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Will Online Poker In PA Reshape The Land-Based Leaders?

While the revenues tend to pale in comparison to what slot machines and table games bring in, poker is still big business at Pennsylvania casinos.

In fact, the ten poker rooms operating across the state managed to pull in more than $431 million in revenue since the first poker games launched in Pennsylvania in the summer of 2010. That’s an average of more than $60 million a year for the past seven years.

Things have died down from the game’s PA peak though. Poker revenues hit just under $30 million in the last fiscal year. However, the state’s most popular poker destinations continue to thrive. Some are even continuing to invest in the game.

PA’s top-grossing poker room

Parx Casino, which has long been home to the state’s top-grossing poker room, just finished construction on a brand new 48-table room. It opened up to the public inside the Main Casino building in January 2018.

Parx reported more than $8.5 million in poker revenues in the last fiscal year. No other Pennsylvania poker room came within $3 million of that. Second-place Sands Casino Resort Bethlehem posted $5.2 million in poker revenue.

The poker rooms at SugarHouse Casino ($3.9 million), Rivers Casino Pittsburgh ($3.4 million), and Harrah’s Philadelphia ($2.3 million) were the only other rooms to report more than $2 million in revenue during fiscal 2016/2017.

PA lawmakers passed a comprehensive gambling expansion package in October 2017 that will ultimately open up a legal and regulated online poker market in the state. The regulatory and licensing process is currently underway with the state’s 12 existing casinos (and the forthcoming Stadium Casino in Philadephia) being offered the first 13 online poker licenses.

If any of the 13 online poker licenses go unclaimed, the state will open up the application process to outside entities. This means online poker operators who don’t currently have a physical presence in PA at this time could potentially enter the market.

Online poker coming to PA in 2018

All indications are the state’s first online poker sites will start opening up to the public sometime in the second half of 2018.

The additional revenue source online poker can provide existing PA poker rooms could have some impact on overall poker revenues across Pennsylvania. However, it isn’t likely to be a major one. At least not at the top of the food chain. Then again, anything can happen.

Parx may want to launch a PA online poker site just to maintain it’s status as the top poker revenue-generating body in the state. Then again, it might not have to pony up the licensing fee.

New Jersey online poker sites have average approximately $25 million per year in revenue since legal and regulated online poker launched there in 2013. Granted, PA is more populous than NJ, but let’s assume there’s a similar-sized market in PA at launch. Let’s also assume the nine other live poker rooms in PA all launch online poker sites. If they split the pie revenue pie evenly, each would generate around $2.8 million in revenue annually.

That wouldn’t be enough to overtake Parx as PA poker market leader, even for the current second place property, Sands. Plus, let’s not forget that Sands owner Sheldon Adelson has been quite vocal about his moral opposition to online gambling. That means Sands isn’t likely to even launch an online poker site in the state to try to compete. So even if the market is bigger, it probably won’t generate enough revenue to catch up with Parx.

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Parx could stand pat

Parx would likely be safe if they stand pat, but that doesn’t mean they’re likely to do that. It is the biggest name in live poker in the state. Running a companion online poker site with satellites into live events like Parx Big Stax, the state’s largest and most successful live poker tournament series, would only help it get bigger. It certainly something they have to be considering.

Rush Street seems ready

Two of the poker rooms a little further down the list are most likely considering it as well. SugarHouse Casino and Rivers Casino Pittsburgh are both owned by Rush Street Gaming. Rush Street already has an online gambling site in New Jersey operated by its in-house Rush Street Interactive. Plus, it also produces the popular Poker Night in America TV show and its free-to-play online poker mobile app.

Rush Street has already leveraged the popularity of the Poker Night in America brand successfully. It uses it to draw players into events at its Philadelphia and Pittsburgh locations. The numbers have been good. In fact, when combined, the poker revenues from SugarHouse and Rivers in fiscal 2016/2017 are actually greater than Parx’.

If Rush Street wants to continue building its brand in the PA poker market, an online site would be the next logical step. Plus, if it can outperform the competition, it could have a real impact on the overall poker revenue market leaders in the state.

WSOP.com almost certainly getting involved

The World Series of Poker will almost certainly launch a branded online poker site in PA. Of course, it would do so with the assistance of fellow Caesars Entertainment entity Harrah’s Philadelphia. Harrah’s PA poker revenues remain a fair difference behind Parx and Rush Street. However, partnering with the biggest brand name in poker to launch online will likely have a positive effect on those numbers.

It remains to be seen who wants in the PA online poker market and who doesn’t.

One of the smaller poker rooms could conceivably partner with an online poker giant and throw everyone for a loop. For example, Mohegan Sun Pocono has an existing relationship with PokerStars from its role managing Resorts Casino. A site with superior software could grab more than its fair market share right out of the gate. It might even turn the entire PA poker market upside down. We’ll just have to wait and see.