Pennsylvania is the up-and-comer in the gambling market, operating casinos, a lottery, and offering both onsite and OTB wagering on horse races. And, as of October 2017, online gambling is legal in Pennsylvania.
Legal gaming began in Pennsylvania in 2004, allowing slot parlors to operate virtual lottery terminals (VLTs), which are centralized slots. Six years later the state expanded licensing to include poker. Currently, there are 12 casinos throughout the state offering over 25,000 slots and 300 poker tables. A 13th is underway in Philadelphia. The new casino will be in the heart of the Stadium District.
Horse racing takes place at only two tracks, but wagering is available onsite and at off-track betting (OTB) venues.
In October 2017, Pennsylvania became the fourth state in the US to allow online gambling. Gov. Tom Wolf signed into law an expansive gaming package that will authorize online slots, online poker, online table games, daily fantasy sports, sports betting, VGTs, and more.
The market for legal online gambling is expected to go live in the second half of 2018. The first new market will be the online lottery, which began its launch in May.
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Legal online gambling options in PA
The Pennsylvania Senate passed H 271, the state’s gaming expansion package, on Oct. 25, 2017. The next day, the PA House passed H 271 as well.
On Oct. 30, 2017, Pennsylvania officially became US state #4 to legalize online gambling when Gov. Wolf signed the bill into law.
We expect that sites will be up and running in the second part of 2018. It will take some months for regulations to be established, licenses to be applied for and granted, and for sites to do the requisite pre-launch testing.
Here is a look at what the bill authorizes and what we know so far:
Online casinos and online poker
The new law allows for 13 licenses in each of the three categories:
- Table games
- Peer-to-peer games like online poker
Current casino license holders get the first crack at these licenses. They can purchase all three for $10 million total or buy a la carte for $4 million each. Should all casinos in the state not opt to use all the licenses, they will be available to approved gambling entities outside of the state after 120 days.
Another element to consider down the road is player pooling. The law is written such that Pennsylvania can easily opt-in to player-sharing agreements. For example, it can join the compact between Nevada, Delaware, and New Jersey to pool online poker players.
In addition to expanding online, Pennsylvania casinos can also open a smaller, mini-casino. The law commissioned 13 new licenses for smaller satellite properties with up to 750 slots and up to 30 table games. The base license costs $7.5 million, with the table games license costing an additional $2.5 million.
These properties have several restrictions on location, including being a certain distance from existing casinos as well as from other satellite properties. Moreover, each municipality had the opportunity to opt out of hosting such a facility. Over 1,000 townships did just that, so locations are further restricted on that front.
The Pennsylvania Gaming Control Board ran a series of auctions for properties to claim these mini-casino licenses. The first round was only open to Category 1 and 2 casino facilities. Once there were no more bidders, a secondary auction began, generating one more license. So far, only five of the ten available licenses have been purchased.
You can keep track of the specifics of each mini-casino auction on our sister site, PlayPennsylvania.
The online lottery is a state-run gambling expansion. The Pennsylvania Lottery already offers lottery tickets for popular drawings like Powerball and Mega Millions at hundreds of retailers across the state.
The online expansion will offer much of the same. Online draw-game tickets, scratch-off games, and Keno, for example. Like online casinos, participants do not have to be Pennsylvania residents to play. However, they must be physically within the state’s borders. Players must also be at least 18 years old.
The PA Lottery will also offer the sports-betting variant virtual sports on its land-based video lottery terminals (VLTs). These machines simulate a fake race with animation, allowing players to bet in advance on the results.
The Lottery Commission does not plan to offer virtual sports online at launch, but it is possible the concept may go online in the future.
Sports betting and DFS
Additionally, Pennsylvania players will have access to regulated daily fantasy sports. Moreover, after the Supreme Court ruled against the federal ban on sports betting in the New Jersey sports betting case, Pennsylvania can now start offering legal wagering at the casinos and racetracks in the Keystone State.
In order to offer bets, casinos need to purchase a $10 million license. With that, the properties can offer both in-person and mobile wagering. The taxation on wagers amounts to:
- 34% on gross gaming revenue
- .25% on handle for a federal excise tax
- 2% for local revenue share
Land-based slots environment
Pennsylvania is the success story of land-based gambling in the last 10 years.
Until 2004, gambling in the Northeast was centered in Atlantic City. Delaware offered a few options, but Pennsylvanians (particularly those in Philadelphia) had to drive into “America’s Playground” to scratch their gambling itch.
However, in 2004, Pennsylvania’s legislature passed Act 71. As a result, the Pennsylvania Gaming Control Board was created and they authorized the introduction of Class II gaming machines. These are slot-like machines fed by a master server. Consequently this is more like buying rapid-fire lottery tickets than true slot machines.
Licenses were granted to 14 slot parlors (although not all of them opened), and for six years, this was the state of gambling in Pennsylvania.
Then, in 2010, Pennsylvania expanded the licensing to include poker and blackjack. Since that time, Pennsylvania gaming revenue has exceeded $3 billion dollars each year, and 2016 was the biggest year yet. Twelve casinos are operating healthily in the state, and there are discussions about expanding further.
What’s more, Pennsylvania has become the state with the second-highest revenue from gambling. The success of Pennsylvania has been so profound that Atlantic City, once the only game in town, has seen year after year of reduction in its revenue. Not coincidentally, Atlantic City’s best year ever was 2005, just before the first slot parlors opened in the Granite State.
So, gambling is alive, well, and a big deal in Pennsylvania!
With regard to slot machines, Pennsylvania now offers over 25,000 machines for residents to play. Below are the 12 casinos and their maximum allowable amount of slot machines, which provides an idea of the size of each casino’s offerings.
Land-based slots options
|Property||Location||Maximum Number of Approved Slot Machines|
|The Meadows Racetrack and Casino||Washington||3,168|
|Sands Casino Resort Bethlehem||Bethlehem||3,013|
|Harrah’s Philadelphia Casino and Racetrack||Chester||2,800|
|Hollywood Casino at Penn National||Grantville||2,384|
|Mohegan Sun Pocono||Wilkes-Barre||2,332|
|Mount Airy Casino Resort||Mt. Pocono||1,868|
|Presque Isle Downs & Casino||Erie||1,588|
|Valley Forge Casino Resort||King of Prussia||600|
|Lady Luck Casino Nemacolin||Farmington||597|
Parx Casino & Racing
Parx Casino is the biggest and most successful of the dozen Pennsylvania casinos.
It began life as the Keystone Racetrack in 1974. It has since transitioned from a pure racetrack, to simulcast house, to a slot parlor known as PhillyPark, and finally settling as Parx in 2008.
Its proprietors are Bob Green and Bill Hogwood, both of whom hail from the UK. The two men have managed to provide a world-class casino venue.
Over 3,000 slots, 130 tables that offer blackjack, baccarat, roulette, craps, three-card poker, and four-card poker, and 80 poker tables wait for customers from the surrounding area – primarily from Philadelphia. Patrons also have eight restaurant or bar options, a dance club, and a sports bar to entertain themselves.
There are two parts of Parx’s offerings that warrant special attention. The first is its poker room, which is the largest in the state and collects the highest revenue in rake of any of the casinos.
If you surveyed poker players and asked them to name a Pennsylvania poker location, most would say Parx. The room hosts two tournament series, including a bona fide World Poker Tour stop in August (the WPT Parx Open Poker Classic) and a WPT-streamed monthlong series in February (Big Stax). Until 2015, its room ambassador was well-known poker pro Matt Glantz. So, there is no doubt that Parx is a worthy destination for many poker aficionados.
Another high-profile facet of Parx is its horseracing track.
A one-mile oval opened in 1974, the Parx Racetrack is the home of the Pennsylvania Derby. This is a Grade I race recently run by both Nyquist, the 2016 Kentucky Derby winner, and Exaggerator, the winner of the 2016 Preakness States.
In 2010, the race moved from its traditional scheduling on Labor Day to later in September. Therefore they can attract a stronger field of competitors looking to prepare for the Breeder’s Cup. The most recent purse for the race was $1.25 million dollars.
State legal environment
|Permitted/Offered?||Notes & Restrictions|
|Land-Based Gambling||Yes||At present, 12 licensed casinos operate in the state.|
|Online Gambling||Yes||Legislation passed in October 2017|
|Lottery||Yes||Options include Pennsylvania State Lottery and multi-state Powerball and Mega Millions drawings.|
|Charitable or House-Based Gambling||Yes|
|Minimum Gambling Age||18 for pari-mutuel, horseracing, and DFS; 21 for casinos and online gambling|