PA Participation In Online Poker Compact Just Became Far More Likely, But Timing Is Iffy

With a new federal court opinion issued on the Wire Act, Pennsylvania officials are expected to soon resume negotiations with other states to join their poker compact and build player pools.

The chill that has long frozen Pennsylvania’s intent to join an interstate poker compact was relieved by a federal court ruling last week, but it’s too soon to provide a timetable for when the games with players in other states might actually begin.

Pennsylvania’s October 2017 gambling expansion law that allowed online poker as part of new iGaming specified the state could reach an “interactive gaming reciprocal agreement” with other states.

It was viewed as a useful provision for both future online poker operators and consumers, who all want as many players involved as possible to maximize the number and type of games available at various stakes.

Any consideration of combining with the three other states that had already pooled their players in a compact — New Jersey, Delaware, and Nevada — came to a halt after the Trump administration’s Department of Justice circulated a November 2018 memo suggesting such interstate gambling could violate the federal Wire Act of 1961.

In a case filed by the New Hampshire Lottery, which was concerned about how the DOJ opinion could also affect lotteries, the U.S. First Circuit Court of Appeals last Wednesday rejected that DOJ position by ruling the Wire Act only prohibited interstate sports betting.

That seemed to finally free up Pennsylvania to join with other states to build bigger poker player pools, but that doesn’t mean it will happen tomorrow, or next week, or even next month.

State agency awaits absolute legal certainty

“It is important,” Pennsylvania Gaming Control Board spokesman Doug Harbach acknowledged of the appellate court opinion, but he said the agency still needs to make sure any legal doubts are fully lifted.

“The First Circuit’s decision is one step closer to allowing the board to conclusively determine that the interstate wagering is not inconsistent with federal law. The board will continue to monitor the litigation for communication that the decision will be allowed to become final or if further review will be sought,” Harbach wrote in an email.

Technically, the federal government could prolong the legal case, but that is viewed as unlikely considering the end of the Trump administration in Washington. Under former President Barack Obama, the DOJ had publicized an opinion in 2011 making clear it had no legal problems with something like an interstate poker compact, and the Biden administration would be expected to take the same approach.

For Pennsylvania to actually proceed, however, it needs finality to the legal concerns plus a negotiated agreement with other states to cover the issues pertaining to the compact. The gaming board’s officials will need to pick up where they left off many months ago in pursuing those discussions with their peers elsewhere.

“Communications had taken place some time ago with representatives of the other jurisdictions,” Harbach said. “The communications were put on hold during the pendency of the federal litigation. The Wire Act decision was just five days ago.

“As we receive further information as to the finality of the federal decision, we will continue to discuss the matter internal to the commonwealth parties and proceed as determined in the commonwealth’s best interests.”

PA players still can use just one site

It is possible the lack of an interstate poker compact and uncertainty over its future has been one factor in delaying growth of Pennsylvania’s iPoker market.

The lone site, PokerStars, operating online under partnership with Mount Airy Casino Resort, launched Nov. 4, 2019. It claimed $35.9 million in revenue from the rake on its tournaments and cash games in 2020. Its peak months came during the COVID-19 shutdown of land-based casinos in the spring, and since July it has settled back down into revenue figures of $2 million to $3 million monthly.

None of the other seven operators that indicated plans to go forward with online poker in Pennsylvania has yet done so.

For many months there has been expectation of imminent launch by both the Caesars/888 site and the partypoker site of BetMGM/Entain, based on their licensing approvals received from the state gaming board. Both Caesars and BetMGM operate mobile sites offering slots and table games, but neither has moved toward starting poker play, and Harbach said nothing is scheduled at this point for either.

Caesars representatives did not respond to an email from Penn Bets, and a BetMGM spokeswoman said she had no specifics to offer on either its Pennsylvania plans or the impact of the Wire Act ruling.

“We continue to work with gaming regulators through the U.S. as we prepare to expand our poker offerings on both the BetMGM brand as well as for the partypoker U.S. network,” wrote spokeswoman Elisa Richardson. “We’ll provide state-specific details when we can, keeping in focus each jurisdiction’s regulatory requirements and approvals pertaining to ring-fenced and/or shared liquidity opportunities.”

The value of shared liquidity has gotten a new boost with Michigan’s imminent arrival to the online poker world. Its online sports betting and casino games began Friday under the state’s gambling expansion. Additionally, iPoker with participation in an interstate compact is also authorized, though the poker sites have not yet commenced.

Pennsylvania, with its population of 12.8 million, would by itself double the size of the player pool available from the New Jersey-Delaware-Nevada compact. Michigan would add thousands more potential players from its population of 10 million.

The future seems bright for such possibilities as a result of last week’s court ruling. Now the big question is when that future arrives.


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