Online Gaming Licensing Remains Unspoken for in Pennsylvania

Summary: A total of seven licenses are still up for grabs in the state of Pennsylvania involving online gaming, but will there be any takers?

Online gambling has been slow going in the state of Pennsylvania. Late last year, the state approved online slots, table games and poker, but the licensing process and actually seeing operators go online is taking forever. Once the application process was opened up for licensing, it was slow going and now, seven licenses still remain. It now begs the question as to if the remaining licenses will be applied for and by who?

Slow Process

When the licensing process began in the state, operators were slow to begin their application process. Many analysts felt that operators were slow to apply due to the high tax rate, with 54% set for online gaming. The price point per license was also an issue. Operators first had to pay $10 million for all three or they could wait until the licensing process was open per license which led to a $4 million per license payment.

Over the past few months, a few operators have been approved and things are starting to move along. During a meeting of the Pennsylvania Gaming Control Board on September 12th, the board decided to provide the remaining seven licenses up for grabs via random draw. The licenses are not only offered to existing operators in the state, but now, any qualified gaming entity can apply.

There are certain regulatory requirements that a company considered a qualified gaming entity must meet. First, they must have licensing in another gaming jurisdiction and be in good standing. They must also be located in a jurisdiction that has licensing standards that are comprehensive and have similar safeguards in place as those that are required in Pennsylvania. The entity must also have business experience and expertise to be able to operate an online gaming system.

What’s Left?

The online gaming licensing options that remain include 3 for online poker gaming, 2 for online table games and two for slots. Operators can apply and pay a $4 million licensing fee to offer services in the state.

Current operators in the state have all applied for online gaming except for two; the Meadows Racetrack & Casino and Lacy Luck Casino. The owners of both casinos have already applied via other Pennsylvania properties, so it doesn’t make sense for them to apply with another venue.

We may see either The Stars Group or MGM deciding to vie for licensing. The Stars Group is currently partnered with Mount Airy, who is also partnered with 888. In the future, we may see an online license obtained by the two online gaming operators as they already have established brands and could do well in the region as a stand-alone operator.

MGM may also show interest in licensing as they have a partnership with Boyd Gaming. The Valley Forge Casino has now been approved for a takeover by Boyd Gaming, so we may see online gaming becoming a subject of interest once the acquisition has been completed.

The process is also now open to foreign gaming companies that do not have a vested interest in the United States as of yet. Basically, the door is wide open for anyone to try and obtain licensing from the

seven that remain in the state. The Board should be announcing a date soon for the upcoming drawing for the remaining licenses, so by that time, we should find out who is interested and what they might provide in the state.