Recently, the Pennsylvanian Gaming Control Board released a documentation pertaining to online gambling in the state. The FAQ document is meant to help the state’s citizens to gain a better understanding of its forthcoming online gambling industry. However, the two-page document contains no new, or rather groundbreaking, information. Still, there is a specific aspect of the law that has often been underreported or underplayed, that is, the prohibition of online poker and online casino gaming at any of Pennsylvania’s dozen land-based casinos.
Apparently, the ban is purely based on protectionism and came into effect thanks to a false narrative that was pushed during the state’s gaming debate. Furthermore, the strange prohibition was accompanied by an exorbitant tax rate on online slots, and this makes a having a clear understanding of the document even more important for both the gamblers and the aspiring online casino operators.
The prohibition, as the document explains, materialized as a result of the fear that online gambling could have an advantage over brick-and-mortar casinos and thus drive customers away from the 12 land-based casinos that are currently operating in the state. Despite Pennsylvania’s efforts to acquiesce and match the online casino tax rates with the rates on the land-based ones, the protectionism agenda just never went away.
“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,” said Parx Casino CEO, Anthony Ricci during a hearing on March 2017 – these concerns were echoed by Senators Lisa Boscola and Robert Tomilson.
An Overreaction to a Non-existing Problem?
Well, of course, it is. Just like what they have done by imposing high tax rates on online slots, the prohibition of online gaming in the land-based casinos does not protect them from cannibalization. This is not only because the supposed threat does not exist yet but also because there is little to no statistical proof of the same.
In fact, this flawed way of thinking will certainly result in some negative real-world impacts on the state’s yet to be launched online gambling industry. Eventually, these negative impacts are bound to spill over to the land-based casino and this spells doom for the gambling industry as a whole.
A closer look at the matter even reveals that casinos do not fear marketing online games to their land-based customers because such a move would have them forego the table games and slot machines in favour of online games. Instead, they even go as far as registering players to their online gaming platforms so that when they get back to the comfort of their homes after gambling at the brick-and-mortar casinos, they can continue enjoying their favourite casino games. Now, that is food for thought.