After two licensing rounds, in-state casinos have claimed 32 of the 39 available Pennsylvania online gambling permits.
During round three, the Pennsylvania Gaming Control Board will make the seven remaining licenses available to qualified outside entities.
Eleven of the 13 casinos eligible to apply did so during the first two licensing phases, and several have already been approved. Ten of those casinos applied for all three categories of licenses:
The eleventh, Presque Isle, will offer online slots and table games but decided against online poker.
|Online Slots||Online Table Games||Online Poker|
The initial application process left two slots licenses, two table games licenses, and three poker licenses up for grabs to qualified outside entities. What exactly are those?
The Pennsylvania gaming law describes a qualified gaming entity as:
“… a gaming entity licensed in any jurisdiction which has satisfied the requirements of this chapter and any other criteria established by the board, including financial and character suitability requirements.”
It’s basically an operator that holds a legitimate gaming license and meets Pennsylvania’s requirements. That could be a casino corporation operating in another state (like Golden Nugget or Pala Casino), or an overseas gaming company like GVC, The Stars Group, or 888 Holdings.
According to the PGCB, qualified entities can submit applications for one, two, or all three license categories. Each license costs $4 million. The winners will then be drawn at random from all eligible applicants until no licenses remain.
If the first applicant selects all three, the number of remaining licenses will be reduced to one slots, one table games, and two poker licenses. If they only want slots and table games license, that extra poker permit remains on the table for the next applicant.
This process repeats until a selected applicant’s desired license(s) don’t match up with those remaining.
In those instances:
With its hefty licensing fee and exorbitant online slot tax rate, Pennsylvania creates a high barrier to entry for prospective applicants. On the other hand, it is one of the earliest adopters of online gambling, and is the largest state (by population) to legalize online gambling.
The possibilities for potential licensees are endless, but some companies do stand out from the crowd.
PokerStars has already entered into a strategic partnership with Mount Airy, but because of the way Pennsylvania regulations were written regarding skins, it won’t be the prominent, customer-facing brand that it is in New Jersey.
As such, PokerStars is an odds-on-favorite to make a run at an online poker license (and pool players with Mount Airy), and it could even apply for all three categories. Its online casino and BetStars sports betting platforms are already part of the NJ market.
Owning its own license would offer Stars a clean brand, unassociated with a land-based casino. That makes all the sense in the world for a company with such broad recognition in the US.
Like PokerStars, MGM already has its foot in the door via a partnership with Boyd Gaming, which owns and operates Valley Forge. By similar logic, it may also want a clean playMGM online casino and poker room in Pennsylvania. MGM has its sights set on being a national online gaming operator, and “playMGM at Valley Forge” just doesn’t have the same ring to it.
That would also open the door for numerous intra- and interstate networking possibilities in Pennsylvania and beyond.
DraftKings and FanDuel jumped into legal sports betting head first, and both have already expressed interest in operating an online casino.
FanDuel Sportsbook already has an “in” for Pennsylvania sports betting through a partnership with Valley Forge (by way of its deal with Boyd Gaming. That creates an interesting dynamic between MGM, Boyd and FanDuel. Like TSG and MGM, FanDuel could have its sights set on a clean, multi-vertical presence in the Commonwealth.
DraftKings Sportsbook hasn’t announced an official partnership with a PA casino, but based on its early returns in New Jersey, securing an alliance wouldn’t be overly difficult. I would place DraftKings in the same category as FanDuel, a strong US brand that could benefit from procuring its own license.
Golden Nugget is the runaway leader in the New Jersey online casino market, and it would love to replicate that success elsewhere.
Launching in Pennsylvania would expand GN’s marketing reach well into the neighboring state, opening up marketing opportunities in the expensive Philadelphia metro area.
Foxwoods is lagging behind its Connecticut rival Mohegan Sun when it comes to online gambling. Mohegan is already active in NJ and will launch an online casino in PA through its Mohegan Sun Pocono casino.
Pennsylvania opening up licenses to outside entities gives Foxwoods, which is one of the most progressive companies in the gaming space, an opportunity to level the playing field.
Kindred (Unibet) is one of the more intriguing possibilities.
The company’s only foray into the US market so far is in New Jersey, where it partnered with Hard Rock for sports betting. But CEO Henrik Tjärnström told investors during the company’s Q2 2018 earnings call that there’s potential for Unibet elsewhere in the US:
“Our working hypothesis right now is when sports becomes available, we would see it as a big benefit if we could go with the Unibet brand, albeit we fully appreciate that it’s unknown in the US market, but it has worked well in Europe and we believe it could work well in the US as well.”
Kindred has solid offerings across the board (sports, poker, casino, and more) and could be a major player in the US if it can gain a foothold.