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How Long Until Pennsylvania Pools Poker Players?

Pennsylvania will ideally launch online poker by the end of 2018. The sharing of its new player pool with the three states already doing the same will probably not be far behind it.

State lawmakers passed online poker legislation in October 2017 as a part of a comprehensive gambling expansion package. The licensing and regulatory process for online poker operators is currently ongoing. Its timeline suggests the first PA online poker sites should be up and running by the end of the year.

The Multi-State Internet Gaming Association

The first licensed and regulated US online poker sites launched in fenced-in markets in Nevada, New Jersey, and Delaware in November 2013. Sites in Nevada and Delaware started sharing player pools in 2015.  That was when the two signed an interstate compact known as the Multi-State Internet Gaming Association (MSIGA).

New Jersey signed on to that interstate compact in October 2017.

As the only online poker operators with sites connected in all three states, and 888 Poker were the first to apply to launch tri-state shared liquidity games.

888 is the long-time software provider for Caesars Interactive Entertainment and it’s World Series of Poker-branded online poker sites. 888 also provides online poker software to all three sites in Delaware.

The first ever tri-state shared player pool online poker games officially launched on April 30, 2018.

The games launched on a network that included the sites in New Jersey and Nevada, 888 Poker in New Jersey, and the Delaware online poker network’s Delaware Park, Dover Downs, and Harrington Raceway sites.

The hope is that cash game traffic and tournament prize pools will grow exponentially in the new tri-state market, attracting even more players and growing US online poker even further.

Getting PA on board

With PA online poker launching by the end of the year, the plan is to get Pennsylvania to sign onto MSIGA and make it a four-state market. The hope here is that the total US shared liquidity online poker market will double in size if and when Pennsylvania does sign the agreement.

However, one look at PA’s online poker legislation makes it more of a question of when rather than if.

In fact, the state’s new online poker legislation has provisions for shared liquidity built right into it.

The legislation actually gives the Pennsylvania Gaming Control Board (PGCB) the authority to enter into interactive gaming reciprocal agreements with other states. Plus, it allows licensed operators to offer games to out-of-state players and local players to participate in out-of-state networks.

What it doesn’t do, is specify exactly when that will happen. That makes it difficult to predict how long until PA online poker sites will be pooling players with sites from other states.

However, the state is clearly anticipating it will ultimately enter into a shared liquidity agreement like MSIGA. Particularly considering language in the legislation alludes to the need for interstate or even international, partnerships to be made in accordance with the laws of each jurisdiction.

The language also includes a provision allowing operators to bypass the testing process for games in PA if they’ve already undergone testing elsewhere. A provision that would likely only be used under a shared player pool agreements with other states.

PA online gambling laws also permit operators to route internet gambling traffic through other jurisdictions. Another provision that could be in place simply to make the transition to shared player pools an easier one.

But again, none of this language suggests when it will happen, only if.

The fourth state to sign MSIGA

If Pennsylvania does get online poker up and running by the end of the year, there are some indications it will become the fourth state to sign on to MSIGA sometime in 2019.

Partly because waiting any longer simply doesn’t make sense for the local industry or the state.

Pennsylvania’s population of 13 million is the same as New Jersey, Nevada and Delaware combined. Which suggests the state would likely double the interstate player pool once PA does sign. Something that would create the kind of revenue operators are likely to be interested in seeing sooner rather than later

Plus, it could mean even more for more online poker operators than the current tri-state agreement. Currently, only 888 and sites benefit from MSIGA, because they are the only ones that can.

However, online poker organizations operating in New Jersey could conceivably launch in Pennsylvania by the end of this year. Sites like PokerStars and partypoker. Then they would be ready to join those benefiting from MSIGA when Pennsylvania signs on next year.

So far, the legal and regulated online poker market across the United States has generated less than 10 percent of the $245 million in annual revenue generated by New Jersey online casinos alone.

PA poker margins

The numbers have been so disappointing the gaming giants behind the sites have been loath to spend money on helping the market grow. They obviously fear that growth would only be incremental. Pennsylvania could change all that. Particularly because the margins for operators should be a lot better for online poker than online slots.

The state plans to charge operators a 16 percent tax rate on online poker revenue, compared to 54 percent for online slots.

This could mean more marketing and promotional dollars get put behind poker. Particularly as operators see the potential to make more money for themselves. Rather than sharing more than half with the state.

What that means for the timeline of Pennsylvania signing into MSIGA is hard to say. Except that online poker operators will potentially be pushing for PA to sign on as soon as possible. This allowing shared player pools sooner rather than later.

It may be difficult at this time to predict exactly when Pennsylvania will sign onto MSIGA. In other words, when PA online poker sites will start pooling players with sites from New Jersey, Nevada, and Delaware. However, it seems like an inevitability that it will happen. Plus, the best bet is that it will happen sometime within the first year of online poker launching in PA.