Keystone Cornerstones: These Partnerships Are Likely To Solidify If PA Regulates Online Gambling

Steve Ruddock May 2, 2016
Keystone Cornerstones: These Partnerships Are Likely To Solidify If PA Regulates Online Gambling

The clamor over the possibility of online gambling expansion in Pennsylvania has died down since it hit a fevered pitch in late 2015, but that doesn’t mean the issue has been shelved in the Keystone State. Online gaming is still on the table in Pennsylvania, and the prospective operators have begun to plan for the future.

With online gaming legalization looking inevitable, several land-based casinos in Pennsylvania have started online gaming divisions and at least two casinos (that we know of) have gone as far as cementing partnerships with online gaming platform providers.

We can also start to make some educated guesses about the role several other casinos will play in the market.

GAN lands market leader Parx Casino

The state’s top brick and mortar casino, Parx, has an agreement in place with GAN (formerly known as GameAccount Network).

In a press release from March of 2015 aimed at dispelling circulating rumors, GAN described its partnership with Parx thusly:

“Throughout the multi-year term of the agreement, Parx Casino will rely exclusively on GameAccount Network’s Internet gaming system, deployed on-property in Pennsylvania, for all forms of real money Internet gaming (including poker, for the avoidance of doubt) in the event the State of Pennsylvania enacts legislation to regulate real money Internet gaming.”

This is a terrific get for GAN, as Parx is the top revenue generator in the Pennsylvania casino market. It will likely carry its land-based success into the online arena, providing top-tier brand recognition and a sizable marketing budget to promote its online platform.

Unless it looks elsewhere for online poker, it’s also a signal that Parx will likely focus its online gaming efforts on the casino side of things.

Mount Airy Chooses 888

Mount Airy also has an official partnership in place.

The partnership was announced at a 2015 hearing in Pennsylvania, where All American Poker Network (AAPN) Executive Chairman David Licht announced 888 (and the AAPN) had teamed up with Mount Airy, with the qualifiers of when – and if – Pennsylvania passes an online gaming bill.

This partnership gives Mount Airy a lot of options, as 888 has solid online poker and online casino platforms. It also has multiple partnerships in several other states with legal online gaming.

You can find more information about the alliance of 888 and Mount Airy here.

Harrah’s Philadelphia yet to make it official

Considering Caesars’ current relationship with 888 in Nevada and New Jersey, the Caesars-owned Harrah’s Philadelphia Casino is also expected to partner with 888, but at this time the collaboration could best be described as unofficially official.

With a deal already in place between 888 and Mount Airy, possibly allowing the two 888-aligned casinos to form an intrastate network and boost liquidity, it would be quite surprising if Harrah’s Philadelphia turned elsewhere. The resulting liquidity could also allow 888 to partner with other casinos in the market.

If Pennsylvania is actively working on forming interstate agreements, it would be even more surprising if Harrah’s decided to forego 888.

Reasons being:

  • 888 is active in every legal U.S. online poker market.
  • They’ve created the All American Poker Network to facilitate inter- and intrastate networks.
  • 888 currently pools its players in Nevada and Delaware.

Mohegan Sun is positioned for success

Mohegan Sun is already involved in online gaming in New Jersey, as it manages Resorts Casino in Atlantic City, which is partnered with NYX / Sportech for online casino, and PokerStars for online poker in the Garden State.

Because of these existing relationships, and its early successes in New Jersey’s online gaming market, I suspect the two partnerships will be continued in Pennsylvania.

Another clue indicating Mohegan might turn to PokerStars in Pennsylvania is the duo’s longstanding relationship, dating back before legal online gaming in the United States.

The history between PokerStars and Mohegan Sun dates back to when the tribe’s eponymously-named Connecticut casino was an original host of PokerStars’ short-lived North American Poker Tour. The tour was launched in 2010 and ran for two years, but its existence was cut short by Black Friday.

Partnering with PokerStars would give Mohegan consistency in New Jersey and Pennsylvania, as well as an opportunity for further expansion in Connecticut and beyond. It would also allow the casino, and PokerStars, to advocate for interstate agreements.

It would be surprising if both of these partnerships (PokerStars and NYX) weren’t carried over to Pennsylvania – particularly PokerStars, as the company would be a great partner for Mohegan in Pennsylvania and seems like a no-brainer.

SugarHouse Casino and Rivers Casino an attractive combination

Sugarhouse Casino in Philadelphia and Rivers Casino in Pittsburgh are owned by Rush Street Gaming.

With Rush Street working on a casino project in another state considering online gambling regulation, New York, it would be a very attractive online poker partner.

Rush Street was approved for a transactional waiver in New Jersey. So if an interstate accord is agreed upon, the company could quickly expand its online footprint should it choose to do so.

What is unclear is whether Rush Street will use its own proprietary online gaming platform, or if they will look to an outside vendor to provide part or all of its online platform.

Hollywood Casino and Meadows another possible tandem

Like Harrah’s and Mount Airy or SugarHouse and Rivers, it could be a two-for-one deal for the online gaming platform that lands Hollywood Casino at Penn National Racecourse and/or Meadows Racetrack and Casino.

The proprietor of Meadows is Gaming and Leisure Properties Inc., which owns parts of nearly two dozen casinos, including the M in Las Vegas. The Penn National connection stems from National running most of GLPI’s casinos – the same Penn National that owns the Hollywood Casino.

Individually, or as a twosome, Penn National and Meadows will be strong brands in the market.

Presque Isle Downs and Casino might stand pat

Presque Isle Downs is one of only a few casino operators in Pennsylvania that may pass on online gambling.

The racino could enter into a partnership with a turnkey platform provider, but two interconnected things are working against it:

  1. Presque Isle is at the bottom end of the Pennsylvania casino industry when it comes to revenue (eight of the state’s 12 casinos generate 2x to nearly 5x the monthly revenue that Presque Isle does), which limits the resources they could devote to online gaming.
  2. Without the proper amount of funding, Presque Isles’ online gaming products would struggle for market share in what will be an extremely crowded market, with higher-profile operators who are willing to throw money around.

Will there be an online gambling party at Valley Forge?

Valley Forge is in pretty much the same boat as Presque Isle when it comes to revenue, but there have been reports indicating it has already found a teammate.

Last year bwin.party announced it had partnered with a Pennsylvania casino, but never revealed the identity; most believe that partner to be Valley Forge.

Comments made by Valley Forge Casino’s Robert Pickus at a hearing seem to confirm these rumors, as Pickus stated Pennsylvania would be wise to legalize online gambling sooner rather than later. Pickus cited the ability to craft interstate agreements (something that would certainly benefit bwin.party), and for Pennsylvania to work as an iGaming hub of sorts.

However, since this rumored partnership was first intimated, bwin.party was sold to GVC Holdings. The sale has led some to question bwin.party’s U.S. future, but GVC seems intent on staying.

Lady Luck will need some luck

Generating just over $3 million a month will make online gaming a tough lift for Lady Luck.

Like Presque Isle, it would seem to be a good partner for a turnkey platform provider, but is unlikely to play a major role in the market.

Sands Bethlehem… fuggedaboutit

All you need to know about Sands Bethlehem is that the casino is owned by Sheldon Adelson’s Las Vegas Sands Corp. Adelson completely opposes online gaming, and there is virtually no chance Sands Bethlehem launches an online gambling site.

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