Amid Host Of iGaming Proponents, Parx Speaks Out Against PA Gambling Expansion

Posted on March 8, 2017

[toc]Tuesday marked an important day for Pennsylvania online gambling advocates.

Not only did the first joint committee hearing for pros and cons of expansion take place, but there was also a second online gaming bill introduced in the state Senate to go along with an existing House bill.

Nothing was decided yesterday, but the state legislators did hear from both sides of the issue. The pro-gaming group brought many important pieces of evidence to the table.

Nonetheless, the opposition invoked some scare tactics which had most pundits admitting this was not a home run for the iGaming cause.

Here are the basics of the new bill as well as highlights from both the proponents and opponents of the online gaming cause. There are also next steps for #PlayPenn supporters to make their voices heard in advance of the next hearing on the matter, which is coming up later this month.

New PA gaming bill introduced in Senate prior to hearing

A new iGaming bill was introduced in the Pennsylvania Senate in advance of the Tuesday joint committee hearing between the Senate Community, Economic & Recreational Development Committee and the House Gaming Oversight Committee on the impact of online gaming expansion in the state.

The new bill was introduced by Sen. Thomas Killon and three others and is known as SB 477 and is effectively the same bill as HB 392, the House bill introduced last month.

Both measures seek to legalize and regulate online poker, online casinos, and daily fantasy sports (DFS). The bill would also effectively reinstate the casino tax measure, which previously cost casinos $10 million annually.

Key witnesses and arguments for the pro-online gambling cause

The majority of the testimony heard in Tuesday’s hearing came from proponents of online gambling expansion in the state.

In addition to numerous Keystone State casinos voicing support, the committees also heard from the Pennsylvania Gaming Control Board (PGCB), online poker and casino company Amaya, and geolocation company Geocomply.

Caesars says online gambling grew its brand

One particularly persuasive witness was Caesars Entertainment representative and Senior Vice President of Government Relations and Development, David Satz.

Satz presented concrete numbers indicating 80 percent of the players on the company’s online casino were not previously part of the Total Rewards player loyalty program used across Caesars properties worldwide.

There was also a substantial number of dormant accounts on Total Rewards which were reactivated when the customers played on the online site.

Only 11 percent of users were existing, regular brick and mortar casino patrons.

This information stands in stark contrast to the often unsubstantiated numbers and projections behind the belief online gambling would cannibalize the industry.

Sugarhouse Casino representatives echoed the Caesars sentiments.

The Philadelphia property currently offers real money NJ online casino games online and can confirm an uptick in land-based gaming and spending from the online customer base.

Even though Amaya, parent company of PokerStars, is not currently part of the Pennsylvania market, the company provided testimony to attest to the effectiveness of online casino companies partnering with brick and mortar casinos to the benefit of both parties.

Pennsylvania Gaming Control Board

Another proponent for gambling expansion is the PGCB, whose witnesses asserted they would be able to undertake the regulation of iGaming expansion as stipulated in both the House and Senate bills.

Moreover, the PGCB fully supported the proposed legislation in the testimony the group submitted in advance of the hearing.

Opponents made their voices heard

Parx Casino

The bulk of witnesses who spoke at the Tuesday hearing had positive things to say, but the few opponents and the lawmakers who oppose iGaming made their voices heard loud and clear.

Most notable on the list of opponents is Parx Casino, one of the largest casinos in the state. Previously ambivalent on online casinos, Parx came out in strong opposition at the hearing.

In the company’s submitted testimony, the argument the casino presents against online poker boils down to a few points:

  • It is inaccurate to think the New Jersey casino market is comparable to the Pennsylvania market
  • Online casinos would cannibalize brick and mortar properties
  • “If it ain’t broke, don’t fix it”

The testimony provided some in-house numbers and projections to back up the group’s theory about the varying PA and NJ economies.

It also focuses on the discrepancy in tax rates between brick and mortar casinos (59 percent) and online gambling (15 percent).

The working theory Parx is operating on is that resources from casinos will be diverted from the properties themselves and towards the much less taxed online options.

Parx officials compared the relationship between casinos and online gambling to video rental stores and Netflix as well as retail stores and Amazon. Citing little more evidence than, “if these companies can be driven out of business by online entities, why wouldn’t it happen to us?”

The testimony also incorrectly asserted Nevada online gaming, which is restricted to poker and does not allow casino games, is designed to protect the physical casinos in the state.

The testimony pointed out sports betting had to be done on property, which is demonstrably false. Most major sports books in the state offer a mobile app which uses geolocation technology similar to poker’s for Silver State residents to make online wagers on sporting events.

The final reason Parx objects to online gaming is the one that makes the most sense. It would not benefit the casino financially.

As the market leader in the state, online gambling offers an opportunity for other, smaller casino outlets to compete on a level playing field. For some properties, like Sugarhouse Casino, Valley Forge Casino, Harrah’s Philadelphia, and others, they even have a leg up on Parx thanks to pre-existing relationships with online casino providers.

Senators Lisa Boscola and Robert Tomlinson

The senators and representatives on their respective committees could ask questions of the witnesses and two who took strong advantage of the opportunity were Sen. Lisa Boscola and Sen. Robert Tomlinson.

The two lawmakers, who represent the home districts of Sands Bethlehem and Parx Casino respectively, brought up the standard scare tactics and concerns about online gambling.

Lines of questioning included problem gambling, underage gambling, geolocation, and more talk about potential cannibalization of brick and mortar properties.

Next hearing scheduled for March 20

The two committees will hold another joint session to discuss the subject on March 20.

While the initial hearing did not go swimmingly for iGaming supporters, the continued discussion and debate does bode well for the cause.

If you would like to voice your support for the #PlayPenn movement, you can do so using this quick and easy form.

Our analysis of the revenue potential of the market can be found here.

Image credit: Tang Yan Song / Shutterstock.com

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Jessica Welman

Jessica Welman is the managing editor of PlayPennsylvania. A longtime poker media presence, Jess has worked as a tournament reporter for the World Poker Tour, co-hosted a podcast for Poker Road, and served as the managing editor for WSOP.com.

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