PA Online Casino News And Updates

PA Online Poker: 5 Questions You’d Like Answered

The Pennsylvania Gaming Control Board (PGCB) just named July 15, 2019 as when Pennsylvania casinos can begin offering online gambling to the public. Casinos will host online versions of slot games, traditional table games, and peer-to-peer games, most importantly online poker.

Online poker was once a mainstay for US poker players who didn’t reside in Las Vegas or near another legal brick and mortar poker room. It began in the late 1990s and rode poker’s 2003 “boom” until its zenith (and demise) on April 15, 2011 when the US government effectively killed the entire industryThat’s when the DOJ seized the domains of online poker’s top operators and prosecuted many of their founders. Ever since online poker’s aptly named “Black Friday”, almost all activity in that market dried up and blew away. The only remaining online poker action is in the tiny player pools in intra-state sites that can still operate in Nevada, Delaware, and New Jersey.

This summer, Pennsylvania will be the fourth state to legally re-enter the online poker market and will be the biggest player pool in the country. It’s also the country’s 5th most populous state with 12 million people.

New Jersey is the top casino gambling market in the US right now, but PA should eventually surpass it in both handle and revenue. Other state legislatures are looking on with interest. If a big market like PA achieves success, it may prompt other states to likewise expand their legal gambling markets. For example, legal sports betting (both live and online) is rapidly expanding in the US and it’s natural for legislators to consider one as they consider the other.

So what will online poker look like when it comes back to PA?

Which sites will spread online poker?

Will the same brands that existed prior to Black Friday still be operating in PA upon the summer’s launch? Different ones? Who’s on deck?

So far, eight casino operators have received online poker licenses from the PGCB. Despite it’s 12 million in population, it is difficult to imagine eight separate poker sites thriving in this limited intra-state player pool. Even more potentially congesting, each license allows an operator to host as many skins (brands) as they like.

Here’s a list of the casinos currently holding an online poker license in PA:

Of course, we have no guarantee all of these casinos will launch online poker, but they have all paid for permission. Only time will tell which of them enter the market – and which of them survive.

Which online poker site will be top dog in PA?

To get a sense of what PA’s online poker market will look like soon, let’s look at neighboring New Jersey’s market right now.

Three of NJ’s online poker operators are likely to be important in the new PA market. These are WSOP (Harrah’s Philadelphia), PokerStars (Mount Airy), and MGM/Borgata.

MGM is unlikely to reign supreme in PA. In NJ they are the third most successful operator and MGM has no physical presence (or poker room) in the state. MGM became eligible to operate online gaming as a Qualified Gaming Entity (QGE) when the PGCB was unable to sell all the licenses they had created – these were intended for their local casinos.

What about the other two? Both are very well-known brands. PokerStars is the global leader in the field but that advantage doesn’t necessarily transfer in a ring-fenced market. WSOP is also a world-famous brand and now tops the online poker market in NJ. PokerStars used to be first, but lost the lead largely due to a player pool sharing agreement between New Jersey, Nevada, and Delaware that so far only benefits the WSOP brand. All else equal, players prefer playing in larger pools than smaller ones.

So will WSOP or PokerStars fight it out for dominance in PA?

Maybe, but there are two more contenders to consider. Parx Casino has been very active in the new expansion of gambling opportunities in the state. Parx also runs the busiest live poker room in the state (with 48 tables). This poker room controls roughly 30% of the live poker market. It wouldn’t be shocking if Parx Casino and their technical partner GAN do very well in PA.

The other wild card is PartyPoker, who has partnered with Valley Forge Casino. PartyPoker was well-known to players in the heyday of the US online poker market in the early 2000s. Also, Valley Forge is owned by Boyd Gaming, a veteran poker operator in both live and online settings.

How profitable will online poker be in PA?

Again, a comparison to New Jersey will be helpful to answer this question:

New Jersey online poker sites collected $2.8 million in rake during their first full month of operations – December 2013. Bear in mind; this was just two and a half years after Black Friday so online poker still had a strong buzz throughout the US.

Online poker revenues have slipped since then. This is likely due to being restricted to a much smaller pool of players than customers are accustomed to. Revenues are stagnant. Last month (and over 5 years later) NJ’s online poker sites collected just $1.9 million in rake. Annual figures reveal the problem: In their first post-Black Friday year of operation (2014) New Jersey’s online poker revenue $29.06 million. Annual revenues haven’t been that high since.

Again, this understandable. Small player pools lead to fewer games, fewer types of games, and less interest in playing them.

Here’s a revenue projection: PA’s first full month of online poker rake will probably be less than NJ’s opening $2.8 million number in December 2013. PA has a larger live poker market, but there are offsetting factors. Interest in online poker in the US has diminished since Black Friday. Also, mobile sports betting arrives in PA early in May and alongside online poker comes online slots and table games. These other gambling verticals will be competing with online poker for the attention, time, and disposable income of Pennsylvanians. For all these reasons, PA online poker’s revenues will probably be underwhelming, at least to start.

Despite this, eventually the Keystone State’s larger population of poker players won’t be denied and the PA market will surpass the declining NJ market. In time Pennsylvania will most likely achieve #1 spot in US online poker.

Will online poker be a boon or a blight to live poker in PA?

Live poker in Pennsylvania’s live poker market is sizable, but struggling. In 2018, the state’s ten land-based poker rooms dropped $55.69 million in rake. That’s a 6% decline from 2017, which itself was flat compared to 2016.

It’s not like the casino’s have abandoned live poker, either. Sands and Parx and Harrah’s recently revamped their live poker rooms but the changes had little impact. Could online poker help? It didn’t in New Jersey or Nevada. The addition of online poker (admittedly in ring-fenced fashion) did nothing to boost live poker games in those markets.

However, there could very well be synergies to be found between a casino’s live poker room and its online poker presence. Perhaps one of these Pennsylvania casino operators will figure out the technique that makes a harmonious marriage between the two forms.

Alternatively, adding online poker may lead marginal brick and mortar poker rooms in PA to close down. Presque Isle Casino and Mohegan Sun Pocano seem the most vulnerable to this outcome. Each is a smaller room, and neither bothered acquiring a license to spread online poker.

Merged player pools: Can’t we all just get along?

For people who love to play poker online, this is the most important question of all. Playing in a tiny ring-fenced player pool just… well… sucks. For players to remain interested in playing online in PA, an eventual merger of player pools will have to occur. Failing to do so will mean the same stagnant revenues seen in New Jersey and Nevada.

To begin with, PA regulators should seek to join the fledgling player pool sharing agreement (14 million players) between Delaware, Nevada, and New Jersey. Then they should seek to incorporate the 2 million potential players coming online when West Virginia legalizes online poker next year and also the 10 million eligible when Michigan follows in the very near future. Rinse and repeat until once again, US players can play with the entire globe of players.

One disastrous fly in this ointment is the DOJ’s new “interpretation” of the Wire Act. Pennsylvania regulators can’t even consider allowing gambling transactions that cross state lines until this new DOJ/Wire Act situation is resolved.

The issue is currently being argued in a New Hampshire court and many interested parties across the country are keenly observing. A lot is riding on the outcome. Unfortunately, the matter likely won’t be decided definitively until the US Supreme Court weighs in, and that could take a while.