Pennsylvania Governor Tom Wolf signed off on a bill in October authorizing the state’s casinos and other “qualified entities” to take their games online. The bill authorized online poker, online casino games, gave daily fantasy sports the official OK and even authorized online sports betting if the federal sports betting prohibition is ever repealed or declared unconstitutional.
We wrote about the bill at the time and the Governor gave signed it into law a few days later. Pennsylvania now has all the legal groundwork covered for everything except sports betting. All that needs to happen now is for the Gambling Control Board to begin accepting licensing applications, approving operators and then those operators getting up and running.
As far as sports betting goes, that portion of the law is on hold until we find out what happens with New Jersey and its big case now in front of the Supreme Court of the United States. If the Supreme Court rules in favor of New Jersey and rules the Professional and Amateur Sports Protection Act (PASPA) unconstitutional, Pennsylvania will be ready to begin regulating sports betting.
The Pennsylvania gambling law has been in effect for a couple of months now, but a new issue has crept up recently. The issue has to do with skins. In gambling industry terms, skins are branded gambling websites that operate under one license.
For example, New Jersey allows skins so that the Borgata operates a number of websites such as Borgatacasino.com, PalaCasino.com and Scorescasino.com all under one license. Other land-based license-holders also operate skins in this same manner.
A Question of Skins in Pennsylvania
The Pennsylvania gambling law covers a lot of ground between legalizing online gambling and fantasy sports, potentially legalizing sports betting and expanding real-world gambling. However, one thing the law failed to mention was the issue of skins such as they have over in New Jersey.
The problem is one of omission: the new law does not specify how many skins an operator may bring to market. That question will be left with the Pennsylvania Gaming Control Board (PGCB). And now, rumor has it the PGCB may be leaning towards limiting each operator to just one skin.
As Legal Sports Report correctly noted last week, limiting skins will only serve to limit competition and put smaller casinos at a disadvantage. Legal Sports Report explains that smaller casinos will suffer as they will be unable to sell rights to additional skins operators and therefore unable to offset the tremendous costs of licensing ($10 million for an all-in-one license to offer poker, slots and table games).
Bigger casinos will have little troubling coughing up $10 million to get involved, but smaller casinos will need to find other ways to justify or at least offset the cost. Lending their names to skins operators would help significantly in this regard. Skins operators would also be able to help with marketing costs and shorten the gap between bigger casinos and smaller casinos when it comes to marketing budgets.
That’s not to mention the ever-present relationship between competition and consumer benefits. The more competition there is in any industry, the more consumers tend to benefit with increased choice, providers working harder to differentiate themselves and better prices for consumers.
In the report, Legal Sports Report also points to New Jersey as a case study for the benefit of allowing multiple skins. They note that New Jersey now has five licensees operating 17 skins for an industry that is now earning more than $20 million in revenue every month. Since going live, New Jersey online casinos have launched live dealer games, virtual sports and other products.