Will governor take action after lowest iPoker revenue in 44 months?
Operators of online poker in Pennsylvania just recorded their lowest collective monthly revenue since February 2020.
The state of West Virginia last week gained approval to enter the Multi-State Internet Gaming Agreement, a compact among states that will thus soon increase to five of them other than Pennsylvania that allow online poker across state lines.
Michigan’s entrance into that group has reportedly increased the volume of play substantially in that state and New Jersey this year as a result of PokerStars combining its player pools for shared liquidity in those two states, which are currently the largest by far in the MSIGA.
Put those three items together, and it sure sounds like iPoker operators would benefit from having still-bigger Pennsylvania join that compact, in addition to how it would help whatever percentage of 12.9 million Pennsylvanians would be interested in playing poker from home with like-minded residents of Michigan, New Jersey, Nevada, Delaware, and West Virginia.
But just if or when that might happen is anyone’s guess. It appears no closer today than when PokerStars launched the first online site in Pennsylvania in November 2019. The state now has four operators — PokerStars, WSOP, BetMGM, and Borgata — but essentially just three player options since BetMGM and Borgata share their platform.
The $2.35 million in revenue they collectively generated from rakes in October 2023 was 5.8% less than a year before, 17.5% less than in October 2021, and the lowest amount since February 2020, when only PokerStars operated.
For several years, the online poker volume in Pennsylvania has been stagnant or decreasing while overall regulated online casino revenue has surged. It’s possible the only thing that could boost iPoker is to join with the other states, creating broader player pools that would enable a wider range of cash games at different times of day and denominations and more tournaments with higher prize payouts.
It’s up to governor, not MSIGA or PGCB
Administrators of the MSIGA do not solicit additional states to join the existing ones — it is left up to each jurisdiction’s own elected officials.
“If someone wants to join, we stand ready and waiting [to discuss it],” Michael Morton, a Nevada Gaming Control Board official who helps oversee the compact, previously told Penn Bets.
Doug Harbach, spokesman for the Pennsylvania Gaming Control Board, said iGaming operators have poked the agency in the past about the state’s interest in joining the multi-state agreement. Doing so is not a decision left up to the regulatory agency, however, although it would certainly be involved in any discussions about it.
“We inform [operators] that the Pennsylvania Race Horse Development and Gaming Act requires the governor to agree to, and execute, any such agreement, and they are certainly aware of the matter,” Harbach said, referring to Gov. Josh Shapiro. “The last administration was not comfortable moving forward with such an agreement, and we have not heard otherwise from the present administration.”
Shapiro, a Democratic former state attorney general, this year succeeded Pennsylvania Gov. Tom Wolf. His first year in office has been consumed largely by protracted budget negotiations involving a Democratic-Republican partisan divide in the legislature.
His office did not respond to a US Bets request for comment this week about the poker issue. It may not be a priority, considering the operators are from out of state and the 16% tax rate on iPoker generates little state revenue. Last month’s $2.35 million in operator revenue from the play was just 1.5% of the overall iGaming revenue, as slots and table games like blackjack and roulette are the big earners.
For the foreseeable future, Pennsylvania poker players who want to play from home instead visiting one of the state’s casinos have the choices offered by the four operators’ three platforms, with the PokerStars site clearly the busiest. It is regularly responsible for more than 60% of monthly revenue in the state.
But in a Pennsylvania plateau, the money being made by the four operators combined is typically no more than what PokerStars made on its own as the state’s sole site in 2020-21. And nothing matches the volume PokerStars saw in April-May of 2020, when the COVID outbreak confined most of the population to their homes and online poker revenue more than doubled.
Pennsylvania’s entry into the MSIGA wouldn’t necessarily match that kind of surge. It would certainly do something to boost play and revenue, however. The question is if poker stakeholders — whether running the sites or playing on them — will ever find out.
