Online casino gaming has seen a fruitful performance in Pennsylvania that now spans over half a decade of operations. Just last year, performance reports revealed that the Keystone State had overtaken New Jersey as the United States’ largest igaming market.
This success on the online casino stage has urged the commonwealth’s regulator, the Pennsylvania Gaming Control Board, to open up petitions for more companies to apply for the appropriate licences to take advantage of its growing market and operate an online casino within the state.
Doug Harbach, Director of Communications for the PGCB, has held a position on the regulatory board since 2006. In that time, he has overseen the journey the Pennsylvanian online casino market has taken – from regulation first being discussed in 2017 to its launch in 2019.
Outlining the growth seen in Pennsylvania’s igaming space, Harbach explained: “While poker revenue numbers have stayed stable, there has been a significant increase over the past year of play and revenue for slot machines and table games.
“To be specific, both of these sectors have seen an increase of over 23 per cent from 2021 to 2022, with both also ranking in the top three jurisdictions in the country for states that have commercial casinos.”
“We require background investigations on all applicants, licensees, principals and key employees”
Harbach ensured that the board will stick to its solemn requirements when reviewing each application for a new licence, stating that the PGCB’s stance on which operators are deemed suitable for the state “really has not changed since the establishment of legalised gambling in Pennsylvania 17 years ago”.
Each requiring a one-time licence fee of $4m, the PGCB has 12 remaining igaming licences up for grabs. These opportunities include licences for three online slot operations, three house-banked table game operations and six non-house-banked table game operations, such as poker.
Commenting on the application process currently being undertaken by the PGCB, Harbach said: “We require background investigations on all applicants, licensees, principals and key employees. For individuals, the approval is made only if the board sees the applicant as a person of good character, honesty and integrity, and is therefore eligible and suitable to be licensed.
“Beyond that, we will need to see who and how many requests come in for these additional igaming licences.”
As state officials seek new licensees to bring more wealth to PA’s rapidly expanding igaming sector, many industry delegates may be starting to question whether the PGCB can keep control of an igaming market that is growing exponentially and, as a result, becoming more difficult to govern.
Throughout 2022, the PGCB had to take action on a number of regulatory failures taking place at land-based venues. The board issued fines and punishments for a range of transgressions, spanning from self-exclusion failures to individuals leaving children inside parked cars in casino parking lots as they gambled in the establishment.
“…we continue to seek efficiencies in properly monitoring all forms of gaming without any significant staff additions”
Detailing how the organisation has managed to maintain a particular level of governance when balancing each sector, Harbach noted that “for land based casinos, we hire additional personnel to be onsite and monitor regulatory issues”.
He continued: “The PGCB has added additional staff over the past two years to oversee igaming and sports wagering initiatives and will continue to monitor any additional staff as growth continues. At the same time, we continue to seek efficiencies in properly monitoring all forms of gaming without any significant staff additions.”
Unfortunately, a number of these regulatory issues overseen by the PGCB have been fuelled by something that is out of the board’s control – alcohol.
Last year, the Washington Trotting Association was penalised $40,000, stemming from a pair of incidents in which Hollywood Casino at the Meadows staff served alcohol to visibly intoxicated patrons.
One of these incidents saw Hollywood Casino personnel serve an individual 17 draft beers during a near 13-hour period, leading to that patron falling over and injuring themselves.
Another intoxicated incident saw an individual provided with five mixed drinks, three shots and a beer in a period of three-and-a-half hours. This patron then went on to physically assault two other customers and two security guards at the casino.
Commenting on the abundance of alcohol-related failures, Harbach revealed that, to this date, the PGCB has issued over half-a-million dollars in fines for matters involving booze.
“To date, the board has approved fines to casinos totalling $552,500 related to matters involving an intoxicated patron”
“While the PGCB does not regulate the sale of alcohol at casinos,” explained Harbach, “each casino has in place and has submitted the board its alcoholic service guidelines. To date, the board has approved fines to casinos totalling $552,500 related to matters involving an intoxicated patron.”
Despite these issues, which are experienced in any jurisdiction that operates casinos, the PGCB has managed to balance both its online and brick-and-mortar casinos enough to see its gambling market continue to thrive, turning over $464.48m in yearly revenue.
Whilst the state is home to a number of much-loved sports institutions, such as the Philadelphia Phillies, Pittsburgh Pirates and Super Bowl LVII runners-up the Philadelphia Eagles, igaming continues to outperform sports betting in revenue, contributing $133.11m compared to $39.25m from sports wagering.
Harbach was quick to acknowledge the wide appeal for igaming, and casinos in general, as grounds for its continuous dominance over sports betting, stating that: “Sports wagering will never produce the amount of revenue as casino slots and table games, or even igaming.
“It has broad appeal to a certain audience such as sports fans, but not as broad an audience as those other forms of gaming have.”
Regulating online services can often be tricky for regulators as problem gamblers are able to gain access to casino platforms as they please, at any time of the day and can jump from one platform to another with ease.
“We have in place options that permit online players … to be assisted in any gambling problem”
As permitting new licences could cause a potential rise in these irresponsible gambling incidents, Harbach detailed how the regulator offers protective measures to reduce harm caused by online casino gambling.
He noted: “We have in place options that permit online players, whether casino-type online gaming or online sports wagering, to be assisted in any gambling problem.”
Harbach listed self-exclusion as an example, which he suggests “allows an individual to voluntarily request to be banned from all legalised igaming activities”.
He continued: “When on this list, a person is prohibited from collecting any winnings, recovering any losses or accepting complimentary gifts or promotions.”
The PGCB’s Director of Communications went on to list self-imposed limits, including deposit limits, spend limits, wager limits, daily time-based limits and temporary suspension, as other ways in which the board has set up each operator to ensure that responsible gambling is prioritised.
Whether encouraged by the PGCB’s regulation, or the qualities of an active online casino market, Pennsylvania’s igaming sector and the funding it brings to the table could encourage other states around the country to consider launching an online casino space of their own.
“Any operator has to be able to work within the guidelines and regulations of their state”
After all, Pennsylvania was only the second state to introduce igaming, following New Jersey which launched its market almost six years earlier in 2013.
Having already knocked NJ from its online casino perch, several states have aimed to repeat this feat with subsequent market launches in West Virginia, Michigan and Connecticut.
Each of these jurisdictions will understand that a power dynamic between regulators and operators is key for an igaming market to succeed, and PA can provide a stellar example of keeping operators under a watchful eye.
Greenwood Gaming operates PARX Casino, a land-based establishment located in Bensalem, Pennsylvania. The company’s online services have also reached the Keystone State, with Marc Oppenheimer, Chief Marketing Officer at Greenwood Gaming, noting that its “online casino business is growing nicely in PA”.
When questioned on the operator’s relationship with the regulator for Pennsylvania, Oppenheimer said: “Any operator, whether land based or online, must comply with all PGCB regulations. We have processes in place to do that. And, likely due to this focus, we’re one of the least fined operators in PA.”
He added: “We work very well with the PGCB. Any operator has to be able to work within the guidelines and regulations of their state. The PGCB is responsive to questions for clarity, that’s all we can ask.”
The Pennsylvania igaming market is expected to continue its strong momentum into the remainder of 2023. And while new licences may present the PGCB with an increased workload, a boost in its gambling economy could see the state secure itself as a staple jurisdiction for all sectors of gambling, whether online or not.
