Pennsylvania iGaming auctions reopen as state seeks new operators

Published on: December 27, 2022, 02:49 am.

Last updated: December 27, 2022, 02:49.

Companies interested in gaining market entry into Pennsylvania’s iGaming industry will soon be able to seek online casino licenses from the state.

Pennsylvania iGaming Interactive Online Casino Slots Table
A billboard in West Conshohocken, near Philadelphia, advertises Bet Rivers online casino. Pennsylvania gaming regulators will next month begin accepting new applications from interested iGaming operators that do not have a physical presence in the Commonwealth. (Image: Twitter)

The Pennsylvania Gaming Control Board (PGCB) today announced the upcoming resumption of the state’s iGaming permit auction window. From January 3, 2023, the PGCB says it will accept petitions from operators of interactive casinos that are not currently licensed in any capacity in the Commonwealth.

The PGCB has 12 remaining iGaming licenses it can issue. State gaming officials say there are three opportunities for online slot operations, three licenses for interactive bank table games and six certificates for non-bank table games, which generally means poker.

Each opportunity comes with a one-time license fee of $4 million payable to the state. The PGCB’s iGaming auction period will run for two months until March 3.

The second iGaming application period

This will be the second time the state will make iGaming licenses available to entities that do not currently have a physical presence in Pennsylvania.

Pennsylvania’s first round of iGaming bidding took place in late 2018. But the only applicant deemed suitable — Golden Nugget’s iGaming platform — has yet to receive an interactive license because “the application remains in the process,” the PGCB explained without further ado. details about the causes. the delay.

Unlike the iGaming licenses made available to the state’s brick-and-mortar casino interests through the 2017 gaming expansion package, which allows casinos to operate online slots, table games and poker, iGaming opportunities for companies that have not invested in Pennsylvania are offered a la carte The iGaming concessions offered to outside firms are considerably more expensive than the interactive gaming licenses offered to the state’s brick-and-mortar casinos.

Casinos paid just $1 million to secure iGaming rights with online slots, tables and poker. For an iGaming firm not tied to a casino, the cost of securing licenses for these three verticals would cost $12 million.

All iGaming licenses are renewable every five years at a cost of $100,000 per license. Gross income from online slots is subject to an effective tax rate of 54%. Online table games and poker rake are taxed at 16%.

The licenses the PGCB is re-bidding for next month are for “Qualified Gaming Entities” concessions. A qualified gaming entity has the ability to obtain one or more of the three categories of iGaming certificates that remain available in the Commonwealth without having ties to a licensed Pennsylvania casino.

iGaming continues to grow

The PGCB says that during its 2021/22 fiscal year (July 1, 2021 to June 30, 2022), online slots generated $847.4 million in gross gaming revenue. Interactive table game revenue totaled $349.6 million and online poker fees totaled $35.2 million.

In 2021/2022, iGaming generated approximately $341.7 million in fees on a combined GGR of $1.23 billion.

Revenue from online slots was up 40.5% on the state’s 2020/21 fiscal year. Table games are up 33% year-over-year, while poker rake revenue is up 15% year-over-year.

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