Pennsylvania iGaming applicants set to face luck of the draw

14 September 2018

Pennsylvania will open up online wagering with a “co-ordinated launch” that could come before the end of this year, although out-of-state iGaming licence applicants may have to rely on the luck of the draw to break into the market.

The Pennsylvania Gaming Control Board (PGCB) – which approved applications from Penn National Gaming’s Hollywood Casino and Rush Street’s SugarHouse Casino earlier this week – have now given so-called Qualified Gaming Entities a window from October 15-31 to apply for a total of seven licences that remain available out of 39.

Only two of the state’s 13 casinos – Lady Luck Casino and Meadows Racetrack – did not apply for any of the iGaming licences, while Presque Isle Downs and Casino only applied for slots and table games licences.

There are three remaining online poker licences available, as well as two certificates each for online slots and online table games.

The licences are available for $4m (£3.1m/€3.4m) – the same price that was offered to the state’s casinos during a 30-day period that followed a first phase in which casinos could have acquired all three licences for $10m. It is understood that one of the state’s casinos, which missed the deadline for the first phase, ended up agreeing to pay $12m for all three licences.

Operators that are based outside the US can apply for licences in the window next month and if demand outstrips supply, a random draw will determine the successful applicants.

PGCB communications director Doug Harbach told iGamingBusiness.com that the draw process would be “public”, although an exact format has not been decided yet.

“Whether it will involve taking names out of a hat or a box, we don’t know yet, but everyone will be able to see what happens,” he said.

Harbach, who said there had already been enquiries from firms based outside the state, also said that applicants for all three licences would not necessarily be favoured over those applying for individual licences.

Of the 11 casinos to have applied for iGaming licences, five have now been approved, with Penn National Gaming’s Hollywood Casino and Rush Street’s SugarHouse Casino following Harrah’s Casino Philadelphia, Mount Airy Resort Casino and Parx.

Harbach said that it is likely that more applications from the state’s casinos will be approved by early October.

“There’s still a lot of back-end work to be carried out by casinos and partners and we also have to licence partners of the operators,” Harbach told iGamingBusiness.com, when asked when iGaming would launch fully in the state.

“We would like to do some sort of co-ordinated launch. It might not be all of them, but perhaps a batch of them who are ready to go.

“We’re probably still at least a couple of months off that, but it is likely to happen if not towards the end of this year, then early next year.”

In comparison with some other US states, Pennsylvania has accelerated attempts to exploit gaming opportunities before the end of the year, with Harbach citing a "myriad" of expansion initiatives in the industry, including in sports betting. However, Harbach insisted that such expediency is not at the expense of the due process and rigorous due diligence.

“The state decided to expand our current gambling offerings to fill revenue holes and there is an expectation to do this as swiftly as possible,” Harbach said.

“We have already secured $110m in iGaming licence fees and we are moving on with sports wagering pretty well.

“However, we wouldn’t rush if that meant damaging the integrity of the new gaming market. We’ve always taken our role as protector of the public’s interests as first and foremost.”

Image: Santeri Viinamäki