Pennsylvania legalized online poker before Michigan, began offering it to players before Michigan, and authorized operators to join a multi-state compact that would benefit both them and their poker patrons before Michigan.
And yet, an announcement late Wednesday that Michigan had been accepted into the Multi-State Internet Gaming Association with New Jersey, Nevada, and Delaware made no mention of Pennsylvania.
The simple question is “Why?”
The simple answer, according to a representative of the association that oversees the nation’s lone existing poker compact, is Pennsylvania officials have sought no discussions in many months with the association.
“To be short, Michigan formally requested to join. We have not received the same from Pennsylvania,” Michael Morton, a senior policy counsel for the Nevada Gaming Control Board involved in the legal work of the multi-state association, told Penn Bets Thursday when asked about the difference between the two big states.
Pennsylvania’s 2017 gambling expansion law enabled wide-ranging online gambling in the state, far beyond what is common in most states. It includes iPoker as well is online casino games and sports betting. Three online poker operators in the state have platforms under four different brands, although poker generates far less revenue for gaming companies than online slots or table games or sports betting.
When it comes to poker play, size matters
New Jersey, Nevada, and Delaware were the first states where online poker was available legally, and they realized that enabling operators to pool players across virtual borders in the legal states would serve everyone’s interest, providing broader game, prize, and operator revenue opportunities.
It has long been anticipated that, for those same reasons, Pennsylvania and Michigan would eventually join the multi-state compact created by those three states. It must be enabled by legislation and by regulations accompanying negotiations with the existing states’ representatives to the association, and lawmakers in both states approved that possibility. In seizing the opportunity, Michigan with its entry nearly doubled the size of the potential player pool.
“The Multi-State Internet Gaming Association welcomes Michigan to its ranks, along with its nearly 10 million residents, who can now avail themselves of a full array of interactive gaming among the association’s member states,” Rebecca Satterfield, manager of the association and internet gaming manager for the Delaware Lottery, said in announcing the addition.
“The association continues to be forward thinking and welcomes the interest of additional gaming jurisdictions in becoming party to the agreement.”
Satterfield’s latter comment fails to name Pennsylvania specifically, but clearly refers to it. It is the only other state with legal and active online poker, and its population of 12.8 million is nearly 3 million greater than Michigan’s.
“If someone wants to join, we stand ready and waiting” to discuss it, Morton said, while noting the association does not push for expansion itself.
He explained that Pennsylvania officials initiated preliminary discussions several years ago. Those halted, however, after an unexpected U.S. Department of Justice interpretation of the federal Wire Act during the Trump administration threatened the legality of such interstate gambling arrangements. The New Hampshire Lottery won a federal court opinion against that interpretation.
The Biden administration declined to appeal the court’s ruling, but DOJ has issued no official policy of its new position. A lawsuit filed by IGT to protect its lottery operations in various states is seeking to obtain official clearance to resolve lingering questions about the Wire Act.
PA officials are ‘monitoring’ rather than acting
The curious aspect is that Michigan officials evidently feel no constraint at this point from the Wire Act issue, while that may still be a concern in Pennsylvania.
A Pennsylvania Gaming Control Board spokesman referred questions about the holdup in joining the multi-state association to Gov. Tom Wolf’s office, as his administration rather than the independent regulator would need to take the lead in pursuing admission.
Wolf’s press secretary, Elizabeth Rementer, sent the following email response to Penn Bets:
“The Wolf administration continues to monitor how the expansion of online gaming in recent years has affected the gaming industry and Pennsylvania residents, and continues to review the agreement.”
While there’s no timetable yet for just when Michigan players will actively be playing against peers in other states, as some technical steps are still required by the Michigan Gaming Control Board and operators, it apparently will be soon. Obviously now, it will be long before they’re playing against anyone from Pennsylvania, based on Rementer’s statement, as it would take months of discussions among the various states’ parties before expansion of the association could take place once the Keystone State expresses interest.
In the meantime, those interested in playing legal online poker do have an advantage in Pennsylvania over their counterparts in most every other state. They can play using PokerStars, WSOP, and the shared partypoker platform of BetMGM and Borgata. Combined, those sites are earning about $3 million annually in Pennsylvania from the rake on cash games and tournaments.
The question remains how much more attractive that advantage would be, and how much more revenue the operators might make, if Pennsylvania were to align itself with the four other states.