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Pennsylvania Preserves Regulations Banning Online Gaming Wagers on Casino Property

Legal online gambling in Pennsylvania is expected to launch by year’s end, but as regulators put the final touches on policies governing the industry, one restriction in particular is attracting attention.

According to a two-page FAQ page published by the Pennsylvania Gaming Control Board (PGCB), players located within any of the state’s 13 licensed casinos will be prohibited from placing online casino and slot wagers:

“The Gaming Control Board will put in place a system that, through the use of GPS software and IP Address identification, will block entry and play of Pennsylvania-licensed internet gaming if a user is outside of the state.

In addition, participating in internet gaming when in a Pennsylvania casino will also be blocked.”

The ban on internet wagering while inside a casino was included in the gambling expansion legislation signed into law late last year. Applicable to table games, slots, poker, and other casino offerings – but curiously, not sports betting – the property-wide prohibition is causing controversy in the Keystone State ahead of the long-anticipated launch of legal iGaming.

Lawmakers and Stakeholders Stay Quiet on Reasons for Ban

To implement the ban on in-house online gaming, the PGCB has contracted with GeoComply, an industry leading geolocation tracking services provider.

GeoComply is also licensed by the Nevada Gaming Control Board (NGCB), the New Jersey Division of Gaming Enforcement (NJDGE), and the Commonwealth of Delaware to determine where players physically access online gaming sites operating in those states.

In a recent article addressing the rule’s wider implications – published last week by the Philadelphia Inquirer – gaming and tourism reporter Andrew Maykuth explored possible reasons for banning dual wagering within casinos:

“Some insiders say the casino exclusion was not an oversight, but a small concession to the horse-racing industry, which receives about 10 percent of the revenue from casino slot machines – a $239 million share last year.

Under the new law, the Pennsylvania Race Horse Development Trust Fund will still get its piece of the slots action, but it will receive nothing from interactive gaming, including online slots.”

One of those “insiders” was revealed to be Lindsay Slader, the vice president of regulatory affairs for GeoComply. Per Slader’s account, the PCGB is indeed looking to protect the state’s horseracing industry from potential reductions in revenue derived from brick and mortar slot machine play:

“You won’t want anyone placing a bet on online slots while on the casino floor, and horsemen wouldn’t be getting that cut that they have been promised.”

For their part, the Pennsylvania Harness Horsemen’s Association (PHHA) previously acknowledged that so-called “cannibalization” of slot revenue would occur with or without the onsite ban. Along with iGaming, Pennsylvania’s 2017 law allowed for video gaming terminals (VGTs) to be placed at truck stops and other non-casino locations – providing another alternative to casino-based slots.

Casino Operators Prepping for iGaming Confused About Rule

Ten of the state’s 13 casinos have applied for iGaming licenses, and thus far, the PGCB has approved seven venues.

Harrah’s Philadelphia, Parx Casino, and Mount Airy Casino Resort were approved in early August followed by SugarHouse Casino and Hollywood Casino in September, and Sands Bethlehem and Valley Forge last week.

Tony Ricci – who serves as chief executive officer for Parx Casino parent company Greenwood Gaming & Entertainment – told the Philadelphia Inquirer that a ban over onsite online wagers was originally floated to counter a lower tax rate proposed for online slots.

But per Ricci, the ban remained in place even after lawmakers equalized Pennsylvania’s slot machine tax rate at 54 percent for both online and brick and mortar play:

“It probably slipped through in the final version.

Frankly, it is quirky now when you look at it, what the point of it is.

It complicates things in many ways.”

Casinos in Nevada and New Jersey, both of which legalized iGaming in 2013, regularly use the prospect of playing online while visiting the property as an effective marketing tool.