Pennsylvania Online Poker And Casino Are Definitely Coming As First License Applications Roll In

Despite being an initial opponent of online gambling, the Parx Casino managed to be the first to get in an application to launch online gambling under new Pennsylvania laws.

The news was first broken by PlayPennsylvania.com.

Hot off the presses– @parxcasino is the first casino to apply for an online gambling license in Pennsylvania https://t.co/dK1JJQdwv6

— PlayPennsylvania (@PlayPANews) July 13, 2018

Within hours, Mount Airy submitted its application and then shortly before the end of Friday, Stadium Casino joined the fray, even though it has no employees and no operating casino.

The Pennsylvania Gaming Control Board (PGCB) deadline for this phase of issuing licenses passed on July 15, but other casinos that decide they want a license can still apply, albeit at a higher price.

• Parx application can be seen here
• Mount Airy application can be seen here
• Stadium Casino application can be seen here

The PGCB did not immediately respond to an inquiry about whether other casinos had applied over the weekend, other than these three.

Parx and Mount Airy both pay $10 million

Both Parx and Mount Airy have applied for the full $10 million license package consisting of:

• A peer-to-peer online gaming license which allows them to offer online poker
• A license to offer online slot machines
• A license to offer online table games

Future applicants will have to pay $4 million for each of the package elements.

GAN and 888 are the tech partners with PokerStars to come

Parx has partnered with GAN to produce its online product. GAN has been in the news lately as the supplier of an online casino to the new Atlantic City property, Ocean Resort Casino.

The one thing GAN is not widely known for is online poker.

No official statement has yet been made, but it could be that online poker is not a top priority for Parx.

Yes, they’ve applied for the relevant license, but surely they would have announced a partnership with a well known online poker brand if they were going to launch the game anytime soon.

Stadium Casino is in a bizarre situation. It’s nowhere near ready to launch, and can’t identify key staff to the regulator because it hasn’t hired them yet.

Nevertheless, it obviously wanted to make sure it got its hat in the ring before the prices went up. Stadium’s plans remain obscure, but it definitely wants to be a player in the market.

Mount Airy has gone with a big name poker brand; 888 Poker, a company with which it has had a business relationship since 2014. Mount Airy is also expected to partner with PokerStars, which would give it a revenue slice from the two biggest names in US poker.

888 is the only active poker room in the US to be operating in all three regulated markets, Nevada, Delaware and New Jersey. Pennsylvania’s new law allows for interstate compacts, so it looks likely that in the not too distant future, 888’s network will combine its poker room liquidity across all four states.

PokerStars must fight for top spot in the US market

Recently, 888 in partnership with Caesars, became the top dog in the New Jersey poker market, squeaking past PokerStars. The additional liquidity that the company will get from combining the online poker player pool from four states should allow it to offer tournament guarantees significantly larger than those that PokerStars offers in its New Jersey-only player pool.

PokerStars is not likely to take this threat lying down. Having invested substantially in the potential of the US market, it won’t want to relinquish its global market leader role by failing to compete with 888. At the very least it will be looking to combine its New Jersey player pool with its Pennsylvania players.

Mount Airy is the smallest of Pennsylvania’s Category 2 casinos, but allying with the two biggest names in US online poker suggests that it has grand ambitions.

What does this say about Pennsylvania’s new laws?

Only three applications before the July 15 deadline doesn’t sound like a massive vote of confidence in the Pennsylvania online gambling market.

The $10 million upfront license fee may be steep, but it hasn’t deterred the smallest casino from getting into the action. Mount Airy’s competitors can all afford the investment, so long as they believe the return will be there.

Ultra high taxes on slots will be a major hurdle the casinos have to overcome in competing with black market sites that can offer much higher customer win percentages.

Taxes on poker are more reasonable, but the profits from a Pennsylvania operation are probably going to be lower than the profits being made in New Jersey.

The other Pennsylvania casinos may have made some tough decisions about the costs of being early market entrants versus the potential revenues, and decided that they’ll stand back and see how their competitors fare before dipping their own toes into a new market.