Legally, Pennsylvania is in position to begin online gaming and sports betting.
But financially, there’s a long way to go.
The head of the Pennsylvania Gaming Control Board and three possible players in the Internet gaming field gathered Thursday afternoon at GiGse at The Biltmore Hotel in Coral Gables, Florida.
Kevin O’Toole, executive director of the Control Board, spelled out the terms the state Legislature requires for online gambling to begin, the most notable of which being a $10 million registration fee.
The three operators appeared, at best, lukewarm; Aviram Alroy, vice president of interactive games for Mohegan Sun; John Worthington, director of products for Penn National Gaming, and Thomas Winter, vice president of Online Gaming for Golden Nugget.
Pennsylvania’s brick-and-mortar casino business has been an unqualified success, and that industry will still be the heart of the gambling landscape, O’Toole said. Now iGaming and sports betting have been approved.
“Pennsylvania has proved in recent years that we have people who like to gamble,” O’Toole said. “In both of those activities, the Legislature was very clear that they wanted to make this a supplement to our successful land-based casinos. Much of the new gaming act gives a great significance to those land-based casinos.”
Alroy questioned if the matter was even workable.
“The discussion we’re having internally is how can we make this work? The way we see it is we’ll have to partner up,” he said.
Worthington added that his company, a regional gaming giant, didn’t see Internet gaming “as a huge moneymaker for us with sports betting.”
Winter predicted that if Golden Nugget entered the market, it would lose $10 million to $15 million in the first five years.
“At year five, we might break even,” he said.
Pennsylvania lawmakers last fall approved a sweeping bill that included slot machines in truck stops as part of an attempt plug a leaking budget. The first proposed bill was from 2013.
“We’re a little bit ahead of the curve in terms of other jurisdictions,” O’Toole said.
He noted that it was acceptable to generate revenue “if there’s a need for it on a short-term basis to cover budgets.” But the $10 million fee for Internet gaming or sports wagering was applied by the Legislature.
O’Toole added that online games with video of live action can fare well.
“Seeing the roulette ball spinning gives you a great confidence that it’s the same as being in a land-based casino,” he said. “I really think table games could do well.”
O’Toole noted that municipalities have some buy-in because they receive 2 percent of revenues, with 14 percent more going to the state.
Alroy said online gaming will help bring a younger demographic to gambling, and the availability could bring some cross-pollination with land-based casinos.
Winter noted that Pennsylvania will be a new jurisdiction for Golden Nugget, so there is no existing data on how many people could play both. The company operates the Golden Nugget Atlantic City, which has an online component and noted that social gambling sites have brought an increase to land-based casinos.
O’Toole also emphasized that Pennsylvania was a significant increase in potential online gambling. His state has 12.8 million people. The three states currently with online gambling total 12.9 million.
