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PCGC lawsuit
Gambling News
Jonathan ZaunJune 16, 2019
June 16, 2019

Pennsylvania Casinos Ask Judge to Stop Online Lottery Games

One year ago a coalition of seven Pennsylvania casinos sued the state’s lottery program over the latter’s online gambling offerings. Now he PCGC lawsuit appears to be nearing its conclusion.

PCGC Lawsuit

In August of last year, the Pennsylvania Casino Gaming Coalition (PCGC) – which represents seven of 13 licensed brick and mortar casinos in the Keystone State – named the Pennsylvania Department of Revenue (PDR) and agency head Secretary C. Daniel Hassell as defendants in a suit filed with the Commonwealth Court.

The PDR is in charge of overseeing the Pennsylvania Lottery, which expanded to include online games and ticket sales in June of 2018.

As for the PCGC, the casino industry lobby group represents the following Pennsylvania land-based casino operators:

Parx Casino
Hollywood Casino at Penn National Race Course
Harrah’s Philadelphia Casino & Racetrack
The Meadows Casino Racetrack Hotel
Stadium Casino
Valley Forge Casino Resort
Mohegan Sun Pocono

Why Casinos Object to Certain iLotto Games

Per the PCGC lawsuit, the Lottery’s launch of so-called “iLotto” products are currently violating Act 42, Pennsylvania’s gambling expansion law authorized in 2017.

Act 42 – which legalized online casino games, poker, lottery sales, and sports betting – includes the following caveat limiting the scope of iLotto services:

“The term does not include games that represent physical, Internet-based or monitor-based interactive lottery games which simulate casino-style lottery games, specifically including poker, roulette, slot machines and blackjack.”

But as a press release issued by the PCGC when the lawsuit was filed makes clear, the group has identified several iLotto products – including Big Foot, Monster Wins, Robin Hood, Super Gems, and Volcano Eruption Reveal – which casinos contend unlawfully replicate slots, roulette, poker, or blackjack.

All told, the PCGC objects to at least nine of the 39 iLotto games released last year. Earlier this month, the lobby group’s lawyers filed for an injunction to stop the Lottery from offering any contested casino-style games by July 15 of this year.

Not coincidentally, that deadline aligns with the launch date for Pennsylvania casinos to go live with their own bona fide online slot, table game, and poker products.

Speaking with PennLive.com, PCGC spokesman David La Torre described the potential iLotto violations. Per the PCGC, nine iLotto games are marketed using identical titles found on land-based slot machines, average iLotto payback percentages of 85 percent align perfectly with traditional slots, and only certain casino-style games can be played for $0.05 and $0.10 stakes – the same as “penny slots” found on the casino floor.

The PCGC lawsuit also sites directives from the PDR advising iLotto suppliers to avoid selling specific games to local casinos, which would then compete directly with the lottery.

As he told PennLive.com, the casinos La Torre represents aren’t opposed to online lotteries per se, but they can’t abide the Lottery entering the casino gaming industry without proper approval:

“Pennsylvania casinos are not opposed to iLottery – only simulated, casino-style games. In fact, casinos are supportive of the lottery’s mission and provide space for lottery ticket vending machines on their casino floors. Some have become the best-selling outlets of lottery tickets in Pennsylvania.”

Lottery Officials Respond to Defend Online Games

For its part, the Lottery offered comment to PlayPennsylvania.com to reject the PCGC’s claims:

“Act 42 of 2017 authorized the launch of PA iLottery and the games are being operated in accordance with the law. We are working every day to ensure the Pennsylvania Lottery continues to fulfill its mission of responsibly generating profits for senior programs.”

Since launching last year, the iLotto vertical is expected to contribute $30 million to Pennsylvania government coffers, good for 3 percent of overall lotto revenue.

After languishing in court for 10 months, the case has been accelerated via the injunction request, as a judge will have to decide whether Act 42 compels the cessation or continuation of contested iLotto games.

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