Pennsylvania has been receiving applications for online gambling licenses under its new gambling law and is entering a hearing and review phase. The first three licenses were issued last week: Parx Casino in Bensalem, Harrah’s Philadelphia Casino & Racetrack in Chester, and Mount Airy Casino Resort in the Poconos. Nine of the state’s 13 casinos met deadlines last month to apply for $10 million licenses that would permit them to offer virtual table games, slot games and online poker.
It’s unclear if any or all the casinos will offer slots because of the high 34 percent tax rate. Most successful iGaming jurisdictions have taxes well under 20 percent, which is considered the maximum for a successful iGaming operation. Pennsylvania online casinos can opt in or out of any of the three types of gaming and pay the appropriate tax rates.
But don’t expect these online casinos to be up and operating anytime soon. Officials say there is much work to be done.
“We also have a good bit of background work to do with other entities, other services, that will partner with these casinos in doing that,” said Doug Harbach, Pennsylvania Gaming Control Board director of communications. “And with regulations so while we’re getting closer to being able to launch it at this point we’re still a little bit down the road from seeing that happen.”
Harbach says the state would like to see the online casinos debut by the end of the year.
In the Mount Airy submission, the casino added a noted partner. The Stars Group will bring its online poker, casino game and sports betting brands to Pennsylvania under a partnership with Mount Airy Casino Resort.
The companies said they expect to launch as soon as they receive licensing approval from state regulators.
“We’re excited to take this next step as the Stars Group looks to broaden its presence in the United States,” said Matt Primeaux, senior vice president of strategy and operations, USA at the Stars Group. “In partnership with Mount Airy Casino Resort, we believe we’re well positioned to capitalize on opportunities in the Commonwealth by bringing our world leading offerings to Pennsylvania players.”
Stars group said it will use its existing technology and player account management platform for its offerings in Pennsylvania, providing customers with a single account, common wallet, various online and mobile depositing and withdrawal options, and a seamless offering of betting and gaming options, the release said.
“As one of Pennsylvania’s leaders in entertainment, offering internet sports wagering and gaming and partnering with the Stars Group is the obvious next step for us to continue diversifying our casino offerings,” said Vincent Jordan, vice president of marketing and gaming operations, Mount Airy Casino Resort. “Introducing internet gaming through the Stars Group will provide compelling opportunities for our customers, particularly our younger customers, who are ready to experience the next gaming challenge.”
The Stars Group currently offers online poker and casino games in New Jersey through a partnership with Resorts Atlantic City. The two have also announced plans to offer sports betting under the BetStars brand in that state.
Stars Group officials recently told stockholders that the company is in a “transition year” as it continues to expand through acquisitions and entry into markets like sports betting in the U.S. During an earnings call, CEO Rafi Ashkenazi said the company expects to begin operations in Pennsylvania by the first quarter of 2019.
Stars Group reported that its consolidated total revenues were by 34.8 percent for the quarter year-over-year to $411.5 million.
The Stars Group owns PokerStars, the world’s leading online poker site. PokerStars continued to accept U.S. bets after the passage of the Unlawful Internet Gaming Enforcement Act in 2006. While ownership has changed, it took several years for the Stars Group to get a license in the U.S. New Jersey finally licensed the group in 2014, where it is partnered with Resorts Casino Hotel in Atlantic City.
In a related story, the Pennsylvania Gaming Control Board has approved a set of regulations for sports betting that officials say are sufficient to allow sports books to open. However, none of Pennsylvania’s 12 licensed casinos have applied for a sports betting license, the Associated Press reported.
Since the board does not meet again until September 12, no sports books in the state’s casinos will begin operating before the start of the NFL season. Licensed casinos can pay $10 million to operate sports betting.
Pennsylvania lawmakers prospectively legalized sports betting last October, but included a 34 percent tax rate, which is considered too onerous to make a profit or to keep black market sites out of the state.
