If there was any confusion before this past week about online casino skins, Pennsylvania lawmakers cleared it up quick. Reps. Jason Ortitay and Rosita Youngblood sent a letter to Pennsylvania Gaming Control Board (PGCB) Chairman David M. Barasch explaining the intent of the online gambling portion of the states gaming laws. Ortitay, the man who sponsored the bill, did not mince his words when describing his position on whether or not multiple companies (skins) should be able to use a casino license to operate in Pennsylvania. Letter adds clarity to debate between casinos The matter of skins goes back to PA legislation about PA online casino licenses. As casinos explore new ways to generate revenue, utilizing their license to strike up partnerships with multiple online casinos and, therefore multiple iGaming websites would generate income. 888.com, a popular global online gambling operator who has a partnership with Mount Airy Casino, sent a letter earlier this month to the PGCB defending the right of casinos to hire multiple operators to run websites under one license. Their argument focused on two main factors: the success of other markets whove allowed multiple skins and the brand power they can bring to Mount Airy. To their first point, New Jersey is a sterling example of how multiple skins have worked well for land-based casinos. The state has 25 online casinos distributed across seven casinos. Borgata has 10 casinos under its license and Caesars/Harrahs have a combined six sites. Parx argued against skins Before 888.com sent in their letter to the PGCB, Philadelphias Parx Casino voiced their support of limiting casinos to one skin per license, meaning each casino would operate one site that would implement the casinos branding. Parxs argument took the side of Pennsylvanias workforce, noting that allowing multiple skins would mean that companies that arent based in Pennsylvania would be able to make money from the contracts they have with PA casinos. An influx of out-of-state companies would mean in-state candidates wouldnt have the chance to get jobs in what will be a formidable new industry within state lines. Parxs objection to multiple skins has the support of Penn National, too, although, in light of the recent letter from Ortitay, it seems the two casinos will be in the minority. Parx isnt averse to being the squeaky wheel, though. They opposed the states gambling expansion bill, too. As one of the states top-two revenue earners, limiting gambling to one skin would most likely benefit the casino because it would maintain a somewhat level playing field of revenue. However, if multiple skins are allowed to exist, smaller casinos and Parxs Philly-area competitors could boost their revenue by forming multiple partnerships. In theory, Parx could counter those moves by forming their own partnerships.
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The first daily fantasy sports contests with state government oversight went off in Pennsylvania last weekend. Pennsylvanians may have been playing daily fantasy sports contests in gray market for the past few years. However, the Pennsylvania Gaming Control Board (PGCB) sent out a press release this week announcing government oversight of the contests began over the weekend. Pennsylvania lawmakers made the games legal as a part of a major gaming expansion legislation package passed in October 2017. According to the board, the daily fantasy sports contests marked the first official roll-out of new forms of gaming made legal under the legislation. Online casino, online poker, and online lottery sales were also made legal in the gaming expansion. The Pennsylvania Lottery plans to launch online lottery sales this month. However, with the regulatory and licensing process still ongoing, the states first online casino and online poker sites are not likely to launch until the fourth quarter of the year. Legal fantasy sports launches Fantasy sports contests involve participants competing against one another by drafting a team of pro athletes. Participants earn points based on the statistical performance of the actual players in real-life sporting events. Daily fantasy sports take place over a finite period of time. However, traditional fantasy sports are often conducted over an entire season. Contests are run like tournaments. The top point-earning teams winning the largest pieces of a prize pool made up of entry fees after the operator takes a cut. Under the new gaming expansion laws, Pennsylvanians 18 years of age or older can now legally participate in fantasy sports contests. However, they can only do so with approved operators. Gaming board executive director Kevin OToole said the following operators have been approved:
Fantasy Football Players Championship
Sportshub Fantasy sports: Now regulated and taxed OToole said fantasy sports operators are paying taxes in PA. Plus, local players are enjoying the benefits that government oversight of the games can provide: The tax on fantasy sports operators adjusted revenue is 15 percent. The state began charging it on Saturday, April 28. All taxes collected by the Pennsylvania Department of Revenue from fantasy sports operators will go into the states General Fund. OToole said local players who may have played fantasy sports contests in the past probably didnt notice any change: More information regarding fantasy sports regulation in PA is available on the boards website. In addition to fantasy sports regulation in PA, the board oversees all aspects of the states casino industry. There are 10 stand-alone and racetrack casinos in PA, along with the two smaller resort casinos. According to the board, these operations generate approximately $1.4 billion in tax revenue annually. The majority of the money goes to property tax reduction for PA homeowners.
It now seems the Pennsylvania Gaming Control Board (PGCB) needs to make some important decision. Last weeks round of mini-casino auctioning went without a bidder, and now it appears that the state may not sell all 10 of these licenses. As a result, the PGCB faces two roads diverged in a wood. What is a mini-casino? A scaled-down version of traditional casinos, mini-casinos feature 300 to 750 slot machines. Some may include up to 30 table games. This subsect of the PA gaming industry became an option after Pennsylvania passed a satellite casino law last October that allowed for 10 new casinos to fall into a new category of the gambling establishment: Category 4. Licenses for these properties would cost $7.5 million. Adding 30 table games would cost an additional $2.5 million. However, these satellite properties cannot be located within 25 miles of existing Category 1, 2, or 3 properties. Timeline leading up to latest no-show bids As the first rounds of auctions neared, over 40 percent of the 2,560 municipalities in Pennsylvania opted not to participate. That included most of Philadelphia and all of Lancaster County. The consensus, particularly in Philadelphia, was a fear of oversaturation of casinos. In Januarys first two auctions, Penn National ($50.1 million) and Stadium Casino ($40.1 million) beat out a combined six other bidders to obtain mini-casinos. Three bidders participated in the Feb. 8 auction, with Mount Airy Casino coming away with the license for just shy of $21.9 million. Parx Casino ($8.1 million) landed a mini-casino during the Feb. 22 auction, followed again by Penn National, which spent $7.5 million as the only bidder April 4. That was a subsequent auction as the state attempted to sell off the remaining licenses. Interestingly, Penn National has been the most vocal opponent of mini-casino expansion. As the only casino in the central area of Pennsylvania, Penn National was steadfast in its claim that the satellite properties would result in significant and unique damage to its Hollywood Casino, according to a 57-page lawsuit against the state that was filed in federal court in January. Yet while the company is continuing to fight to get the satellite casino law overturned, Penn National figured it would still participate in the auctions as a backstop in case its lawsuit is dismissed. Devil you know, right? What happens to the auctions now? The likelihood is high that the auction process stops with five licenses still up for grabs. The PGCB may decide to hold a third and final round of bidding for approved non-casino license holders. Then again, there is strong outside interest to land a mini-casino site. Note that Category 4 licensees are not eligible to participate in online gambling, so that is not an option for mini-casino license holders. Now it is time for the PGCB to assess the situation. The next round of auctions, if they took place, would be open to groups outside of existing casino license holders, in which case the PGCB would predetermine eligibility requirements. Buying out Pennsylvania casinos is becoming a hot ticket. It affords outside companies the opportunity to get in on the ground floor as the world of gaming is due to expand. Still, purchasing these Category 4 licenses will not provide owners to offer such experiences. The logic goes that casinos with higher-category licenses could provide sports betting, et al., but a mini-casino on its own would not have that kind of freedom. To boot, a Cat 4 casino would not have access to any of the available interactive gaming licenses. Basically, if an outside group invested in a mini-casino, that would be all it was investing in. The other option for the PGCB is to shut down the auctions altogether. Half of the 10 mini-casino licenses are still available, and the last auction went without a bidder. Expectations have already been met. Large bids from the first few rounds generated over $120 million. Consider that, had all 10 licenses sold for the base cost of $7.5 million, the result would be $75 million in revenue. The ideal locations for mini-casinos, allowing for buffer zones from existing casinos, have already been taken. And over 1,000 municipalities in the state have opted out of hosting a mini-casino. Available options are slim for the PGCB. Perhaps it is time for it to take the money and run.
Its better to be lucky than good. Last month, the $457 million Powerball winning ticket was sold in Lancaster County. The winner will collect the largest jackpot ever won in the state, according to Lottery Executive Director Drew Svitko. It seems that St. Patricks Day has brought some great luck to this fortunate Powerball player and we are anxious to meet our big winner or big winners, Svitko said in a Philadelphia Tribune article. According to the Philly Trib article, the winning ticket was sold at a Speedway gas station in Manheim. The municipality is a small town about 90 minutes outside of Philadelphia. PA Lottery expecting more big wins this May It seems that 2018 will be an unprecedented year for the Pennsylvania Lottery and the $457 million Powerball winner has nothing to do with it. This May, the Lottery will roll out online versions of some of their games. Additionally, there will be video lottery terminal games (VLTs) at Pennsylvania bars. These VLTs are different than the video gambling terminals (VGTs) included in the gambling expansion bill. VLTs are strictly PA Lottery machines, whereas VGTs will offer table games and slots of various types and are only allowed to be installed in certain facilities. Also, there is an opt-out list for VGTs. Perhaps the main reason why VLTs differ from VGTs is the threat they post to PA casinos. VLTs arent necessarily going to pull someone away from a brick-and-mortar casino. However, VGTs could coax gamblers away from land-based casinos as well as future satellite casinos slated to be built. The future of PA Lottery: draw, Keno, scratchers, and virtual sports While the PA Lottery wont be launching any games that state residents can access via a computer, phone or tablet, there are plans to expand beyond terminals found in bars. The line-up of gambling options includes draw games, Keno, scratchers, and virtual sports, each of which has their own nuances. There is no indication as to how similar online and land-based games will be. For example, at the time of publishing, online Powerball and MegaMillions were not slated for launch this May. Also, the scratch-offs that people can buy at gas stations and convenience stores any number of retail locations may not be congruent with what you can access online. Other factors to keep in mind:
You have to be 18 years old to play
Credit cards are prohibited at iLotto terminals
You can add yourself to a five-year self-exclusion list
Keno, scratch-off and draw games are coming in May
Virtual sports will launch in June on VLTs All regulations and timelines are based on information available at the time of publishing. However the rollout takes place, Pennsylvania Lottery Spokesperson Gary Miller said he anticipates that the variety of games available to players will increase their interest in the lottery. We anticipate that by attracting new players and broadening their awareness of lottery games, it will help to grow sales of traditional games, Miller said. In the meantime, with no winner coming forward to collect that Powerball prize yet, it will be a race to see which comes first: a name of a new multi-millionaire or the launch of Pennsylvanias online lottery.
New numbers from the Pennsylvania Gaming Control Board (PGCB) indicate the states 12 casinos grossed 0.2 percent more in April 2018 than they did in April 2017. While Aprils growth was slight, it marks two months in a row that PA slots revenues have risen over the previous year. Breaking down the numbers: Winners and losers Of the 12 casinos in the state, only four posted gains over April 2017:
Valley Forge Casino Resort: 9.07%
Presque Isle Downs and Casino: 7.22%
Parx Casino: 6.04%
Rivers Casino: 4.32% Parx and Rivers are two of the top three revenue earners in the state. The April bottom line benefited from this fact, as the two casinos steadied the losses sustained by other properties. In fact, April marks the second-straight month that all four casinos on the list have posted positive numbers. In March, the gains were as follows:
Valley Forge: 13.64%
Presque Isle: 11.53%
Parx: 9.01% Meanwhile, the other eight casinos struggle through April. Heres a rundown of their slots revenue losses:
Lady Luck Nemacolin: -10.70%
The Meadows Casino: -8.36%
Mohegan Sun Pocono: -3.46%
Harrahs Philadelphia: -3.05%
Hollywood Casino: -1.93%
Sands Casino Resort: -1.01%
SugarHouse Casino: -0.90%
Mount Airy Casino Resort: -0.40% The good news for the Mohegan Sun, Sands, and SugarHouse is that their March gains trumped their April losses, putting them ahead in slots for the past two months. The good news about the April numbers is that they represent two consecutive months of positive YOY growth. According to PGCB Communications Director Doug Harbach, the average swing in YOY slot revenue ranges from 2 percent growth to 2 percent decline and has been steady for the past few years. Looking ahead: How will online slots play out? A downturn of brick-and-mortar revenue isnt out of the ordinary during January and February, as inclement weather tends to roll in and keep people away from casinos. As the weather warms and steadies out, slots revenue should level off and continue an upward climb. However, once the bad weather rolls around next year, brick-and-mortar slots revenue may take an extra hit from the online slots that presumably will be available in January and February. New Jersey is a good test case for this, as January and February were tough months for land-based casinos as historic rainfall and storms barrelled through the state. However, the losses casinos experienced werent as bad as they could be. Gamblers who didnt want to brave the bad weather stayed and home and gambling on New Jerseys online casinos. The revenue from those online gamblers tempered Atlantic Citys losses. Online slots act as an extra source of revenue but, when it comes to temperamental New England weather, the extra online revenue sources act as insurance against anything that would keep people out of land-based casinos.
1 Whats ahead for Mason-Dixon Downs
2 Local residents dont want a racino
3 Has PA gaming industry already his saturation point? Adams County businessman David LeVan hopes luck will be on his side this time when trying to put a casino near Gettysburg. Right now there are 12 casinos in Pennsylvania. If LeVan has anything to say about it, that number will become 13 in a few years. In January, LeVan applied for the only available casino license in the state. That license would allow gambling along with harness racing. The name of the proposed casino is Mason-Dixon Downs. It will, assuming permits are secured, operate in Freedom Township. In a letter drafted by LeVans legal counsel, he said the casino and racetrack will boost the local economy. Mason-Dixon Downs will deliver unprecedented opportunities for Freedom Township, surrounding communities, Adams County, local business, and most importantly, residents through hundreds of jobs, said in a copy of the letter posted on EveningSun.com. Host communities have received tens of millions of dollars in gaming funds for important projects and enhancements. Whats ahead for Mason-Dixon Downs To build the casino and racetrack, LeVan will have to draft a land development plan. It will have to appease the Pennsylvania Horse Racing Commission and the Pennsylvania Gaming Control Board. Should LeVan be successful with both organizations, hell have licensure as a designated harness-racing facility and a Category 1 casino. However, LeVan faces strong opposition from Freedom Township residents. Local residents dont want a racino LeVan has tried to win approval for a license twice in the past 12 years. Both times he failed, and both times he proposed sites near Gettysburg. One of the factors impeding his progress is the opinions of locals, who are, in many cases, fiercely protective of the tranquil environs in and around Gettysburg. The most vocal opponents are part of No Gettysburg Casino, an initiative focused on keeping casinos out of the area. No Casino Gettysburg Chairperson Susan Paddock called Mason-Dixon Downs a failing proposition in an interview with a local Fox affiliate. The nation is infuriated at the idea of taking this hallowed ground and putting a casino anywhere near it, Paddock said. Its a failing proposition because there simply arent enough people here to make a casino work. The No Casino Gettysburg contingent was also outspoken in 2011 when the PGCB decided not to grant LeVan a license for a Gettysburg-area casino. Penn Live wrote that opponents in attendance the day of the PGCBs ruling let loose with shouts, cheers and ovation when the decision was announced. Has PA gaming industry already his saturation point? In addition to the concerns above, there is also the possibility that the state simply doesnt need more casinos. Gaming revenue in PA has been down year-over-year in recent months. And while a new casino could be additive in revenue, it might also cannibalize existing revenue. The state legislature is considering a wide range of possible gaming expansions, including legislation that would authorize PA online casinos.
The gambling expansion bill signed by Pennsylvania Gov. Tom Wolf at the end of October includes in it the legislative thumbs-up for sports betting. The catch? The Professional and Amateur Sports Protection Act (PASPA) doesnt allow sports betting in Pennsylvania because the state didnt have it when PASPA was signed. So, in order for sports betting to take place in Pennsylvania, PASPA needs to be overturned. Up until 2017, the thought that PASPA would be dissolved was merely conjecture. That changed when, earlier this year, the Supreme Court of the United States agreed to hear the appeal of New Jersey and its Thoroughbred Horsemens Association. The two parties fought their way through the legal system to the highest court in the land in an effort to bring legal sports wagering to the Garden State. The state and the association are arguing that PASPA violates whats known as the anti-commandeering principle. This is an aspect of the 10th Amendment asserting that Congress cant pass laws violating states right to pass their own laws. A brief the state filed earlier this year put it this way: PASPA compels States to regulateindeed, prohibitsports wagering and therefore exceeds Congresss authority. Will SCOTUS overturn PASPA? Trends say yes Over the past few months, there have been several studies that indicate public sentiment about sports betting has changed, namely in the way that Americans seem to have stopped viewing it as a scourge. The most notable of these studies was one highlighted in a Washington Post article that pointed out that, for the first time since PASPA kicked in in 1993, the public is in favor of sports betting. A few weeks later, think tank Competitive Enterprise Institute indicated that New Jersey will be the first of many states to legalize sports betting once PASPA falls. The organizations report addressed the anti-commandeering principle. It further noted that PASPAs initial intent curbing illegal sports betting by regulating legal sports betting failed in the midst of a multi-billion black-market gambling economy in the US. No matter how one feels about sports betting or any other issue in particular, the importance of preserving the states right to make their own decisions on these matters should be painfully clear, the report said. PASPA has failed to stop the spread of illegal sports gambling, prompted the rise of an enormous gambling black market, increased criminals profits, prevented states from raising millions in tax revenue and enacting consumer protections. SCOTUS will hear the case on Dec. 4 and make a decision by the beginning of next summer. At that point, well know the extent to which PA can apply its theoretical legalization of sports betting.
The Pennsylvania Gaming Control Board announced this week it will begin accepting applications for interactive gaming platforms on June 4. This Despite the fact the interactive gaming platform providers arent sure exactly what they will be applying for just yet. Interactive gaming platform providers are not online casino operators. Instead, these are the companies that provide technology and software platforms for online casinos. Companies like Gamesys, GVC Holdings, NYX Gaming Group, and GAN have been providing software platforms for New Jersey online gaming sites since online gambling launched there in 2013. Clearly, these tech companies will be applying for the right to provide software platforms for online casinos in Pennsylvania. Its how many sites PA online casino license holders will be able to operate using these software platforms that are still in question. PGCB approves online gaming regulations The gaming board approved two sets of regulations related to PA online casinos and online poker last week. Missing was any language addressing whether or not there will be a limit on the number of online gambling websites licensees can launch. Multiple websites operating under a single license holder are referred to as skins. New Jersey limits the number of skins allowed to operate under a single online gambling licensee to five. Experts say this has helped maximize both operator and state revenue from online gambling. However, representatives from Parx Casino and Racing and Hollywood Casino at Penn National Race Course have told the board it wants it to limit the number of skins in PA to as little as one. This appears to be a misguided effort to prevent the online gambling market in PA from cannibalizing the existing land-based casino industry. Misguided because most industry insiders agree that allowing multiple skins will be good for the entire industry and help revenue growth across the board. Two PA lawmakers, Reps. Rosita Youngblood and Jason Ortitay, recently said legislators never had any intent on placing a limit on skins. Skins question remains PA casinos have been invited to apply for online gambling licenses beginning April 16. But with the licenses for online slots, table games, and poker costing $10 million for all three or $4 million separately, the casinos will want to know where the state officially stands on the issue of skins before applying. The interactive gaming platform licenses come with a $1 million licensing fee attached. So, clearly online gambling software platform providers want an answer on skins sooner rather than later as well. The board is planning to approve the third set of online gambling regulations at its next meeting on April 2. It is expected the skins issue will be addressed in these new regulations. Key players in the fledgling PA online gambling industry certainly hope so. Gaming platform application a lengthy process In the meantime, theres time to pour over the extensive 59-page interactive gaming platform application. Its currently available on the boards website. A document that size, and steps like fingerprinting and background checks to follow, suggest the process will be a long one. The licensing process for online gambling operators will likely run into September. As a result, it initially appeared online gambling sites could launch in PA by the fourth quarter. However, this June 4 deadline for interactive gaming platform licenses and the lengthy process to follow may change things. In fact, it may even push the states online gambling launch into 2019.