Out-Of-State Casino Operators May Soon Offer Online Gambling In PA

Earlier this week, SugarHouse Casino and Hollywood Casino at Penn National Race Course became the 4th and 5th Pennsylvania casinos to be approved for online gaming in the state. Six other casinos have applied for online gaming licenses and await approval from the Pennsylvania Gaming Control Board (PGCB).

The two approvals were no particular surprise (none of the local applicants for online gaming licenses are expected to be rejected), but there was another interesting piece of news that came out of the meeting. Very soon, Pennsylvania online gaming licences will be offered up to out-of-state (even potentially out-of-country) “qualified gambling entities” (QGEs).

How did this come to pass?

When gambling was expanded via Pennsylvania’s landmark October 2017 legislation, 39 new online gaming licenses were created. This number was arrived at by multiplying Pennsylvania’s 13 existing casino operators by the three new types of licenses available to each (online slots, online table games, and online poker). PA casino operators could pay $10 million for all three online verticals or $4 million each for one or two of them.

Two casinos (Lady Luck Nemacolin and The Meadows) have elected to turn down the offered licenses altogether. A third, Presque Isle, opted to pay for online slots and online table games piecemeal, leaving “their” allotted online poker license unused. This means that the PGCB still has seven online gaming licenses available: Two for online slots, two for online table games, and three for online poker.

Who will be eligible?

Pennsylvania has so far earned $108 million in fees for the online licenses applied for so far. They are not eager to pass up on the $24 to $28 million still lying on the table with these seven remaining licenses. Therefore, if PA casinos don’t want them, the door will be opened up to outside actors -the aforementioned QGEs.

A QGE is essentially any casino that is currently licensed to offer gambling in any jurisdiction. This means the PGCB will soon be fielding applications from US casinos as well as foreign casinos seeking to hold one or more of these valuable online gaming licenses. For example, this could mean an Atlantic City casino like Borgata or an international online operator like Betfair.

The list of potential eligible operators is long. PGCB requirements for QGEs are steep but operating a casino legally in any jurisdiction involves jumping through a lot of hoops. These hoops won’t be unnaturally restrictive. The PGCB’s Interactive Gaming License Process lists that QGEs must first meet three essential requirements:

  • The QGE must have attributes of a licensed slot machine licensee and hold a license in or outside the United States.
  • The license held by the QGE must also be in good standing and not currently under review.
  • The QGE must demonstrate financial stability and the ability to pay $4 million per online gambling certificate.

What happens next?

Casino operators who want one or more of these licences and who believe they qualify as a QGE will have a narrow window (October 15 through October 31) within which to submit a petition to the PGCB. Board staff will then review these petitions for eliglble entities and post on the PGCB website a list of all petitioners who qualify as a QGE.

The PGCB will then conduct a random drawing of all qualified petitioners. Those operators selected in the drawing will have 60 days to submit an application.

The inclusion of the drawing element suggests that the PGBC expects multiple out-of-state entities to be interested in these licenses. It will be interesting to see which casino operators will be keen to pay the high fees (and even higher taxes) for the privilege of operating online in Pennsylvania.

The waiting game

Of course, while all this goes on, there are six PA casinos still awaiting approval on their license applications and the five casinos already approved await the official go-ahead to begin their own operations.

Pennsylvanians eager to gamble legally online are hoping that the casinos already approved might be able to begin operations by the end of 2018.

Those PA residents who just can’t wait might consider the Pennsylvania Online Lottery. Games there are quick, fun, legal, and real money is up for grabs. Right now there are two excellent bonuses available. New players get $5 free to play when they sign up. Additionally, players can get a 50% deposit bonus up to $50 when they make their initial deposit.