Pennsylvania sportsbooks could be approved as “early as mid-August”

Executive director of the Pennsylvania Gaming Control Board, Kevin O’Toole, says the regulator is at an advanced stage in its preparations for the launch of igaming and sports wagering in the state.

iGaming Business North America: How on the whole have the framework and regulations been received by the various stakeholders in PA?

Kevin O’Toole: Initially it’s important to note that in Pennsylvania we have embarked on a multi-faceted group of gambling expansion initiatives, and igaming is one of the key expansions, but not the only one.

We are dividing our time as best as possible to roll out a number of other initiatives, including airport gaming, which would be internet-based at qualified airports.

But certainly igaming is up there at the top in terms of potential success and interest by all the various stakeholders. We have promulgated regulations, we’re not finished with that process but we’ve done the licensing, we’ve done some of the operational points, including the registration of accounts, and we’ve addressed the stakeholders involved.

So that would be the current land-based casinos, that have a significant role, as well as platform providers, who would provide the hardware and software to run the igames. And we’ve also incorporated, in an effort to be as competitive as possible, the ability to use skins.

We’ve had discussions with all of the various stakeholders, there have been very good exchanges of perspectives, but I’m sure there will still be some areas that necessitate further conversations to  make sure that the stakeholders understand what our expectations are.

And also that we understand what their logistical concerns are, we want this to be a successful endeavour but we also have an obligation to make sure that the objectives of our statute are met.

Some potential stakeholders have informed investors that they will be launching real-money igaming in PA in the second half of this year.  Is this a still a realistic timeline, and when do you anticipate a full roll-out of all products?

We have a specific timeframe set out in our standard Gaming Act and the first timeframe is a 90-day period. During that period any of our land-based casinos can put in their requests for interactive gaming, which would include all three of the types of games that are authorised.

In Pennsylvania the legislature authorised poker-type games, slots and table games. So we will see what we get in the first 90 days and then after that period is over we have a 30-day period where any other of the land-based casinos that may want less than the three-game package would be able to request something less.

Then after that we have to assess where we are and see what is still available. There is an overall limit on the number of igaming certificates – it’s a pretty generous limit of 39; 13 poker, 13 slot and 13 table games. Then we have the opportunity to request qualified gaming entities who might be interested in entering the Pennsylvania market at that point.

There is a strong possibility that we may get up and running in the latter part of this year. If it’s not the latter part of this year I would be confident in saying the first quarter of next year at the latest. We’ve positioned our agency to be able to process those petitions expeditiously.

The 54% tax on slots settled upon by legislators will create some extra work for you in terms of protecting regulated sites from offshore competition and helping channel players to the legal offer. How will you be going about this?

That’s a topic that bears further consideration after you roll out and after you see how the activity is being received. We are a jurisdiction that doesn’t have igaming at the moment. Illegal igaming is out there, we certainly recognise that.

But fortunately we believe that our land-based casinos are doing very well so I don’t think we would conclude at this point that illegal igaming is having a serious affect on our casino industry.

We would certainly look at all facets of how to address illegal competition once we get up and running.

It’s important to note that our legislature provided a complex piece of legislation, very well thought out on their part and it has different tax rates. We have a much lower tax rate for poker play and table games so the challenge will be to make it successful on slot-like games.

There is a consideration of tax rates but we are encouraging our land-based casinos to accept the entire package of games. They are going to need experienced platform operators to help with that.

The land-based casinos holding the main licences will be able to launch five platforms and unlimited skins off these. Why did you decide against a cap on the number of skins, as is in place in New Jersey?

We looked at other jurisdictions and New Jersey has a very successful model and they will continue to be very successful. We wanted to make sure that we had an open and competitive marketplace for internet gaming. The idea was to encourage competition and availability of game content.

We think that we’ve created a welcoming environment in Pennsylvania. When we get more information from the casinos that want to get into igaming we’ll know a lot better.

The new rules state that skins must not offer games “independent… from the interactive gaming certificate holder’s webpage”. Does this mean that URLs of the skins will need to run off the main licence holder’s homepage, and that players will only be able to access the skin sites from there?

We’re looking for a dual branding application, where the skin is identified as well as who is behind that skin. It’s a new activity in Pennsylvania so with that we’re expecting that the platform operators and skins will adapt to a dual branding application.

They can be through the same website or URL, if that’s the most efficient way to do it, but all players in our jurisdiction, just like in other jurisdictions, have to register and provide identification and through that account we want that account to be centralised with the certificate holder.

The account can be set up through the platform operator or directly with the certificate holder. But there has to be a technological aspect that allows the registered accounts to all be in a centralised database. We want the certificate holder to know who the registered players are on their platform.

PA legislators recently passed temporary regulations for ilottery, which run for two years. What are the next steps for you as a regulator in this area? Do you expect to have a permanent framework and full ilottery offer in place within this time frame?

We have a two-year window of time to study how these regulations are working and to receive comments from the various stakeholders. Then towards the tail end of that two-year period we can make modifications, and there is a specific process for permanent regulations, which we will follow. So it will be in the early part of 2020 that we put together any changes that we think are beneficial.

Following SCOTUS striking down the US ban under PASPA, you can now move forward with regulating sports betting in Pennsylvania. When do you anticipate this happening and the first sportsbooks going live?

With the US Supreme Court striking down PASPA, the PA Gaming Control Board can now begin to implement the legislation that was passed late last year authorising our casinos to engage in sports wagering activity. Our board will begin approving regulations in the next several weeks and that process should be complete by the end of June or mid-July. The 13 casino licensees in Pennsylvania can begin to submit to the board petitions for a sports wagering certificate. These petitions will include the details for establishing sportsbooks. Those petitions will be reviewed by the board and, if everything is in order, the petitions could be approved as early as mid-August.

Can you tell us a bit more about the consumer protection measures that will be put in place alongside the new regulations? What have you learnt from other jurisdictions in this regard?

We have a very strong commitment to ensuring the awareness of the potential for problem gambling, we require a number of different initiatives currently, including training at land-based casinos and that is also in our igaming legislation.

But we’re also going to require that the platform operators offer patrons the ability to set limits and those limits can be based upon how long they want to play.

If they only want to play a certain amount of time they can select an option to stop after a period of time, and they could also set an amount limit, that is their losses get to X amount, they’ll have to stop gambling for that session. And they could also impose upon themselves account balance limitations that control the stake.

We have a requirement that any individual can request to be excluded from igaming – that is successful in the land-based casinos but the application of that concept is significantly different on the igaming side. So we’re still discussing among ourselves and with some of the stakeholders how best to implement a self-exclusion programme.

Players in our jurisdiction, as well as New Jersey, Delaware or Nevada, can bet on multiple accounts because we’ll have multiple certificate holders, so it gets a little more difficult to effectively apply a self-exclusion when a player can establish multiple accounts.

On the land-based side, we have 12 casinos, so if someone wants to self-exclude, we have a process in place where all 12 of those casinos do their best to keep a self-excluded person out of their property but on the land-based you have pictures of people.

I think you can do it, you can apply it based on identifiers, but it’s harder. It’s a new venture and we’re still working out the details.

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