line is that the upcoming ruling will still find some way to allow the iLottery to continue its current offerings undisturbed, so as not to trouble a revenue stream going directly to the state. Whether some mootness argument is also tossed into the mix, due to the launch of the casinos’ own online products, could occur as well. Such a mootness argument shouldn’t apply, but in situations such as this, the playing field is rarely level.


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