Pennsylvania finally legalized online poker last fall and now the industry is finally, slowly starting to ramp up. The first deadline for casinos to apply for interactive gaming licenses was early last week and though for a while it looked like very few or even none of them would file petitions, in the end, nine of the state’s twelve casinos not only apply for poker licenses, but applied for all three gaming licenses.

In Pennsylvania, the twelve land-based casinos (there are currently eleven, but one will open later this year) get first dibs on licenses. There are three types of licenses available: internet poker, internet table games, and internet slots. The application fee alone for each is $4 million. For those who applied for all three by July 16th, though, the cost was $10 million combined.

The following casinos filed petitions for all three licenses by the July 16th deadline:

Parx Casino
Mount Airy Casino Resort
Live! Hotel and Casino (opening later in 2018)
Sands Casino Resort Bethlehem
Hollywood Casino at Penn National Race Course
Valley Forge Casino Resort
Harrah’s Philadelphia Casino & Racetrack
Rivers Casino
Sugarhouse Casino

The first three on that list applied before the deadline, while the rest filed at the last moment on July 16th. While there is no guarantee that they will be awarded interactive gaming licenses, one would think they all will.

One notable name on that list is Sands Bethlehem. Sands is owned by the Las Vegas Sands Corp., whose CEO and founder is Sheldon Adelson, the man who wants to obliterate online poker in the U.S. Normally, there is no way that Sands would want to get involved in online poker, but the casino was sold to Wind Creek Hospitality in March for $1.3 billion. The sale has yet to close, but in the meantime, Sands applied for the licenses for Wind Creek so that Wind Creek would have them when the deal is finalized.

The other three casinos can still submit their licensing petitions, but they will now have to pay the full $12 million if they want all three. If there are still licenses available after August 14th, outside operators will be able to file petitions.

What is interesting about all this is that so many casinos are seeking all three licenses. Not only are the application fees expensive, but the taxes on internet slot revenue are sky-high. Operators will be taxes 54 percent of gross gaming revenue from slots plus another 2 percent local tax. The land-based casinos also pay 54 percent, but they have many other revenue streams. Slots players may also eat in a casino’s restaurant, visit the shops, stay in the hotel, etc. Online casinos have none of that; their slots profits will be decimated by this. Some experts thought it was possible that no casinos would pursue online slots licenses because of the tax.

Online poker and table games taxes are more reasonable, sitting at 14 percent plus the 2 percent local tax.

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