PA casinos and lottery have been engaged in a turf war on online gambling

PA Casinos Lose First Battle Vs. Lottery In Court Case Over Online Gambling

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On July 12, Pennsylvania iLottery internet based games breathed a collective sigh of relief.

Meanwhile, state casino operators are left licking their wounds after their preliminary injunction request was denied by Commonwealth Court Judge Renee Cohn Jubelirer.

In detail, the list of Pennsylvania casinos fighting against iLottery are:

Notably, these casinos received approval by the state for PA online gambling.

More about preliminary injunctions

According to Wex, a legal dictionary, the definition of a preliminary injunction is:

An injunction that may be granted before or during trial, with the goal of preserving the status quo before final judgment.

So, this means that a preliminary injunction is temporary and not final, by any means. Why the rush? Recall that on July 15, Parx and Hollywood Casinos launched online casinos. Clearly, casino operators want the best possible start for their online offerings.

Also, although the casino operators initially wanted Judge Cohn Jubelirer to enjoin all iLottery games, they backtracked to asking for a preliminary injunction on “autoplay, reveal all, adjustable bet and bonus games.” The casinos argued that these features are akin to their slot machine offerings, a finding that the court obviously does not agree with enough to issue an injunction.

Analyzing the memo on PA online gambling

In an extensive legal memorandum, Judge Cohn Jubelirer effectively disposes of the casinos’ arguments.

First, there is no quantifiable way to measure how iLottery hurts online casinos’ revenue and vice versa. Remember again, only two online casinos launch on July 15.

Secondly, over a year has passed since iLottery’s launch. Granted, casinos forked out serious cash to obtain licenses from the state for online gambling. On the other hand, the Lottery also expended significant funds on development and marketing. In addition and more importantly, the Lottery has over 100,000 customer accounts, some with funds. Most directly affected are the players with funds and the affiliates.

Thirdly, both the Lottery and casinos agree that the General Assembly, who created the gaming laws of PA, intended for iLottery and online casinos to coexist.

However, when Cohn Jubelirer examines the Gaming Act and Lottery Law, discrepancies and ambiguities arise. She asks:

Which raises the question, does “Internet instant game” include “interactive lottery games” which do not simulate casino-style games?.. And as previously described, another key term, “internet instant games” is defined differently and potentially more expansively, in the Gaming Act than in the Lottery Law.

Lastly, Cohn Jubelirer notes that if she grants the injunction, there would be less funds available to support programs for older Pennsylvanians. Recall, the Lottery’s proceeds go to supporting the Keystone State’s elderly population. Lottery officials previously projected a profit of $31 million from online games this fiscal year.

What now for PA casinos and lottery?

In truth, Cohn Jubelirer’s denial of a preliminary injunction does not end litigation here.

The likelihood is high that casinos continue with the case. Up next, parties need to exchange evidence including expert reports. Also, pre-trial motions have a deadline of Aug. 30.

- Vanessa Lutz graduated from Washington and Lee University School of Law with a J.D. She played poker professionally and then took some time off to have a family. Now she is combining her experience as a contributor to OPR.
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