Pennsylvania Gaming Control Board

Pennsylvania Online Gaming Picture Continues to Develop

I am sitting here snacking on a bowl of leftover Halloween candy, which means the calendar reads November and we still don’t have any online poker up and running in Pennsylvania yet. I know I’ve been saying that Pennsylvanians will be playing online by the end of the year and I assure you… I am willing to back off of that statement. It will happen, though, and the good news is that the Pennsylvania online gaming picture is rounding into shape. So let’s take a look at where things stand right now, shall we?

The Established Casinos and Available Licenses

First, let’s go over what has happened up until the past week or so. The thirteen licensed casinos in Pennsylvania had first dibs on interactive gaming licenses. There were three types of licenses available: online poker, online table games, and online slots. The application fee for each license – just the application fee – cost $4 million, but if operators wanted all three, they could pay $10 million total by the July 16th deadline. The following casinos did just that:

Parx Casino
Harrah’s Philadelphia Casino & Racetrack
Mount Airy Casino Resort
Hollywood Casino at Penn National Race Course
Sands Casino Resort Bethlehem
Rivers Casino
SugarHouse Casino
Valley Forge Casino Resort
Live! Philadelphia Casino

Assuming all licenses are approved, that’s 27 licensing slots taken. Mohegan Sun Pocono submitted applications for all three licenses as well, but missed the deadline and paid full price. Presque Isle Downs Casino filed applications for online table games and online slots, but not online poker. Total licenses now up to 32 out of a possible 39.

BUT…Rivers Casino changed its mind and decided to focus on sports betting, so it withdrew its applications. Then, Live! Philadelphia Casino – which isn’t even finished being built yet – is going to be sold and has given back its online poker license.

So, that’s four fewer licenses taken, bringing the total granted/reserved to 28, leaving 11 remaining: five online poker, three online table games, and three online slots.

To this point, every casino that has applied for licenses has had them approved except for Mohegan Sun Pocono. One would expect Mohegan Sun to eventually get its licenses.

The Outsiders

As there were still licensing slots available after the Pennsylvania casinos did (or did not) submit their petitions, the application process was then opened up to operators outside of the state, dubbed “qualified gaming entities.” These qualified gaming entities had from October 15th through October 31st to submit their applications, just the same as the Pennsylvania casinos. One difference, though, is that the outside operators were not given any discount. It was $4 million per application fee.

Golden Nugget Atlantic CityAfter the all qualified gaming entities are approved, there will be a random drawing to determine which ones get the remaining licenses. There is good news on that front, however, as it looks like only two outside operators submitted applications: MGM and Golden Nugget. Thus, assuming no names pop up that we didn’t know about, both of them will get the licenses they seek, since there are enough left. Once the operators are chosen, they have 60 days to officially say, “Yes, we would really like to be licensed, please.”

MGM filed its application on Monday, October 29th, on the back of its Borgata bona fides in New Jersey. It applied for all three gaming licenses, paying $12 million for the privilege.

On Wednesday, the last day to apply, Golden Nugget threw its hat into the ring, filing petitions for online table games and online slots, but not online poker. This makes sense, as it does not have an online poker room in any of the three states that currently have legal, regulated online poker. It does, however, have a thriving online casino games business in New Jersey. Its internet gaming win in September 2018, according to figures published by the New Jersey Division of Gaming Enforcement, was $9.3 million. Borgata (MGM) was the next highest for the month with $4.6 million, and that included online poker.

The total internet gaming win in New Jersey for the month of September was $25.8 million, which meant Golden Nugget had more than a third of the market with seven total operators. It also made an enormous leap from the same period last year, growing its revenue by 62.6 percent.

Year to date through September, Golden Nugget has brought in $75.7 million in New Jersey, just about the same percentage of the state’s total as it did for the month.

This is all to say that Golden Nugget knows what it is doing and is likely looking at Pennsylvania was dollar signs in its figurative eyes. MGM is certainly no slouch, either, and is probably also looking to combine its New Jersey player traffic with that of Pennsylvania, if and when liquidity sharing happens between the two states.

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