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Why Pennsylvania Online Gambling Could Be Even Bigger Than NJ

The US online gambling industry looks set to grow by leaps and bounds this year.

There are now indications Pennsylvania‘s first online gambling sites will be ready to launch in the fourth quarter of 2018. Plus, there are signs they‘ll be an even bigger success than they are in New Jersey‘s record-setting market.

The Pennsylvania Gaming Control Board announced Wednesday existing Pennsylvania casinos can soon start applying for the first online gambling licenses.

The state is planning to open up a 120-day window for existing PA casinos to apply. Over the first 90 days, Pennsylvania casinos will be allowed to apply for a license to operate in three online gambling categories at a cost of $10 million.

Those categories are:

PA casinos wanting to apply for individual licenses will then be allowed to apply for separate online gambling categories at a cost of $4 million each. Once the 120 days is up, if any of the 39 licenses available remain unclaimed, other qualified gaming entities can apply.

In the meantime, the gaming board’s Executive Director Kevin O’Toole made it clear the board is still in the process of crafting temporary regulations to govern online gambling operations.

PA online gambling set to launch in Q4 2018

As a result, it appears the first online gambling sites in the state will begin operations sometime in the fourth quarter of 2018.

By the end of the licensing process, it will be clear which of the 13 PA casino license holders want in on online gambling.

However, there have been some big changes in who holds those licenses. All suggesting something rather big is at stake here.

Since December 2017:

  • Penn National Gaming acquired the Pittsburgh region’s Meadows Racetrack & Casino as part of its purchase of Pinnacle  Entertainment.
  • Boyd Gaming bought the Philadelphia-area Valley Forge Casino Resort.
  • Churchill Downs acquired Presque Isle Downs.
  • Sands Bethlehem was sold to Wind Creek Hospitality.

The first two represent some rather large casino company’s making moves in the state. However, it’s those last two that may tell the biggest story when it comes to online gambling.

Churchill Downs came right out and said the reason it bought Presque Isle was to get in on PA’s emerging online gambling market.

It’s not yet clear if Wind Creek Hospitality has the same desires. However, as the previous owner of Sands Bethlehem, Las Vegas Sands did everything it could to prevent online gambling coming to the state.

Getting out now, in what amounts to the 11th hour before launch, is as much an admission that online gambling is going to be huge in PA as anything else. At least now they get avoid choosing between becoming a dinosaur or a hypocrite.

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The New Jersey success story

Online gambling has been an unmitigated success in New Jersey. In fact, the numbers have been nothing short of impressive over the past couple of years.

New Jersey online gambling sites set a record for gross revenue in 2016 at $196.6 million. That helped turned around a decade of declines in the Atlantic City casino industry. In 2017, the burgeoning industry got even bigger. It posted new record revenues of $245.6 million.

Plus, new monthly records for revenue were set in January and February of this year. The sites pulled in $21.96 million in gross revenues to start the year and $21.99 million last month.

Now, New Jersey online gambling has generated over $766 million in revenue since it launched in 2013. It will likely hit the $1-billion mark by the end of this year or early 2019.

However, the biggest casino companies in the country weren’t exactly scrambling to get in that market before it launched. At least not the way they are in Pennsylvania right now.

PokerStars tried to buy the now-shuttered Atlantic Club Casino Hotel just to get into online gambling. However, things were pretty quiet on the casino ownership front in New Jersey at that time.

Yet another reason to think the US online gambling industry is on the precipice of something rather big right now.

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