The February 27th, the Pennsylvania Gaming Control Board released an online gambling FAQ document that is designed to help the state’s citizens better understand the online gaming industry that is yet to kick off. At a glance, there is nothing new or hugely significant in the Gaming Board’s two-page document. However, there is one specific aspect of the law that seems to have been overlooked and underreported and that is the law that prohibits any of the 12 brick and mortar casinos in the state from hosting online casinos and online poker.
What Is the Essence of the Law?
Apparently, the ban is based on a protectionist mindset. During the gaming debate in Pennsylvania, there was a false narrative that manifested in form of the strange prohibition as well as an exorbitant tax rate that has been imposed on online slots. The narrative propagated implied that in case online gambling has any advantage whatsoever over the land-based casinos then the casinos would take the opportunity to drive all their efforts towards attracting their customers towards their online offerings.
One of the people of this opinion is Anthony Ricci, the Parx Casino CEO. During a hearing on March 2017, Ricci pointed out that:
“I find it impossible to assume that a brick-and-mortar casino paying 59 percent in taxes will not lose significant business to an online operator paying 15 percent in an open, unprotected market.”
This claim has been backed and seconded by Senators Lisa Boscola and Robert Tomlinson.
Is It Justified?
In this case, unfortunately, similar to the case of the high online slot tax rate, the prohibition of online gambling in brick-and-mortar casinos does not really protect them from cannibalization – the move was basically an overreaction directed at a problem that does not even exist in the first place. Naturally, this flawed thinking’s negative real-world effect will certainly spill over to Pennsylvania’s forthcoming online gambling industry, and the brick-and-mortar casinos as well.