Its casino technology partner GAN recently announced that it will be providing the technology for Parx’ sports betting platform. The deal includes providing the casino with on-site sports betting. GAN told PlayPennsylvania:
“The major strategic development for GAN is that we’re being used to deploy on-property Sports betting as well as online, to be made available to on-property patrons on self-serve kiosks/tablets deployed on-property as well as traditional retail Over The Counter (OTC) services (with digital/paper tickets).”
Parx will offer shared wallets for online casino and sports betting
Parx customers will be able to use a shared wallet across the casino’s online sports betting and online casino products. GAN already announced its online casino partnership with Parx.
“Patrons will have a single ‘Parx Account’ in the GAN Platform to deposit/withdraw funds from, which can be used for Retail Sports betting, Internet Sports betting as well as Internet Gaming. The concept is to reduce ‘anonymous’ cash-only sports betting on-property as much as possible, and to drive sports betting patrons to open their ‘Parx Account’ to maximize all-important cross-sell to online sports/casino.
Chief Commercial Officer of GAN, Jeff Berman said:
“Following the execution of this extension and amendment, GAN now offers clients a platform equipped with multiple options for integrated sports betting to be launched seamlessly alongside GAN’s market-leading Internet casino product. We welcome the opportunity to deliver sports betting in the retail channel, as well as online, through GAN’s unique platform containing patented technology.”
Parx hasn’t said who will be providing the sports betting data services. That will come from another company and be integrated into GAN’s technology platform.
One interesting feature of the deal is that GAN will have skin in the game. The deal includes a revenue share from both internet and retail sports betting.
Online sports betting could launch by end 2018
GAN expects online sports betting to launch before the end of this year. However, there are still a number of regulatory hurdles in the way.
As of today, the Pennsylvania Gaming Control Board (PGCB) has not announced any applicants for the $10 million sports betting gaming license. This deal is the first news that a PA casino is definitely offering online sports betting.
The PGCB is still working on finalized sports betting regulations. With that in mind, the board’s ability to process license applications is likely not finalized yet either.
High taxes pose a marketing challenge
Parx knows that it’s taking a business risk by adding sports betting. The $10 million a steep price to pay for the incremental gaming license. Plus, a 36 percent tax on gross gaming revenue is also a bitter pill to swallow.
Profits on sports betting will be there. They may operate on very narrow margins though. Assuming some of the other PA casinos also leap into the fray, the market is likely to be intensely competitive.
The high tax rates also mean that licensed casinos may well offer worse odds than those available at black market online sports betting sites.
The casinos already face a marketing challenge in wooing customers away from offshore sites. This will be doubly difficult if the high tax rate results in a smaller marketing budget or uncompetitive lines.
Pennsylvania players betting at black market sites are taking risks. State-licensed sports betting will offer better consumer protections. It’s an open question as to whether they can be encouraged to switch to the regulated sector.
The cross-sell opportunity is critical to the casino’s success. If online sports betting brings in new customers who also wager on other activities, or even more importantly, visit the casino and spend their entertainment dollars on its various attractions, then all will be well.