Measuring The Impact Of Mt. Airy Linking Arms With The Stars Group In Pennsylvania

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It’s official: PokerStars will be an integral part of the Pennsylvania online gambling industry.

On Friday, it was announced that The Stars Group (TSG) has entered into a partnership with Mt. Airy Casino,  providing customers with “an all-inclusive, engaging experience by offering its popular poker, casino (including slots and tables) and sports wagering products.”

This marks the second time that PokerStars has defied conventional wisdom by linking up with a lesser-known U.S. casino brand. The iGaming behemoth has maintained a partnership with Resorts Casino in New Jersey, through which it currently offers online poker and casino games (and soon sports betting), since July 2013.

Mt. Airy was one of nine PA land-based casinos to apply for an all-encompassing iGaming license, forking over $10 million for the right to offer poker, table games, and slots online. It becomes the third casino, behind Parx Casino and Presque Downs, to firmly state its intention to try its hand at sports betting.

The Stars effect

A partnership with PokerStars is undoubtedly a very big deal for Mt. Airy, which resides firmly in the lower half of Pennsylvania’s brick-and-mortar casinos and could benefit widely from the brand recognition and large customer database Stars brings to the table. For Stars, the outlook is more of a mixed bag.

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Online poker

PokerStars will be a major force in the Pennsylvania online poker market — of that there is little doubt. In neighboring New Jersey, it was the market share leader from its launch in March 2016 through April 2018, only succumbing to WSOP/888 after the latter linked its New Jersey players with those in Delaware and Nevada.

The outlook in Pennsylvania is a bit murkier. State regulations state that PokerStars must visually identify with Mt. Airy, meaning a level of Mt. Airy branding will have to be affixed to the PokerStars site. On its own, that’s not such a big deal, but a second stipulation states that PokerStars must offer its product “through the interactive gaming certificate holder’s webpage or the webpage of an entity within the interactive gaming certificate holder’s organization structure.” The “too long, didn’t read” interpretation of this passage is that PokerStars will likely exist as a subdomain of the Mt. Airy site, which while great for Mt. Airy, could diminish the value of the PokerStars brand. In New Jersey, where PokerStars is also partnered with a smaller casino brand in Resorts, no such restrictions exist, enabling Stars to support a self-branded online poker site.

Furthermore, while it’s virtually guaranteed that PokerStars will be merging its New Jersey and Pennsylvania player pools at some point, it will be going head-to-head with 888-branded sites that share liquidity across those two states plus Nevada and Delaware. WSOP.com will prove a particularly tough competitor during the summer months, when the brand offers a ton of attractive events and promotions in tandem with the live World Series of Poker in Las Vegas.

PokerStars has also seen its brand tarnished in recent years, through a series of rake hikes, the sudden yanking of its highest loyalty tier (SuperNova Elite), and more recently through the implementation of the controversial Stars Rewards, which is poised to go live in the New Jersey market shortly. The recent mishandling of tournament payouts following widespread server failures hasn’t exactly helped its cause.

Yet despite its flaws, PokerStars is still an extremely strong brand, boasting a massive customer database, a clever marketing team, and by far the best online poker software. This combined with The Stars Group’s nearly bottomless pockets and eagerness to establish a foothold in the U.S bodes well for both itself and Mt. Airy Casino, not to mention players that have been itching to play on legal sites with strong traffic.

Online casino

Measuring the impact a PokerStars-branded online casino site will have on the PA online gambling market is a bit tougher to gauge. Internationally, the company’s casino arm is growing by leaps and bounds, and with a continued focus on the vertical (much to the chagrin of some poker players), it’s nearly inevitable that this growth will continue.

However, in the New Jersey market, PokerStars Casino is something of an afterthought, supporting far fewer games than most competing sites, and doing very little on the promotional front. In turn, it hasn’t exactly killed it with regard to revenue. And while it’s plausible PokerStars is ramping up for a major push, the 54% tax rate on online slots in Pennsylvania is sure to be a deterrent.

Still, online casino is one area where Mt. Airy branding may actually help PokerStars Casino succeed, as patrons will identify with the local brand. Should Stars make a concerted effort to keep up with the masses, it could at least be competitive against the likes of Parx, which will see its online casino platform provided by GAN, and SugarHouse, which already supports a highly successful online casino site in the New Jersey market.

On a side note, Mt. Airy also has an established partnership with 888 Holdings, and because iGaming license holders in Pennsylvania are allowed to support an unlimited number of skins, it’s plausible that we’ll be seeing both 888 Casino and PokerStars Casino brandishing the Mt. Airy logo.

Sports betting

To the surprise of no one, a segment of the TSG/Mt. Airy announcement was centered on sports betting. It wasn’t made clear which TSG sports betting brand will launch in Pennsylvania, but the smart money is on BetStars, for several reasons:

  • TSG and Resorts recently extended their partnership in New Jersey to incorporate sports betting through the BetStars brand. BetStars is a strong candidate to be one of the next mobile and online sports betting offerings to pop up in the New Jersey market.
  • The acquisition of Sky Betting and Gaming by TSG has been placed on hold by the UK Competition and Markets Authority.
  • The established BetStars brand, like PokerStars Casino, is also on a strong growth trajectory in international markets.

One interesting note is that sports betting license holders in Pennsylvania are limited to a singular skin, meaning that 888 will presumably not be launching a sports betting product under Mt. Airy.

Until recently it was unclear if any PA casino would opt-in to sports betting, as the sky-high tax rate of 36%, not to mention the $10 million licensing fee and severe restriction on skins, creates an inhospitable environment. Yet, with confirmed plans from both Parx and now Mt. Airy, along with Churchill Downs signaling its intentions to enter the market, PA is shaping up to be a rather large sports wagering industry.

As far as TSG’s role in the market, it stands to be a competitive one. BetStars will presumably have a first-mover advantage, as the announcement is a clear indicator that TSG and Mt. Airy will be jumping on the sports betting opportunity as soon as regulators give the go-ahead. Secondly, there’s little doubt that TSG will support strong marketing initiatives, designed to drive players to its brand. Most importantly, BetStars, possibly more than any other sports betting provider, will be able to market its product to online poker and casino players. From the presser:

“The Stars Group intends to utilize its existing and proprietary technology and player account management platform for its offerings in Pennsylvania, providing customers with a single account, common wallet, various online and mobile depositing and withdrawal options, and a seamless offering of betting and gaming options.”

Beyond the shared platform and wallet, Stars Rewards will undoubtedly benefit those who participate in multiple verticals more than players who stick to just poker. Combined, this could go a long way toward establishing BetStars as a force in what suddenly stands to be a competitive marketplace.

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Robert is a veteran writer and analyst for the gambling industry, with a particular focus on the emergent US online gambling market. An avid poker and gambling enthusiast, Robert offers unique perspectives from both the vantage point of the player and industry professional, and is fit to cover a broad spectrum of topics.

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