Penn National Responds To Regulator’s Online Gambling Consultation
Land casino operators rail against DFS and high taxation
Daily fantasy sports and high taxation were among criticisms levelled by Penn National Gaming in its response to a consultation on online gambling launched by the Pennsylvania Gaming Control Board following the recent passage of state legislation legalising online gambling in the state (see previous InfoPowa reports).
Among the points raised by the land and online gambling operator – probably the state’s biggest – were the following:
* The $10 million licence fee and 36 percent tax rate approved by state lawmakers are the highest in the world, and may make it impossible for a casino operator to make any return on its investment of capital.
The operator claims it could lose around 40 cents on every $100 wagered on sporting events, and believes legislators should consider the more sensible arrangements passed in New Jersey and West Virginia, which allow state-licensed operators to better compete with neighbouring jurisdictions and the unregulated market.
- The regulator should give preliminary approval to platforms that have already been extensively tested and approved for sports betting in Nevada, along with employees and vendors.
- Penn National would also like to see the removal of a legislative provision requiring servers to be located in Pennsylvania.
- The gambling group seeks relief from another provision requiring in-person registration for punters.
- Penn National is opposed to branding and partnership (skins) arrangements for mobile and online operators, noting that these would allow new white label activity by third parties using brands it alleges (incorrectly) are not currently in use in the state such as DraftKings and FanDuel (both of which are already regulated as DFS operators by the PGCB).
Penn National appears to believe that a failure to ban skins would present “significant” new competition to existing Pennsylvanian licence holders and cause market saturation!
Pennsylvania D.F.S. Market Off To A Strong Start
State makes $200,000 in tax revenue in first month of licensed activity
Daily fantasy sports US market leaders FanDuel and DraftKings accounted for 98 percent of sector activity in the first month of licensed operations in Pennsylvania, generating adjusted revenue after distributing winnings of $673,013 and $632,008 respectively
The strong start saw overall DFS revenues of $12.4 million generated by the five leading companies, with DRAFT trailing the two market leaders, along with Yahoo Fantasy Sports and Fantasy Draft.
Thus far ten DFS operators have paid the $50,000 licensing fee required by the Pennsylvania Gaming Control Board and agreed to the 15 percent of GGR tax rate.
The state harvested $200,000 in tax revenues.
Pennsylvania Regulator Limits Skins In Latest Sports Betting Regs
PGCB rules only one online sportsbook per casino…no skins
The Pennsylvania Gaming Control Board appears to have taken a different course to its online gambling regulations in its latest set of regulations, issued Wednesday to control land and online sports betting, specifically concerning the controversial issue of skins.
InfoPowa readers may recall that two months back the regulator ruled regarding online gambling:
“There is no limitation to the number of skins that a slot machine licensee may employ to deliver games, but every ‘skin’ that a casino offers must be branded in a manner that makes it clear that it is offered on behalf of the slot machine licensee consistent with language of the act.”
Contrast that with the latest sports betting regulation, which says that one of the provisions through which a sports betting certificate holder, or a sports wagering operator licensee on behalf of a certificate holder, can accept wagers is:
“Through a single interactive website or mobile application that clearly and prominently displays the name of the sports wagering certificate holder.”
That would appear to impose an ‘only one online sportsbook per casino…no skins’ limitation.
The 59-page regulatory guide issued by the Board Wednesday after a closed door executive session details which properties can accept sports bets, and how they will be able to offer sports betting.
State land casino licensee, Penn National will be pleased with the regulations; the company has opposed the concept of multiple skins per operator on grounds that it would “present significant new competition to the incumbent casino operators and result in overall saturation of the marketplace, as is occurring in the online gaming marketplace in New Jersey.”
See the latest set of regulations here:
https://gamingcontrolboard.pa.gov/files/regulations/Temporary_Rulemakings_125-217_Sports_Wagering.pdf
Pennsylvania Operators Want State I-Lottery Activity Shuttered
13 land casino licensees threaten legal action unless state lottery collaborates with them on i-lottery program
Pennsylvania’s land casino operators may have so far shunned the state government’s invitation to apply for online gambling licences at $10 million a pop (see previous InfoPowa reports) but they have been active in opposing the state lottery’s venture into online games.
In a letter to state Revenue Secretary C. Daniel Hassell Wednesday the operators requested that the state government suspend the new online lottery games, claiming they are a direct and illegal incursion into the nascent Pennsylvania online gambling market which they have yet to exploit themselves.
The operators have threatened to resort to legal action unless the state Department of Revenue (which has oversight on the Lottery) works collaboratively with them to develop “a lawful iLottery program” by July 3.
The publication Pennlive, which has seen a copy of the letter, reports that there is a conflict in that recent legislation has opened the state door to online games offered through licensed land casinos and contains language barring the Lottery from offering “games which simulate casino-style lottery games, specifically including roulette, poker, slot machines or black jack.”
The state government has not thus far responded.