Pennsylvania casinos are preparing for expansion as the terms of a 2017 gaming package become active. Each will soon be allowed to offer online gambling and sports betting statewide.
Limited expansion extends to the lottery, which has rolled out a stream of new products in recent months. Customers can now play real-money games on their smartphones, and PA casinos are crying foul.
On Wednesday, a group of seven filed joint litigation against the Commonwealth, seeking to stop the PA iLottery from offering “online casino-style games” to the public. The state’s Department of Revenue and Secretary C. Daniel Hassell are named in the suit.
The casinos’ complaint boils down to two major sticking points. The lottery is providing games that resemble their slot machines, and they’re providing them to customers as young as 18 years old.
The legal gambling age in Pennsylvania is 21.
The PA Lottery has expanded twice in recent years.
A 2014 amendment allowed the agency to offer instant-win games online, including things like Powerball and Mega Millions. The package passed last year, known as Act 42, included much broader authorizations. It permitted things like virtual sports, Keno and new types of electronic draw games.
It’s those games that are at the root of the complaint. Here’s the summation from the casino filing:
The plain intention of Act 42 was to authorize online lottery games while preserving the rights of the Petitioners — who must pay a minimum of $10 million each to obtain interactive gaming certificates … — to offer interactive gaming without unfair competition from the iLottery, which has no license fees, a lower age restriction, pays no taxes, and enjoys the imprimatur of the Commonwealth.
The coalition is working to protect its turf, unhappy about the new and questionably legal competition. The group is seeking an injunction against the Commonwealth, financial relief for “irreparable injury,” and a declaration that the Department of Revenue is acting in violation of the law.
You can see the filing here:Pages from iLottery Petition for Review
The filing lists these seven petitioners:
It’s ultimately for the courts to decide, but there does seem to be some gray area — or some generous interpretations of the law.
The issue comes down to the material differences between iLottery games and slot machines you can only find at casinos. Here what constitutes an approved “internet instant game,” from Act 42:
… a lottery game of chance in which, by the use of a computer, tablet or other mobile device, a player purchases a lottery play, with the result of play being a reveal on the device of number, letter, or symbols indicating whether a lottery prize has been won…”
That’s a little broad, but the subsequent prohibitions help clarify what may not be offered:
… games that represent physical, Internet-based or monitor-based interactive lottery games which simulate casino-style lottery games, specifically including poker, Roulette, slot machines and Blackjack.
Regulations published thereafter mirror those prohibitions, but the agency seems to have a different interpretation of the rules than casinos do.
The casinos argue that many iLottery games use imagery and terminology that make them indistinguishable from slot machines. The word “bet” isn’t typically associated with the lottery, but it appears in iLottery products. Some games cited in the complaint have matching titles or themes in the casino market, too:
You can judge the similarities for yourself from the gameplay screens for those games:
Some advertisements filed as exhibits even included the term “instant win slot-style games.” Other titles, the coalition contends, give an illusion of choice or randomness akin to gambling. Here’s more from the complaint:
True to its advertising, iLottery offerings are casino-style games that mimic the look, sounds, and feel of slot machines. The games also meet the Gaming Act’s definition of a “slot machine.”
The only real differentiator is that these are still “draw games,” if only by technicality. Reels are not spun. Instead, in line with the law, “symbols” are “revealed.”
The similarities shouldn’t be surprising, perhaps. The games for the PA iLottery are provided by Scientific Games, whose primary line of business outside of lotteries is supplying slot machine titles to casinos.
Back in June, all 13 PA casinos sent a letter to Gov. Tom Wolf asking him to shut down the iLottery. The group threatened to escalate the matter if Wolf failed to do so. “We will be forced to consider all actions available to us to preserve our rights,” they wrote.
With no intervention from the governor, those threats are now materializing in court.