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.

Pennsylvania To Get Online Gambling On July 15, 2019

After a long wait, Pennsylvania’s gamblers finally know when online gambling in the state will be arriving: July 15, 2019!

The news came recently from Pennsylvania Gaming Control Board (PGCB) Executive Director Kevin O’Toole. During a PGCB meeting on April 15, O’Toole announced that they needed 90 days to finally get their regulatory ducks in a row and allow PA casino operators to launch online gambling operations.

Assuming no hiccups, in a couple weeks, PA will be the fourth US state with mobile sports betting. Similarly, in three months, Pennsylvania will be the fourth US state with legal online poker.

Hurry up and wait

Eighteen months ago, legislation enabling a massive expansion of gambling in Pennsylvania was signed by Governor Wolf. State legislators guessed (correctly) that the US Supreme Court would strike down a law that had made sports betting illegal throughout most of the country. In addition, recent DOJ opinions regarding the scope of the Wire Act made legal room for states to license and regulate gambling locally without federal prohibitions.

In May of last year, the US Supreme Court followed through as predicted and Pennsylvania was all set to roll out several new expansions of gambling activity in the state. The new additions included a new online lottery, satellite casino expansions, sports betting (including mobile betting), and online casino gaming.

Several PA casinos have jumped on these new opportunities, expanding to satellite locations, adding sportsbooks, and applying for online gaming licenses. Despite many having been approved for these licenses, until now nobody has had any idea when online gaming could actually begin. Now we know: July 15 of this year.

What will the PA online gambling landscape look like?

Pennsylvania has thirteen land-based casinos eligible to apply for online gaming licenses in the state.

Ten of these have applied for and received licenses to offer online table games and online slots. Seven of these are also licensed to offer online peer-to-peer gaming (most notably: online poker). Sports betting is covered by a completely different license. More on the PA sports betting picture here.

Only three PA casinos declined to enter the online gaming space: Lady Luck Nemacolin, Meadows, and Rivers Casino. River’s reluctance to participate is easy to explain. They can simply use the license of their sister casino SugarHouse to operate state-wide. The other two simply must have thought the license fees and state taxes were too onerous a burden.

Since licenses were “created” for all thirteen PA casinos, when some were left on the shelf the PGCB opened the door for outside Qualified Gaming Entities (QGEs) to grab them. Two did. Golden Nugget and MGM will be operating online gaming in Pennsylvania under this special QGE status.

An explosion of online poker

Since the US Government effectively destroyed US online poker in 2011, legal options for US players have been meager. Nevada and New Jersey have intra-state sites and states are beginning to allow the merging of player pools, but still the online poker landscape is a desert compared to the lush landscape that existed prior to “Black Friday”.

Accordingly, the opening of the PA online poker market will be a big deal. Here’s a few of the major landmarks of the coming PA online poker market:

What about the Wire Act?

Gambling, both traditional and online, is poised to sweep across many states in the US. There are some worries that the DOJ under Trump might try to reverse this trend, or at least the online portions of it, but so far states are proceeding with their plans to expand gambling across the country.

The PGCB is clearly intending to move forward despite the DOJ’s new hostile posture. Pennsylvania is involved with a federal court proceeding in New Hampshire that is challenging the new DOJ “interpretation” of the Wire Act. A lot is riding on the outcome.

Even if the DOJ proves extremely hostile to online gambling, state operators may avoid legal trouble if they can successfully confine all online activities (including servers and payment processing) within the borders of their respective states (and of course obeying the laws of their own state).

Most at risk from the DOJ’s new hostile reading of the Wire Act is the prospect of merging player pools in online poker. It really restricts the number and variety of games available to players if they can only play against people residing in the same state.

 

 

RiversCasino Online Gambling application withdrawn

Rivers Casino Says No To Online Gambling In PA

Pittsburgh’s River’s Casino has decided it doesn’t want to get into online gambling after all — at least right now. The news was announced on Thursday by the Pennsylvania Gaming Control Board as they revealed that three additional online gambling licenses would become available as a result of the news.

The withdrawal of the Rivers Casino now leaves a total of 10 online gambling licenses up for grabs, which were recently made available to so-called qualified gaming entities, located outside of Pennsylvania. The first 29 licenses for online gambling have been snatched up by PA casinos over the last few months.

Licenses are available at $4 million each in the following categories:

  • 4 online poker licenses
  • 3 online slot licenses
  • 3 online table licenses

What’s next for PA online gambling QGEs?

With 7 online gambling licenses unclaimed — which is now the with Rivers Casino’s departure — the PGCB decided to open up applications to qualified gaming entities (QGE) in mid-September for an opportunity to participate in the burgeoning PA online gambling market.

QGEs, which are available to licensed gambling operators in other jurisdictions that are in good standing, will have from October 15th to October 30th to make their interest in online gambling in PA known. The PGCB will then publish a list of qualified candidates before a public drawing takes place sometime in early November.

Why did Rivers Casino withdraw?

Rivers Casino was one of original nine casinos to apply for online gambling in mid-July. But something happened in the meantime to cause them to withdraw. So what was it?

It might have something to do with SugarHouse, which is owned by the same parent company as Rivers Casino — Rush Street Interactive. SugarHouse was approved for a comprehensive online gambling license in mid-September. By focusing on SugerHouse for online gambling, Rush Street Interactive can save $10 million in license fees.

Despite its application withdrawal, the Pittsburgh-based casino did say it was still interested in online gambling for Rivers Casino. For now, they will monitor the market and see how the SugarHouse performs after launching. The Rivers Casino will also be focusing on sports betting, which they applied for just last week.