Legal

Launch Of Pennsylvania Online Gambling Would Be Like Adding The Revenue Of A New Casino


Pennsylvania is trying to come up with ways to keep its gaming industry healthy and competitive, and although it’s been discussed and will eventually happen, some in the state are loath to add a thirteenth casino for fear of cannibalization.  As Atlantic City learned, more can sometimes lead to less.

But what if there were another way to add the same amount of gaming revenue a brick-and-mortar casino would bring in, but instead of cannibalizing the state’s existing  properties, it would bolster them?

Well, there is, and it’s called online gambling.

The dollars and cents of it

Estimates for Pennsylvania’s Year 1 online gambling revenue are in the $160 million to $250 million range. When the market is mature, those estimates jump to $210 million to $350 million.

This is certainly not chump change. But when we compare these numbers to the $3 billion the Pennsylvania casino industry rakes in every year, or the $80-something billion state budget, $200 million seems like a drop in the bucket. But it’s not, it’s actually about 10 percent of Pennsylvania’s current gaming revenue. It’s a huge amount of revenue, particularly when you consider the low risk/high reward of online gambling.

For a comparison, here are the revenue tallies of the state’s 12 casino in 2013:

  • Parx: $486,726,070
  • Sands Bethlehem: $456,281,459
  • The Rivers: $352,613,869
  • Harrah’s: $329,899,652
  • The Meadows: $276,789,079
  • Penn National: $276,010,070
  • SugarHouse: $269,602,151
  • Mohegan Sun: $267,249,651
  • Mount Airy: $185,819,475
  • Presque Isle: $153,419,274
  • Valley Forge: $87,528,210
  • Nemacolin: $55,633 (opened in late 2013)

In Year 1, online gaming revenue would generate more revenue than at least three, and probably four, of Pennsylvania’s current casinos. A few years down the road the state’s online gambling industry would only lag behind Parx and Sands Bethlehem, and perhaps Rivers Casino, in terms of yearly revenue.

And that $150 million to $350 million generated by online gambling would be divvied up between any brick-and-mortar casinos that choose to get involved in iGaming.

So what’s the holdup?

One of the biggest hurdles online gaming expansion faces in every locale is a lack of interest from the general public, which leads to indifference among lawmakers. This happens for a couple of reasons.

First, the opposition has boiled its arguments down to easy to understand talking points that resonate with the masses:

  • Won’t somebody think of the children;
  • It will hurt the brick-and-mortar casinos;
  • There’s no money in it;
  • Online gambling is a gateway drug;
  • Did I mention the children?

Combating these arguments isn’t quite as easy. It’s not that the rhetoric coming from the anti-online gambling crowd is true, or strong. It’s just much easier to stand at the exit and yell fire in a crowded theater than it is to get the attention of the rampaging mass of bodies and set their minds at ease after the fact.

The second issue is that when politicians start talking money, it often causes eyes to glaze over. The hundreds of millions and billions of dollars they so casually refer to makes these figures seem insignificant. This is why I often feel it’s a good idea to take a step back and look at these numbers in real-world terms.

The question I have is this: If Pennsylvania were given the opportunity to add a casino that would generate somewhere between $150 million and $350 million per year, would it? Keep in mind this casino wouldn’t hurt existing casinos’ business and would have no real-world footprint in the state.

This is precisely what online gambling would do. It’s a way for Pennsylvania to add a thriving casino (something it really doesn’t want to do out of fear of creating the same problems Atlantic City did with its casino industry) without actually adding a casino.

By passing on online gambling, the state would effectively be preventing the addition of another Penn National or Rivers Casino to its gaming revenue. And the only reasons for doing so? Being overly cautious and a fear of change.

Photo by Images Money used under license CC BY 2.0


Steve covers nearly every angle of online poker in his job as a full-time freelance poker writer. His primary focus is the developing legal and legislative picture for regulated US online poker and gambling.