pennsylvania gaming control board license

Three Casinos Issued Online Gambling Licenses in Pennsylvania

My fourth grader has a vocabulary quiz on Friday and one of the ten words he needs to know is “gradually”. When quizzing him before bed, I had him use it in a sentence. He said, “The snail gradually made his way across the street.” Solid, but perhaps his teacher would be more impressed with his depth of knowledge if he wrote, “The online poker industry in Pennsylvania is gradually becoming a reality, as three casinos have finally been granted licenses.”

She would also question what in the hell I am teaching him at home; he said he wants to learn how to play poker, which… math skills?

Pennsylvania StampOn Wednesday, the Pennsylvania Gaming Control Board announced that it has approved the interactive gaming licensing applications of three casinos: Harrah’s Casino Philadelphia, operated by Chester Downs and Marina, LLC, Parx Casino, operated by Greenwood Gaming & Entertainment, Inc., and Mount Airy Resort Casinos, operated by Mount Airy #1, LLC.

Each of the casinos has been granted all three internet gaming licenses for which they applied: poker, table games, and online slots.

Gaming Software Deals Lined Up

All three casinos have nailed down partnerships with online gaming software providers. Parx is paired with GAN. Harrah’s, which is owned by Caesars, will be working almost certainly with 888, as Caesars already does so in New Jersey and Nevada with WSOP.com. As Caesars and 888 will want to grow their interstate network (Pennsylvania online gambling law permits this), it would only be natural for them to keep the ball rolling in the Keystone State, regardless of whether or not the WSOP brand is used.

Mount Airy is an interesting one. It already had a partnership with 888, but it made big news last week when it announced that PokerStars will be the one to provide its poker, casino, and sports betting products. Mount Airy isn’t nearly as big as some of its competitors, but it has shown that it intends to be a major player in the online gaming realm, working with the most recognizable name in the industry. This is also significant because it means that there will be at least one interstate network competitor to Caesars/WSOP/888. PokerStars is the second largest online poker site/network in New Jersey, but lags way behind WSOP/888 because it has no presence outside of the state. Adding Pennsylvania will boost PokerStars’ U.S. numbers, giving a second solid option to New Jersey and Pennsylvania players.

The casinos had to pay a $10 million application fee for the three licenses combined. A total of nine casinos submitted applications for all three licenses by the July 16th deadline. The other six are as follows:

Sands Casino Resort Bethlehem
Hollywood Casino at Penn National Race Course
Valley Forge Casino Resort
Live! Hotel and Casino Philadelphia
Rivers Casino
Sugarhouse Casino

It Ain’t Cheap

Those who applied by the deadline were able to lock in the $10 million price tag. There are a dozen casinos in Pennsylvania (counting Live!, which hasn’t actually opened yet) and thus there are a dozen licenses available. The three casinos who did not meet the deadline still have the option to file applications, but they will need to play $4 million for each one, up to the $12 million total for all three.

Presque Isle Downs recently exercised this option, applying for only online slots and online table games, but not online poker.

When the online gaming legislation was passed as part of a larger gambling expansion bill last year, it was feared that few or even no casinos would apply for licenses. Not because they weren’t interested – they very much are, as we can see – but because of the steep price. The application fees themselves are quite expensive, but it is the tax rate on online slots that made jaws drop. Operators will be taxed 54 percent of their slots gross gaming revenue, the same rate that brick-and-mortar casinos pay. They will also be levied a 2 percent local tax. And though the land based casinos pay the same rate, the difference there is that land based casinos have other revenue streams liker restaurants, hotels, entertainment, and shops. Online casinos don’t have that, so it was feared that the price would keep operators away.

The online poker and online table games tax rate of 14 percent plus the 2 percent local tax is much more palatable.

The Gaming Control Board said it will continue to review applications at its September and two October meetings. The next meeting is scheduled for September 12th. No date has been set for when online gambling will actually launch in Pennsylvania.

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