Pennsylvania Online Gaming Applications Finally Roll In
Pennsylvania casinos have applied for online gaming licenses – finally.
Several months after Pennsylvania opened the online gaming application period, nine of the state’s 13 casinos applied for licenses. All the applications came within a week of a deadline that would have made an exorbitant fee even steeper.
Each casino will pay a $10 million initial fee to the commonwealth, the highest introductory fee in the nation for online casinos. That fee allows each facility to offer slots, table games and poker for money. State regulators charged $4 million for each but offered a “discount” if a casino purchased all three together, which all nine applicants did. Any other facility that applies for online gambling will not be eligible for the discounted rate.
Any facilities that receive a license will have to pay a 54 percent tax on slot revenues and 16 percent for online table games as well as online poker. Only the state’s existing land-based casinos are currently eligible to apply for a license.
Not surprisingly, this has dampened enthusiasm for Pennsylvania gambling operators. In 2017, the Pennsylvania government enacted one of the nation’s most sweeping gaming laws, putting the Keystone State near the forefront of gambling expansion. But high taxes and fees have upset gaming providers and deterred others.
Majority Of Casinos Apply
Ultimately, the prospect of expanding in the Pennsylvania market proved too much to pass up for the gaming operators. The nation’s fifth-largest state by population, Pennsylvania garners more than $2 billion annually on slots alone. With online gambling generating millions each month in neighboring New Jersey, it behooved Pennsylvania’s casinos to pursue their own revenue opportunities.
Casinos were also wary of lost opportunities to the state iLottery. The government-supported program offers more than a dozen slot-style games, which the casinos said violated their exclusive right to offer those type of games, when and if they were licensed. After fielding the complaint, the iLottery changed its marketing but still offers the same style of games.
As a government entity, the lottery pushes its proceeds toward programs to support Pennsylvania’s elderly. It has an incentive not to limit its game, which has already generated millions in revenue, even with casino opposition.
That was another reason why the casinos went ahead with the steep fees of the application process. According to the Pennsylvania Gaming Control Board, the casinos that filled applications are:
- Parx Casino (Bensalem) - application received July 12
- Live! Hotel and Casino Philadelphia - received July 13
- Mount Airy Casino Resort (Mt Pocono) - received July 13
- Sands Casino Resort Bethlehem - received July 16
- Hollywood Casino at Penn National Race Course (Grantville) - received July 16
- Valley Forge Casino Resort (King of Prussia) - received July 16
- Harrah’s Philadelphia Casino & Racetrack - received July 16
- Rivers Casino (Pittsburgh) - received July 16
- SugarHouse Casino (Philadelphia) - received July 16, 2018)
Sports Gambling Also Faces Obstacles
High fees have also been a challenge for would-be sports betting operators. Pennsylvania was one of the first states to legalized sports wagering, doing so even before the official Supreme Court ruling came down that overturned the federal ban. But as of July 17, no gambling entities have applied to take single-game sports bets.
As the law stands now, the government will tax 36 percent of all winnings, the highest rate in the nation of any state to legalize wagering. Meanwhile, New Jersey and Delaware, with rates around 10 percent have racked in millions of dollars within the first month of legalized sports betting.
Like with online betting, there was hope from gambling providers that the state legislature would budge on its high tax rates on wagering. That wait-it-out approach didn’t work for online betting, even though it depressed if not outright deterred gambling partners. It remains to be seen what will happen for sports betting.
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