Will Pennsylvania’s legalization of online gambling end prohibition efforts on Capitol Hill?

As Pennsylvania begins implementation of a new regulatory framework that will allow the Keystone State’s 12 casinos to launch online casino gaming and 10 other operators to offer online lottery services, pundits are asking whether Pennsylvania’s success will spell the end of Congressional attempts to ban online casino gambling nationwide.

In a state where casino gambling revenues have been flat since 2012, Pennsylvania’s recent legalization of online casino gaming is expected to grow the state’s $3.2 billion per year gambling market by 10% next year alone, generating an estimated $200 million annually in additional tax revenues in what is seen by many as a windfall for the state’s cash strapped coffers.

As a result, on Capitol Hill, the Restoration of America’s Wire Act (RAWA), legislation largely supported by brick and mortar casino billionaire Sheldon Adelson, which seeks to completely ban online gambling in the US, may be coming under threat thanks to Pennsylvania’s legalization success.

“When Gov. Wolf signed the bill this week it was a historic day for Pennsylvania consumers, and a clear rejection of federal efforts to dictate iGaming policy to the states,” Executive Director John Pappas of the Poker Players Alliance (PPA), a poker lobbying group, said. “Going into this week, anti-iGaming forces were already crippled; no federal bills to speak of, fewer Congressional champions and a DoJ with more important things to do than trample states’ rights. Now, I would have to think the ‘RAWA’ effort is mortally wounded.”

Pennsylvania’s success was made possible in large part by the Obama Administration back in 2011, when it encouraged the Department of Justice (DoJ) to reinterpret the decades-old Wire Act to give states room to enact their own internet gaming laws. Momentum for legalized online casino gambling across the US was further boosted by a move to push the largest offshore sites out of US cyberspace earlier that year.

These changes appear to have enraged brick and mortar casino mogul and ardent Trump supporter Adelson, who vowed to fight nationwide legalization “at any cost”. Worth an estimated $35 billion, Adelson, a die-hard supporter of RAWA, hopes to reverse the DoJ decision and bring back the Wire Act to prohibit the further expansion of online gambling and block states that have already moved to legalize.

If successful in his vehement efforts, the impact would be immediate and violent, making online gambling illegal with no exception for the states who have already legalized such as New Jersey, Delaware and Nevada, deeply impacting local economies in those states.

Despite the online gaming industry’s victory in Pennsylvania, the PPA’s Pappas said there is “no time to relax,” as the poker community should “use it to illustrate the power of states to determine their own path for iGaming.”

New Hampshire online gambling bill hits roadblock

As Pennsylvania scooped up headlines last week for signing a bill into law that legalizes online gambling, similar efforts in neighboring New Hampshire came to a halt as the state legislature voted unanimously to find the bill “inexpedient to legislate”, putting an end to hopes of the bill coming to a full vote this legislative season.

The bill’s chances of seeing a vote in 2018 will likely depend on how well the state’s recently authorized online lottery performs. The state authorized online lottery sales last July, with the game set to go live online statewide in 2018.

The success of the online lottery in the state of 1.3 million is inextricably linked to the possible future of online gambling. With New Hampshire having marginally legalized casino gambling in the form of charity poker rooms that occasionally offer bingo and table games, the outstanding question remains, if the bill were to pass, who would run New Hampshire’s online casinos?

The current bill is largely seen as a place holder, being short on specifics and leaving the question open as to who, specifically, would be licensed to operate online casinos in the state. The thinking is that, were the online lottery to succeed, control over the tiny state’s online casinos would be handed to the state’s online lottery operators. With a population of just 1.3 million, and the state’s existing casinos too small to create and fund online gambling operations, attracting established online casino operators is an attractive option but a long shot due to small market size.

Online gaming fans will now have to wait at least until next year to discover the fate of state licensed online casinos in New Hampshire.

Macau casino stocks rise after the 19th Party Congress in China

Banking giant Nomura has reported a noticeable uptick in casino stocks after Macau gambling market posted better than expected results for the last 10 days of October. With Macau’s VIP revenues up thanks in part to what many viewed as an easing of China’s previously heavy-handed attempts to prevent Chinese whales from flocking to Macau as part of Chinese President Xi Jinping’s clampdown on corruption, the regions casino stocks have fared well.

“Our latest consultant checks point to a noticeable pickup in demand following the 19th Party Congress in China, with VIP and mass revenue up about 30 percent and 9 percent year-over-year, respectively,” Nomura analyst Harry Curtis said in a research note last week.

With Macau being the world’s largest gambling mecca and VIPs a major contributor to the bottom line, indications that the Chinese Communist Party was no longer looking to make an example of Chinese whales, and the junket business that brings them to Macau to spend lavishly, as part of its clamp down on corruption, appear to have opened the floodgates on what was previously a lagging business.

In light of the strong showing over the last 10 days of October, Nomura said it has risen its gross gaming revenue estimate for Macau to 19-20% year-on-year, a notable improvement over previous Consensus Metrix survey forecasts of 15.9%.

 

 

Nicola Davidson, a staff writer at Planet 7, is a semi-professional rock climber and lover of poetry and games of skill. When she's not scaling mountains or at an open mic night, Nicola enjoys writing about games like Blackjack and Three Card Poker and putting gaming strategies to the test.