Pennsylvania Online Casino Partnerships
Long before Pennsylvania legalized and regulated online casinos, casino operators were already preparing for the day it might happen. In fact, as soon as New Jersey online casinos in late 2013, Pennsylvania operators started paying attention. Now, with Pennsylvania online casinos and online poker expected to launch at the beginning of 2019, the PA properties are starting to gear up to log on.
PA online casino partnership tracker
Here is a look at the land-based casinos, QGEs, and their partners and application status:
|Casino||Existing online partners||Potential or speculated partner||Sports betting partners||Interactive application status||Sports betting application status|
|Harrah's||888||N/A||Scientific Games||Conditionally approved||Conditionally approved|
|Hollywood (Penn National)||N/A||IGT||William Hill||Conditionally approved||Conditionally approved|
|Meadows||N/A||IGT||William Hill||Did not apply||Has not applied|
|Mount Airy||888 / PokerStars||N/A||BetStars||Conditionally approved||Has not applied|
|Parx||GAN||N/A||Kambi||Conditionally approved||Conditionally approved|
|Rivers||SugarHouse / Rush Street Interactive||N/A||Kambi||Did not apply||Conditionally approved|
|Sands Bethlehem||N/A||N/A||N/A||Conditionally approved||Have not applied|
|SugarHouse||Rush Street Interactive / Kambi||N/A||Kambi||Conditionally approved||Conditionally approved|
|Valley Forge||IGT / GAN||partypoker / GVC||FanDuel||Conditionally approved||Have not applied|
|Stadium Park Philly Live! Casino||N/A||GAN||N/A||Conditionally approved||Have not applied|
|Presque Isle Downs||Golden Nugget||NetEnt||SBTech, IGT||Conditionally approved||Have not applied|
|Lady Luck Nemacolin||N/A||N/A||N/A||Did not apply||Have not applied|
|Mohegan Sun Pocono||N/A||PokerStars||N/A||Application pending||Have not applied|
|MGM Resorts||bwin.party||partypoker / GVC||N/A||Application pending||Not eligible|
|Golden Nugget NJ||NYX||N/A||N/A||Application pending||Not eligible|
Table last updated: Nov. 1, 2018
Some casinos got on the ball early, most planned ahead, and some are still unsure if they will even take part. Given the incredibly high tax rates, unlike New Jersey, the market is not a no-brainer money maker for casinos.
The application window for casinos began in May. Casinos had 90 days to turn in an application for a comprehensive package of the three available licenses. For $10 million, casinos got the following:
- Peer-to-peer game license to offer things like online poker
- Online slots license
- Online table games license
In total, nine casinos applied for the $10 million license. They are as follows:
- Stadium Casino
- Mount Airy
- Sands Bethlehem
- Hollywood Casino
- Valley Forge
- Harrah’s Philadelphia
- Sugarhouse Casino
After the period for applying for all-in-one applications closed, two more Pennsylvania casinos jumped in the fray via a la carte $4 million interactive licenses.
Presque Isle Downs applied for both online casino slots and online casino table games for a total of $8 million.
In a somewhat surprising move, Mohegan Sun Pocono applied for all three interactive licenses, costing them $12 million instead of the $10 million it would have cost had they acted earlier.
Rivers Casino initially applied for a wholesale interactive license but elected to rescind that application before it was processed. In a related move, Stadium Casino withdrew its online poker portion of its application, resulting in a $2 million refund.
That leaves a grand total of 11 a la carte interactive licenses that are still up for grabs. The remaining casinos in the state, The Meadows and Lady Luck Nemacolin technically have first dibs on these. However, both already have partnerships with casinos who already applied for licenses, so don’t expect them to do so.
In September, the PGCB approved the process for qualified outside entities to apply for the remaining licenses. Any qualified gaming entity (QGE) can submit their company for considerating by the board, so long as they are operating in a regulated gaming market.
The window for QGEs to apply closed on Oct. 31. During that period, two big names from nearby New Jersey threw their hats into the ring. MGM Resorts used Borgata’s New Jersey casino license to apply for all three. Golden Nugget in Atlantic City also applied, but only for slots and table games, not poker.
The plan for awarding licenses to QGEs was to do so via a random drawing. However, with only two applicants, so long as they are approved by PGCB, they will get every license they want. That leaves the state with:
- Three remaining online poker licenses
- One table games license
- One slots license
While New Jersey online casinos took off, some PA casinos, like Harrah’s Philadelphia, could rest easy. The property’s sister operations in the Garden State meant they were best positioned for both online casino and online poker. WSOP.com and Caesars and Harrah’s Casinos worked out the kinks and gained practice satisfying regulations.
Others, like Sands Bethlehem, doubled down on the stance the Keystone State should oppose all online gambling. Rather than prepare for the possibility, Sands CEO Sheldon Adelson fought hard against what many thought was inevitable.
After all, the East Coast casino market is increasingly tough. And with a neighboring state raking in $20 million in revenue a month in 2017, the New Jersey online casino market became too successful for competitors to ignore. So those without partners went out and found some.
Online casino partnerships
Long before Pennsylvania lawmakers legalized online casinos, land-based operators started teaming up with software providers and existing New Jersey online casinos. These casinos all brokered deals with potential real-money gaming providers, be it directly or indirectly with its Pennsylvania properties.
As part of Caesars Entertainment, Harrah’s has been good to go online from the jump. Caesars is the only company operating online gambling products in both Nevada and New Jersey.
Mohegan Sun Pocono
The tribal operator gained experience operating an online casino thanks to Resorts Casino in Atlantic City. Mohegan Sun manages the day-to-day of the land-based New Jersey casino. As a result, the company has experience working with both PokerStars and software provider Nyx. Scientific Games finalized its acquisition of Nyx in January 2018.
Mount Airy Casino
Mount Airy Casino is one of the mid-tier casinos in the state. As such, it aimed to get into the online game, where it could be more competitive. The property signed a deal with 888 in 2015.
The casino also announced an expansive partnership with The Stars Group. With the deal, not only will the company use the PokerStars brand for online poker and online casino, it will also leverage the BetStars sports betting brand in Pennsylvania.
The Philadelphia casino Parx is the top dog of land-based casinos. When it came to online casinos though, Parx brass was less keen on passing online gambling than others. Justifiably, the casino didn’t want inferior land-based partners to gain ground because of a superior online product.
Nonetheless, Parx signed a multi-year agreement with online casino software provider GAN in 2014. GAN already launched a social casino bearing Parx’s name.
Presque Isle / Churchill Downs
In January of 2018, horse racing juggernaut Churchill Downs purchased the Erie, PA racino Presque Isle Downs. At the time of purchase, Churchill Downs readily admitted that gambling expansion, particularly online gambling and sports betting, were areas the company wanted to expand into.
However, Churchill Downs was notably absent from the list of applicants for the $10 million online gaming licenses. It is possible they are taking a piecemeal approach though and offering table games and slots without poker.
The first is a deal with SBTech, who will provide the comprehensive online gambling software platform for Presque Isle in Pennsylvania when iGaming launches.
The other was a partnership in New Jersey with online leader Golden Nugget. The Nugget already partners with Rush Street casino SugarHouse, letting the Philadelphia casino operate under its online gaming license. It will also let Churchill Down use its land-based casino license to offer mobile sports wagering in the Garden State.
When CDI presented its online gambling plans to PGCB in October, it indicated it will be operating under the Bet America brand.
The Meadows and Hollywood Casino were presumably going to go with Scientific Games as their real-money gaming partner. After all, that is who they worked with for the HollywoodCasino.com social casino. However, at a PGCB meeting to get their interactive certificate application approved, Penn National revealed they will be working with IGT for their PA product.
At the Oct. 3 meeting discussing its interactive gaming plans, Sands Bethlehem was more than a little candid about its disdain for online gambling. However, because the sale of the property to the Poarch Band of Creek Indians (PCI), they presented and applied on behalf of the new ownership. Meanwhile, PCI cannot move forward with a gaming partnership until the sale is closer to final.
SugarHouse and Rivers
Rush Street Gaming owns and operates both Rivers in Pittsburgh and SugarHouse Casino in Philadelphia. The company also includes an online wing, Rush Street Interactive.
In 2016, Rush Street launched a SugarHouse-branded online casino in New Jersey, leveraging the casino’s large customer base in the Garden State. PlaySugarHouse.com operates under Golden Nugget’s online casino license. However, there are some rumors that Rush Street will up its game with a partnership with NYX/Scientific Games.
The Boyd-owned property has an online casino deal in place with IGT and GAN to power its in-house online gaming offerings. It could also leverage its longstanding partnership with GVC/partypoker for the online poker element of its operations.
Our analysis of Pennsylvania online casino impact
In partnership with OnlinePokerReport.com, PlayPennsylvania.com has produced a new white paper: “Analysis: Pennsylvania Moves To Regulate Online Gambling.” This free paper (available for download below) provides an objective look at the key points of the recently-passed online gambling bill, the revenue potential for Pennsylvania’s casinos, and the tax potential for the state.
Read and download the free white paper below:
Pennsylvania casinos gain revenue from a largely new market
The casinos spread across Pennsylvania all stand to benefit significantly from regulated online gambling. Our base case projections call for first year revenue of $154 million, increasing to $275 million annually by year 5. These projections are broadly consistent with the performance of New Jersey’s legal online casino market. Critically, numerous pieces of evidence suggest that this revenue will largely be new revenue from new customers, and not simply a reshuffling of existing casino revenue.
Hundreds of millions in revenue flows to the state
We estimate that Pennsylvania would see over $400 million in tax revenue in the first five years. There are three primary sources of revenue from regulated online gambling for the state:
Online poker will contribute, but faces questions
Pennsylvania is a large state, but still modest one in terms of the number of unique poker sites the market can support. If too many rooms spread that player base too thin across the state’s online poker rooms, the market at large could suffer.
Online poker is long past the point of novelty. New games and new features will be required both to allow regulated online poker sites to compete against offshore sites and to compete against other games vying for consumer spend.
Will PA join forces with other states that have legal online poker? If the player base can expand to include populations in New Jersey, Nevada, and Delaware – along with any states that follow PA – online poker in all participating states would benefit.