Ten Online Gambling Licenses Remain Up For Grabs In Pennsylvania, Who Wants Them?

With the exclusivity window for PA casinos to buy iGaming licenses closed, outside entities may now apply. Who might get involved?
hands in the air

Update (11/1/18): There are now 11 total licenses up for grabs due to Stadium Casino relinquishing its online poker license at a PGCB hearing on October 1.

As the July 17 deadline for submitting PA online casino applications approached, it was still anyone’s guess as to which, if any of the state’s licensees would pay to offer virtual slots, table games or online poker.

But at the eleventh hour, fears that Pennsylvania’s iGaming industry was dead in the water were quelled when it was announced that nine casinos had submitted petitions to offer all three verticals – each paying a staggering $10 million fee.

Once the window closed, operators had the option of buying licenses piecemeal, and two more casinos entered the game. Mohegan Sun was late to the party, and was forced to pay $12 million total to offer all three formats ($4 million each), its indecisiveness costing it an additional $2 million.

Presque Isle Downs was the next to get involved, paying $8 million combined for slots and table games permits, but opting out of offering peer-to-peer poker.

The only two PA casinos not to purchase some form of iGaming license were resort casino Lady Luck Nemacolin and The Meadows.

On October 4, Rush Street Gaming-owned Rivers had a change of heart, and notified the gaming control board that it would rescind its interactive gaming application. Instead, it will likely either act as a skin of sister casino SugarHouse, or simply advertise SugarHouse’s online casino to the Western Pennsylvania market.

With three casinos declining to purchase a license, and one purchasing permits for only two verticals, that means several licenses remain:

  • 9 poker licenses bought, 4 remain
  • 10 slots licenses bought, 3 remain
  • 10 table games licenses bought, 3 remain

So with 10 licenses still up for grabs, what happens next?

The next steps

At the start of the process, PA regulators stated that any licenses not purchased by state casinos inside the specified window would be put up for grabs to qualified outside entities.

According to the PGCB, to be eligible, outside entities must meet the following qualifications:

“(1) It is licensed in good standing in another gaming jurisdiction.
(2) The licensing standards of that other gaming jurisdiction are comprehensive and thorough and provide similar safeguards as those required by this Commonwealth.
(3) The petitioner has the business experience and expertise to operate an interactive gaming system.”

Those that meet the specifications must submit a petition between October 15 and October 31. The board will then review all petitions for eligible entities and conduct a random drawing of all petitioners. Those lucky enough to be selected will have 60 days to submit an application for the license types they intend to purchase.

Which outside entities might set up shop in PA?

While PA iGaming license prices may be sky high, there will undoubtedly be some interest from out-of-state casinos and gaming companies. This could include properties like Atlantic City casinos, which of course, are already highly regulated by the Garden State, or online gambling sites operating legally, either in the U.S. or abroad.

There could be several potential takers, with Atlantic City venues topping the list:

  • Golden Nugget: Due to its smashing success in the New Jersey online gambling market, Atlantic City’s Golden Nugget would be a prime candidate to snap up a PA license. GN serves as the umbrella for Betfair Casino and SugarHouse Casino, a trio of sites which dominates the market month after month.
  • Borgata: Borgata is heavily involved in online gaming in New Jersey, running its own iGaming and poker site, while hosting four other gaming brands. Three of those companies leverage the GVC platform, which Borgata could easily deploy in the Keystone State.
  • Hard Rock AC: Hard Rock launched on the same day as Ocean Resort in Atlantic City, and opened its own iGaming site soon afterwards. The company boasts a rocksolid brand and has pledged to spend heavily in the online gambling space. Gaining a gambling foothold in PA, where it offers several restaurants, might be a nice addition to its portfolio.
  • Betfair: While well known in the UK, Betfair online casino opened up shop in the Garden State with little to no brand recognition. Even so, it has managed to become one of the highest-earning iGaming sites in the state. Betfair may try and parlay that success in PA, a state with a much higher population, hoping to become profitable even with the massive fees required.
  • Bet365: Another possibility would be a UK gaming brand like Bet365. The company offers an online casino and sportsbook product in Europe, and recently announced a partnership with Hard Rock Atlantic City to open its own sports betting skin. Might it be eyeing a U.S. expansion?

There was a time when we believed NJ’s Tropicana might try its luck in Pennsylvania, mostly because the casino has supported two competitive online gambling sites (one self-branded, the other via the Virgin Casino skin) since 2013. However, new owner Eldorado Resorts recently fired all of the license holder’s in-house online casino staff, citing no confidence in online gambling.

If there were ever a reason to believe that expansion was no longer in the cards, axing your entire iGaming team because you have little interest in the vertical might just be the one.

When will online casinos launch in Pennsylvania?

So far, 10 PA casinos have applied for some level of online casino license. The PGCB is now in the process of approving those entities, which is something of a formality considering regulators are already intimately familiar with the applicants.

Seven casinos have already been approved, leaving three to go:

The next step is to unload the remaining licenses, if, of course, there is any interest. With qualified entities having until October 31 to file petition, then having an additional 60 days to submit their application, we estimate that online gambling in PA won’t go live until at least January 2019.

In the meantime, regulators are set to green light land-based sportsbooks in the state, which could debut as soon as November. Expect online sports wagering and mobile apps to hit the market soon after.


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