Hopefully, the Legislature of Pennsylvania takes a proverbial look across its Eastern border, most days if not every single one of them, and observes New Jersey, a state that knows how to derive revenues from online gambling. The fact of the matter is that every day that the State of Pennsylvania fails to Legislate a bill to legalize and regulate online gambling by state-owned casinos is just another day that they lose out on a potential source of tax revenue.
New Jersey has enjoyed substantial revenues by route of the taxes that it levies upon its Atlantic City casinos, who are all permitted to host online gambling websites provided a portion of the revenues are paid directly to the State. In the case of Pennsylvania, we are dealing with a state that has in excess of 140% of the population of that of New Jersey, so that is clearly a potential source of potential revenues to a state that badly could use them.
The current potential push to enact some Legislation to legalize and regulate online gambling in the Keystone State is not a new one, by any stretch of the imagination, but all previous measures have died what is known as a ‘Legislative death,’ which means that they did not make it far enough to be voted upon by both houses of the Legislature. Of course, it is necessary for them to do so to make it to Governor Tom Wolf’s desk for either passage into law or veto.
Not only does New Jersey serve as an example of the sort of benefits that a state derives by legalizing and regulating online gambling, but it also serves as an excellent example of how to go about doing so. While, as an advantage player, I would prefer a truly open market available to ALL potential online casinos, the State of New Jersey restricts licenses only to companies that already operate land-based casinos within the state. While that may not seem necessarily fair to companies who do not have a brick-and-mortar presence, it does make sense from the standpoint of certain players who would only feel comfortable playing with such a company. The impression, one would assume, is that Gaming could take action against the live casino as well as the online version if the casino commits any wrongdoing.
The unfortunate side effect of the measure is the fact that those casinos effectively have limited competition, as they are not terribly concerned about overseas casinos, and as a result, some of the bonuses that are offered by those casinos are not as potentially lucrative as their competition overseas. Again, though, that only has a negative impact on players who are not willing to play at an overseas casino, anyway. If a player is willing to play at an online casino with a reasonably good reputation, then that player is essentially open to all casinos whether or not they have a land-based presence in the player’s state.
On the flip side of that, for players willing to play anywhere, it also means that online casinos should have to operate even more honestly and offer even more potentially juicy promotions to compete with the online casinos that are licensed and regulated by a player’s state. The widespread legalization of online casinos within the United States would mean that the conditions would have to be as good or better at the overseas casinos for the casinos to even compete with those in a player’s state. Players who are only willing to play at casinos that have a land-based presence within their state are accomplishing nothing more than potentially limiting themselves.
It Has Been There All Along:
What the State of New Jersey and all of the other states that have legalized and regulated Internet gambling have finally come to realize is this: Several of the players that were interested in gambling online are going to play whether or not there is a state licensed and regulated Internet casino in their jurisdiction. Granted there are some players who are going to play only if it is a patently legal activity and some others who are only going to feel protected enough if it is their state regulating it. For each one of those players, there are at least a few who are willing to play online under the current conditions.
Furthermore, individuals visiting New Jersey have been allowed to play at the New Jersey licensed and regulated Internet casinos provided that they are in New Jersey as of the time of playing there. While perhaps only a few people have traveled to New Jersey specifically for that purpose, certainly people who are visiting New Jersey anyway have taken the opportunity to try out one of that state’s online casinos.
In other words, it’s just like states that offer some form of gambling that border states do not. It’s just like how residents of Nevada, a state synonymous with, “Gambling,” will occasionally drive to other bordering states when the PowerBall is high; (as Nevada has no state lottery). If you offer something that another jurisdiction does not offer, and any denizens of your jurisdiction go to the other jurisdiction to avail themselves of what is being offered, then you are directly losing money to that jurisdiction that you could keep on your own.
Furthermore, if the states so choose, they could allow New Jersey players to play at Pennsylvania’s online casinos and Pennsylvania players to play at the New Jersey online casinos. Provided the revenues that taxed go to the appropriate state based on the location of the player either at the time of play or based upon address.
A stipulation such as that would accomplish a few things:
1.) Access
-The stipulation would give the casinos of both states access to the citizens of the other state. In other words, citizens of Pennsylvania could theoretically play at Golden Nugget online (as Golden Nugget has no presence in Pennsylvania) and, if there were a SugarHouse online, then New Jersey players could play at that casino (as there is no SugarHouse presence in Jersey).
By giving the casinos access to players in both states, the potential level of competition is increased which is going to be a positive for the players as it would likely result in an increased battle for good playing conditions and better bonuses which would benefit all of the players involved. Furthermore, in both cases, players would be playing under the protection of a state licensed and regulated jurisdiction which will make the players feel even more comfortable as compared to playing under a jurisdiction of a different country entirely, or alternatively, an Indian tribe.
2.) Streamlining
-The players would not be the only ones to potentially benefit, nor would it only be beneficial to the casinos that only have a land presence in one state or another. It could be argued that casinos with a physical presence in both states (as is the case with CET-all CET properties, and Resorts Atlantic City-who also own Mohegan Sun Poconos) would be able to offer the same online casino to all potential patrons. Without the need to have two completely different sites, as long as they are able to do so while still properly accounting for the sources of their casino revenues.
-Furthermore, the availability of individuals from states other than those in which a casino has a live presence will expand the potential player pool for poker games, which will enable a casino to offer more tables with a wider array of table limits and games. Poker is a very interesting game in the sense that access to a wider pool of potential players is a positive for the players themselves as well as any casinos involved in the equation.
-The fact of the matter is, in many ways, everyone benefits from streamlining when the casinos are able to operate in multiple jurisdictions. Once again, the cheaper costs associated with only running one website while catering to multiple states might also result in the casino being able to offer better promotions to the players due to the cost savings. I’m not saying that the casinos would necessarily pass that lower cost-per-player along, just that the smart casinos theoretically would.
3.) Uniformity
-By being able to have a presence in multiple states, and with the states allowing that, the states might actually come together and pass some uniform gaming code that is agreed upon by the states in question. The benefit of that, of course, is that the casinos and players would all be playing under the same set of rules, and as such, there would be no ambiguity as to what the casinos are allowed to do. The casinos also would not be in a position in which they would have to adopt different operating procedures based upon the state from which a player is either playing or resides.
Granted, this sort of uniformity would then fall undoubtedly under the realm of, ‘Interstate Commerce,” so for that to fly, such commerce would then come under the regulation (in at least a roundabout way) of the Federal Government pursuant to the Constitution of the United States of America. Essentially, that would require the Federal Government to expressly legalize online gambling, which while it has never actually made the act of gambling online legal, it has not expressly made it a legal action, either.
Even that is theoretical, though, as the Federal Government might choose simply to allow the states to deal with each other and not otherwise get involved unless some sort of issue were to arise between the states and they sought the jurisdiction of a Federal Court. Barring that, however, if the states could deal with one another peacefully, then people could at least hope that the Feds would see any real need to get involved in the whole thing.
The Sands of Time:
Another problem with the passage of online gambling in the State of Pennsylvania is the massive amounts of money that Sheldon Adelson, owner of the parent company of Sands Casino in Pennsylvania, is willing to throw at the prevention of online gambling both in the State of Pennsylvania and elsewhere.
For one reason or another, Adelson has remained staunchly opposed to the legalization and regulation of online gambling despite the fact that his company could theoretically profit from it and the fact that people should have the right to do whatever they like with their money.
Actually, it sort of makes sense for Adelson to oppose it…
You see, when it comes to costs, it doesn’t cost a particular online casino that much more than other online casinos to offer a comparable product. This is evident in the State of New Jersey in which Golden Nugget had the best performing online casino for the month of February 2017, in fact, it beat itself for the all-time best month on record for a single casino, while all of the other online casinos fell behind it in one way or another.
That means that Caesars Interactive, backed by a company that has three physical properties in Atlantic City (two of which had greater revenues at the physical casino than Golden Nugget, and one of which Golden Nugget barely beat) lost to Golden Nugget with respect to online revenues. The Borgata, a much more expensive and expansive property that had over 350% of Golden Nugget’s live gambling revenue for the month was also defeated by Golden Nugget in Internet casino win. Tropicana was also superior to Golden Nugget in live casino win, substantially, but lost to Golden Nugget in the online market.
The fact of the matter is that online gambling is the great equalizer, and an online casino that treats players fairly and offers promotions comparable to others does not cost that much more to run than an online casino offered by a larger physical casino company or property. In other words, the Internet market is the great equalizer.
Sheldon Adelson cannot stand that fact because his focus is to offer some of the biggest and nicest physical casinos in Las Vegas, Pennsylvania, Macau and other jurisdictions alike when he sees an opportunity. He is concerned that he might lose live casino revenues to online casinos and, even worse, that those live casino revenues lost might not be distributed equally (based on the casinos that lose them) to his online casino. In fact, Adelson is so concerned about this fact, in my opinion, that the access to potentially new sources of revenue is not enough to assuage his fear of competing in what is, essentially, a completely equal market.
Because let’s face it, New Jersey did acquire a completely new revenue stream for either completely new (or more frequent) gambling customers due to the online gambling offerings. This is undeniably proven by the fact that New Jersey experienced its first year-over-year gain in 2016 as compared to 2015 and that largely came about as a result of Internet Gambling Win. Internet Gambling Win, by the way, has increased literally every single year since it began in the State of New Jersey, which might even mean (given the statistically meaningful increases that continue to happen) it might have still not hit its full market capacity!
However, it is possible that Sands Bethlehem might be sold to MGM International who are not only players in the online casino game but are also players in the online casino game in the neighboring State of New Jersey. They are potentially going from ownership who is either unable or unwilling to compete in that market to ownership that wants to expand that market and has experience in same. Let us also not forget that, via the MyVegas Facebook app, MGM International also has substantial experience in the realm of social gambling, as well, so they are pretty well-versed on the whole Internet Gaming segment.
When it comes to the lobbyists and money being thrown against Pennsylvania finally legalizing Internet Gambling, much of that money and that lobbying is going to cease to exist if Sheldon Adelson does Sands Bethlehem the favor of selling it to MGM International.
The Current Push
Senator Jay Costa is currently in the process of attempting to enact Legislation that will derive untold revenues for the State of Pennsylvania given hefty licensing fees for both casinos and vendors alike, as well as a 25% tax on all Internet Gambling revenues.
It is important that it be a Senator making such a push because the Pennsylvania House of Representatives have already twice passed bills in which some online gambling measure was present, or alternatively, the primary focus of the bill in question. Unfortunately, despite such passage, both of those bills died a Legislative death, as mentioned before.
While we have to see what the remainder of this year holds, it can only be viewed as a positive for proponents of online gambling. A Senator such as Costa, with the enthusiastic support of a Governor (their jobs are much easier if the state makes money), is making a meaningful effort to do what they arguably should have done years ago.
Conclusion:
Naturally, none of this is an actual guarantee that an online gambling measure is going to make it through both the Pennsylvania Senate and House of Representatives in either this or any other year. However, it is a definite positive to see that at least one Senator is willing to make an effort in this regard.
Another positive for those who would like to see people have the right to do what they want to do with their money is Sheldon Adelson. He is one of the most vocal casino owners (both in interviews and with his company’s money) against online gambling might be getting completely out of the Pennsylvania market and would no longer have, ‘A dog in the race,’ so to speak.
In the meantime, I think that the licensing and regulation of more Internet casinos within the United States will benefit all players because it will give them more options and increase competition. Additionally, I think that online casinos abroad will have to afford players the same quality and protections that they enjoy in their state if they want to be able to continue to compete for those players who would then have licensed and regulated Internet casinos within their jurisdiction. Besides that, I think the casinos located abroad would also have to offer more generous promotions to entice the players who have licensed and regulated options within their own states to play there.
I also cannot emphasize enough how important I think it is for every state of the fifty to license and regulate something that is likely taking place within their borders, anyway, in order to cut themselves out a slice of those revenues by way of taxation. In my opinion, any state that gripes about budgetary concerns that have not yet legalized and regulated every single form of gambling even possible (except those that would not be profitable, of course) has no right to be doing so. The potential to generate revenue for the state via taxation is right there and, for the time being, the vast majority of states are not taking advantage of it.
In terms of games, promotions and other casino offers, land-based casinos might eventually find themselves also having to become more generous to try to get players through their doors who might otherwise prefer online casinos, in general, if the land-based casinos do not keep up. The marketing offers are going to have to eventually become more generous, which is essentially the same as saying, ‘More potentially lucrative for advantage players!’
