The Road to Online Poker Legalization in Pennsylvania
When New Jersey and Delaware legalized online poker in 2013, some Pennsylvania lawmakers became concerned that the state’s brick-and-mortar industry would soon start falling behind. With the Keystone State fearing these neighboring states may cut into state gambling profits, lawmakers started to explore the possibility of online poker as a viable option.
Online Poker in Pennsylvania
The passage of online poker in New Jersey prompted Pennsylvania to examine the issue. In December 2013, the Pennsylvania State Senate passed SR 273, a resolution that called for a study of future viability of online gambling in Pennsylvania. The Legislative Budget and Finance Committee (LBFC) was commissioned with conducting the study and they released their findings on May 7, 2014.
According to the 206-page report, iGaming could produce over $307 million annually in revenue with $113 million going to the state in the form of taxes. Online poker in Pennsylvania could generate up to $129 million in revenue while online casino games could generate up to $178 million in additional income.
Lawmakers made attempts in both 2014 and 2015 to pass iGaming legislation but both attempts failed to come to a vote. The tide began to turn in favor of iGaming legalization in 2016 when iGaming was added to the state budget.
In July 2016, a $1.3 billion budget was approved by Gov. Tom Wolf that included a $100 million earmark from online gambling reform. Despite being a part of the budget, attempts to pass iGaming legislation still fell short of full passage.
Lawmakers came into 2017 looking to pass online gambling reform and the State Senate quickly passed H 271, a comprehensive gambling package that would regulate online poker, casino games, DFS and more. The measure passed in May but various roadblocks, including a controversial provision regarding Video Gaming Terminals (VGTs) put the matter on the sidelines until the fall.
State budget woes continues to plague lawmakers with the state facing a $2 billion shortfall. Lawmakers continually had difficulty passing a budget deal and after yet another failed attempt in early October, Gov. Wolf announced a plan to fund the budget and that plan would have killed iGaming regulation efforts.
Lawmakers began working diligently to come up with a new budget plan and on October 17, 2017 that new plan was passed by the House. The new plan earmarked $200 million from Pennsylvania online poker and online gambling expansion, up from $100 million a year earlier. This new budget plan revived efforts to pass H 271 and on October 25, 2017, the Senate passed an amended version of the bill 31-19.
The next day, the Pennsylvania House also passed H 271 by a margin of 109-72. This allowed the bill to move on to Gov. Tom Wolf’s for his signature. On October 30, 2017, Gov. Wolf signed the bill to make Pennsylvania the fourth US state to regulate online poker and iGaming.
Will PokerStars Be Permitted to Operate in Pennsylvania?
Good news! PokerStars will be allowed to offer online poker in Pennsylvania. There was some concern that the state would adopt a bad actor clause and block the company from offering services. However, the company is fully licensed in New Jersey and odds are that the vetting of the NJ Division of Gaming Enforcement was enough to satisfy any concerns by Pennsylvania lawmakers.
What this means is that The Stars Group will be allowed to apply for a license in Pennsylvania and operate online poker, casino gambling and even DFS should they desire. In addition, we fully expect that at some point in the future the site will join forces with PokerStars NJ to form the second largest regulated online poker network in the United States behind WSOP.com.
Once Online Gambling is Passed, Which Sites Will Offer Poker Online?
Any site wishing to provide online poker services in Pennsylvania must go through the complete licensing process similar to brick-and-mortar casinos. The only exception is if a casino offers a proprietary product. It is unlikely that most will go the route of setting up their own site, so we’ve put together a short list of sites we expect to offer online poker in Pennsylvania.
WSOP.com is the online portal for Caesar’s Entertainment and the #1 legal poker site in the U.S.
Caesar’s owns one casino in Pennsylvania, Harrah’s Philadelphia, and will likely be one of the first companies to apply for a license.
WSOP.com presently operates in both Nevada and New Jersey and is the backbone of the interstate online poker network. New Jersey will soon join the network, giving players on WSOP PA access to a player pool including players from four states.
888’s All American Poker Network (AAPN) could pick up multiple contracts as there are over 10 properties in the state. Racinos could benefit the most from a partnership with the AAPN because of the ready-made platform along with a combined player pool that will soon include players from New Jersey, Nevada, and Delaware.
888 Poker is also the only internet poker provider operating in all states where online poker is legal, providing excellent liquidity for any prospective partner
PartyPoker had a very successful return to the U.S. and is currently operating in New Jersey. Penn National and Mohegan Sun are currently the frontrunners to partner with this popular provider.
Should Penn National pick up PartyPoker, this could be a precursor to a future long-term multi-state partnership between the sites. Penn National operates several Hollywood Casino branded casinos in the United States and many expect other states to follow Pennsylvania’s lead and regulate online poker in the near future.
One place where online poker will not be offered is Sands Bethlehem. It is currently owned by Sheldon Adelson who is anti-online gambling in the U.S. He created the Coalition to Stop Internet Gambling to portray online gambling in the worst possible light in an effort to gain support. His coalition’s attempts to stop online poker in Pennsylvania failed, so don’t expect the casino to offer online gambling in any form. However, there have been multiple rumors that the casino could be sold in the near future. Should that happen, it’s hard to see the new ownership passing on iGaming revenue.