Pennsylvania gaming interests are mired in a contentious debate over whether or not to place a hard cap on the number of online gambling brands, or “skins”.
Parx Casino and Penn National have lobbied for skins to be limited to one per operator, and that the skin share the same branding as the license holder. In other words, a Parx online casino and/or poker site would have to have Parx in the name, and other brands would be forbidden from rolling out a site under the Parx iGaming license.
On the flip side, international operator 888 (which has branded casino and poker sites in New Jersey) argues that casinos be permitted to run multiple skins, and that out-of-state operators be allowed to affix their name to some of those domains. The company envisions a market similar to New Jersey, where license holders like Golden Nugget Casino host sites from international iGaming brands (Betfair) and out-of-state casino owners (SugarHouse).
By effectively stripping the right of license holders to support online gambling skins in Pennsylvania, the market will be placed at a severe disadvantage.
- Smaller casinos with less brand recognition will have difficulty competing with their larger counterparts, and may choose not to participate in the industry at all.
- Innovation will be stymied, as operators will have little room to experiment with different interfaces, platforms, loyalty programs, and formats.
- Marketing spend will be limited, as big players with plenty of financial muscle will be absent from the market. The effectiveness of marketing campaigns could also suffer adversely.
- There was an appetite for more than a dozen online casinos in New Jersey. The same will hold even truer in the larger state of Pennsylvania. Placing a cap on skins all but guarantees the industry doesn’t reach its revenue potential.
Lastly, several renowned and highly recognizable iGaming brands could be left out in the cold, some of which have already made a notable impact in the legal US online gambling landscape.
Sans their presence, the path toward sustainability will become that much more difficult.
Despite entering the NJ online poker market two-and-a-half years late, and during one of its darker periods for that matter, PokerStars swiftly became the overwhelming market share leader. And it managed this in part due to its strong branding.
The entry of Stars temporarily revitalized the market, with pre-Black Friday players familiar with the product flocking to register an account. NJ versions of PokerStars’ branded tournaments like the NJCOOP and NJSCOOP were among the most successful the market has seen, drawing close to $1.5 million in total buy-ins. And perhaps most importantly, Stars prompted its competitors to up their games. Without it, it’s unknown whether WSOP NJ/888 NJ would be hosting top-flight MTT events of its own.
Sure, if Parx and Penn National get their way, PokerStars could still offer its industry best software to a casino client, but if a Stars-powered site doesn’t wield the PokerStars name, players may be wary or unaware of it.
Alternatively, PokerStars could grab a leftover poker license, and go into business for itself. Land-based casinos have a 120-day exclusivity window from when applications open to secure a license before out-of-state entities can apply.
Yet by going out on its own PokerStars would still be cut off from hosting cross-promotional tie-in events at a land-based casino, as it has done twice at Resorts AC in New Jersey. And while those events were only modestly successful, Resorts doesn’t even possess a full-time poker room. A tie-in with a partner like Mohegan Sun or Parx could fare significantly better, driving online-only players to the brick & mortar poker rooms.
WSOP.com is one half of the WSOP NJ/888 NJ poker network in New Jersey, and the more successful of the duo. As is the case with PokerStars, its popularity stems from its branding, as sharing a name with the most prestigious brand in all of tournament poker is undoubtedly a draw.
Should WSOP.com be shut out from the Pennsylvania market, players will still (probably) have access to 888-powered online poker sites, they’ll just be called Mount Airy Poker or Harrah’s Poker. These names should resonate fairly well (especially Harrah’s), but don’t possess the same global appeal to poker players as the WSOP.com brand.
Furthermore, players will miss out on cross-promotional vehicles between WSOP.com and the live Series. For instance, in New Jersey players can win their way into the World Series of Poker Main Event from their computer chairs. This wouldn’t be the case if PA limits its skins.
Nor would players be able to win exclusive WSOP.com Championship Rings for winning high-profile events. Satellites into WSOP Circuit events throughout the US? Forget it.
Despite operating the world’s largest betting exchange, Betfair came into the US online casino market as a relative unknown. Today, it’s anything but.
From humble beginnings, which saw it struggle under then partner and now defunct Trump Plaza, Betfair has become the most successful non-Atlantic City brand in the New Jersey market. Together with new partner Golden Nugget Casino and ally Play SugarHouse, it has attained a nearly insurmountable market share lead.
Unlike PokerStars and WSOP.com, Betfair’s success didn’t stem from its branding. Rather it’s a testament to its experience in the iGaming space. Simply stated, Betfair crafted a better outreach strategy than its less accomplished operators. Whether it be through its numerous TV and radio adverts, aggressive welcome bonus, or exclusive games and formats, Betfair was always at the top of its game, and players responded.
It’s likely Betfair also played a strong role in the success of Golden Nugget Casino, sharing its expertise to help bolster its partner. Unfortunately, if Betfair isn’t allowed to host an iGaming skin, it won’t have the ability to retell its war stories, nor will it be present in the market, pending it doesn’t snag a leftover license.
Atlantic City casinos
It is speculated that the reason Parx wants to limit iGaming skins to one per operator is so that it can retain its market dominance. However, by calling for a limitation on skins, Parx may end up shooting itself in the foot.
To clarify, there’s strong reason to believe that if land-based casinos are limited to a solitary self-branded skin, many smaller to mid-sized properties will opt out of the marketplace, thus paving the way for out-of-state properties to grab them.
And who might be most interested in laying claim to a license? The most obvious answer is those who have already found success in the industry, namely Atlantic City-based casinos.
Will Parx really want to go heads-up against proven quantities with nearly five years iGaming experience, such as Golden Nugget Casino or Tropicana Casino, in Pennsylvania? Probably not. Unfortunately, it may have to should a number of iGaming licenses still be available after the initial blitz.
Alternatively, if Parx weren’t so shortsighted it could establish a strong partnership with an AC brand, sharing wisdom from it and growing together as a unified front.
The picture could soon become clearer
On March 21, the Pennsylvania Gaming Control Board is slated to talk temporary online gambling regulations. Furthermore, PGCB executive director Kevin O’Toole has recently indicated that temp iGaming regulations and the start of the first application phase will kick off in mid-April.
It is expected that we’ll receive the answer to the “skins” question at that time.
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