New target for PA online poker: July 1

Pennsylvania Online Gambling Still Months Away, Says Top Regulator

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Poker players and gamblers in Pennsylvania will have to wait several more months for the chance to play online. On Wednesday, state officials delivered testimony to that effect during a budget hearing before the House Appropriations Committee.

Kevin O’Toole, executive director of the PA Gaming Control Board (PGCB), told the committee that regulated gambling sites won’t appear until sometime around July 1. Online sports betting figures to be on a similar launch timeline.

The updated outlook comes some 16 months after Gov. Tom Wolf signed the PA online gambling bill into law. The first legal sportsbooks opened late last year, but digital expansion has so far been limited to the PA online lottery.

Watch the full PGCB testimony here.

Wire Act opinion causes ‘modest delay’

The US government and the Wire Act are at least partially to blame for the delay.

Last month, the Department of Justice published a reinterpretation of the 1961 federal law, expanding its provisions to broadly cover interstate gambling. The opinion has sent uncertainty rippling through states with legal online gambling, but the reaction from Pennsylvania regulators has been the most cautious of the group.

Subsequent to the reversal, the PGCB sent a letter to all prospective PA interactive gaming operators advising them to comply with the opinion in full.

Here’s O’Toole on what that means:

“What we wanted to accomplish in that letter was to make sure that the casinos thoroughly read that reinterpretation and looked very closely at their plan for implementing interactive gaming in Pennsylvania.

“There had been an expectation that those iGaming operators who were partnering with our casinos in Pennsylvania — if they already had infrastructure in another jurisdiction, that they could leverage that to reduce the cost of implementing iGaming. But with that reinterpretation, it became quite obvious that everything had to be on an interstate basis.”

According to O’Toole, relocating and testing servers will create a “modest delay” for the rollout of online gambling. His office is currently reviewing the responses from PA casinos to the request.

The PGCB also expressed concerns over the processing of electronic payments related to legal gambling in light of the new opinion.

Parx still on course, though

Nothing above affects the plans for Parx, it appears. The Philadelphia casino was the subject of a licensure hearing on Thursday, during which the topic of server location came up.

Here’s CEO Anthony Ricci on the PGCB directive:

“I don’t think it necessarily affects what we intend to do other than ensuring that all our activity takes place in Pennsylvania. We were contemplating possibly putting servers in New Jersey, which is what a lot of people who were in New Jersey and Pennsylvania were contemplating doing. That’s not an option now, but we hadn’t located our servers yet anyway.”

Ricci also echoed the board’s uncertainty about payment processing. Electronic payments, he said, represent about two thirds of the company’s horse betting transactions.

“We could still get started,” he said, “but I think it will adversely impact the business if we can’t get credit cards though.”

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What to expect from PA online poker

Seven of the state’s casino licensees are approved to offer PA online poker, facilitating market entry for some of the biggest names in the game.

PokerStars has partnered with Mount Airy, for example, while partypoker will deploy its platform in the Commonwealth under the license of Valley Forge.

Those sites will be ring-fenced to the Pennsylvania market, at least in the short term.

PGCB Chief Counsel R. Douglas Sherman indicated that PA is unlikely to join the multi-state online poker agreement that currently links Nevada, New Jersey, and Delaware.

“Unfortunately the DOJ opinion likely has put the kibosh on the interstate liquidity agreement ability. Because then you would be playing across state lines, which now appears to be prohibited.”

Sherman testified that the board remains interested in liquidity sharing, should the interpretation change.

Pennsylvania will represent the largest regulated online poker market in the US when it goes live, but a lack of interstate play will keep sites from reaching their full potential.

- Eric is a reporter and writer covering regulated US gambling, sports betting, and DFS. He comes from a poker background, formerly on staff at PokerNews and the World Poker Tour.
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