Sands Casino in Bethlehem Would Be Eligible for an Online Casino
Pennsylvania’s legislature will debate legalizing online gambling in the state in the coming legislative session. This week, consultants from Econsuit Solutions Inc. of Philadelphia discussed the scenarios with Pennsylvania lwawmakers.
The report was commissioned in December 2013 by Pennsylvania state senators, who wanted to learn about the feasibility and possible budgetary advantages. According to the Econsuit consultants, online gambling would bring in an estimated additional $307 million per year. For those numbers to be reached, the experts say the state’s online casinos would have to reach goals and avoid the technical issues which plagued New Jersey in its online gaming rollout.
Realistic Financial Benchmarks
The $300 million goal seems ambitious, yet attainable. When New Jersey Governor Chris Christie began championing online gambling in his state, he predicted the state would collect an additional $1 billion in revenues per year. The projections for New Jersey’s online casinos and card rooms have been lowered into the $200 million to $220 million range.
New Jersey has a population of just under 9 million people. Pennsylvania, on the other hand, has a population of 12.7 million–a full 25% to 30% more people. Therefore, Pennsylvania should be able to exceed New Jersey’s numbers by a solid 25%, at the least. Other reasons exist why gaming might be more lucrative in Pennsylvania.
Learning from Others’ Mistakes
New Jersey has had several technical glitches which have hampered the rollout and lowered revenues. Online gamblers download geolocation software on their computers and mobile devices which indicate which state they live in. The geolocator technology in New Jersey often showed people on the borders of the state to be either in New York or Philadelphia. These people could not register an account on the sites and gamble.
Also, the credit card payments are said to have had only a 44% success rate. Many New Jersey residents trying to use Visa or MasterCard to fund their accounts found they could not do it. While many of these gamblers no doubt found alternative ways to fund the accounts, a significant number of them are likely to have gotten frustrated and found other forms of entertainment.
If Pennsylvania can avoid such pitfalls, then the casino operators in the state should be able to make more per signup than their counterparts in New Jersey. Thus, a $300 million projection is not unrealistic.
Dominic Pileggi: iGaming Deserves a Serious Look
Senate Majority Leader Dominic Pileggi said he remains non-commital on whether he will support a gaming bill or not, but says online gambling “deserves a serious look”. Senate President Pro Tempore Joe Scarnati was more emphatic when he released a statement saying the authorization of online casinos “will be explored”.
When the Economsuit report was commissioned, one concern the senators had was whether Internet gaming would draw customers away from the land casinos. The consultants concluded that online gaming draws a younger crowd which, by and large, makes smaller bets. Given the younger demographic, it is unlikely licensed online gambling would cannibalize the customer base of the brick-and-mortar operations.
Pennsylvania Online Gaming Licenses
The likeliest candidates to receive online gambling licenses are those land-based gaming operations. Three state so far have legalized gambling: New Jersey, Delaware, and Nevada. All three states wanted to bolster their land-based gambling operations, so their lawmakers limited the licensing process to the native gambling interests.
This is a handy way to screen potential applicants, because the businesses have already been cleared on background investigations. It also assists in the collection of revenues, because these gaming interests already are sources of taxes, fees, and fines. The biggest reason to select for the casinos and racetracks of Pennsylvania, though, is the boost it would give to those business operations. Such large complexes give jobs to thousands of Pennsylvania residents.
Federal Bills Face Uncertain
One act of the U.S. Congress could make all the talk academic. Earlier this year, a bipartisan bill was introduced in both houses of Congress which would ban all online gambling in the United States. Gaming industry experts and Washington political insiders have yet to reach a consensus whether such a bill could get traction in the Congress.
If such a law was passed, then lawmakers in Pennsylvania could not legalize gambling on the Internet in any form. The “Restoration of the Wire Act” bill is a response to Attorney General Eric Holder’s decision in 2011 to enforce a more conservative interpretation of the 1961 Wire Act, in which the Department of Justice only prosecutes sports betting sites, but not online casinos or card rooms.
