In a hearing held by the Pennsylvania House Democratic Policy Committee on Thursday, Kevin O’Toole, executive director of the Pennsylvania Gaming Control Board testified that after an extensive review of online gambling, the activity “can be effectively regulated” in the state.
O’Toole suggested that internet gaming licenses be offered to current land based gaming operators. He also touched on the hottest topic in in regulated US igaming: bad actors.
Though he did not address any specifics, he did emphasize that regulations in the state should ensure that licensed operators and their vendors be “free from inappropriate association.”
O’Toole also highlighted the need for sufficient consumer protection and financial controls in regulating online gambling.
He made it clear that responsible gaming can be administered via an online platform; however, he did express concerns about current age verification practices pointing out that there is a risk that a child can access the online gambling account of a rightfully registered user.
When asked about the effectiveness of the geolocation technology used to limit access to players within the borders of other US regulated states, O’Toole remarked, “it’s pretty reliable technology.”
Land Based Operations
David Satz, Senior Vice President of Government Relations and Development at Caesars Entertainment Corp highlighted the opportunity that internet gaming presents to land based operators.
He dispelled the myth that igaming cannibalizes the business of land based casinos stating that 91% of Caesars online gaming customers in New Jersey were not in their database of players for their land based casinos. He also indicated that those that were in the database increased their activity in the brick-and-mortar environment.
Representatives from Thrive Gaming estimated that Pennsylvania could expect 300,000 players that generate $130 per month in revenue on average leading to $450 million in gross gaming revenue once the market matures.
Low consumer awareness was cited as a barrier that could reduce first year estimates by as much as 50%, but the potential “could hit into the billions” if Pennsylvania becomes an igaming hub for other states. As a result they encouraged the regulator to consider interstate agreements when drafting regulations.
Unfortunately the lawmakers in attendance for the hearing seem to be less knowledgeable on the topic of online gambling than their California counterparts.
It seems that legislators will need to attain a greater level of comfort on some issues before they advance internet gaming regulation including how financial transactions related to online gambling occur, how tax rates impact all facets of the online gaming ecosystem, how to reduce the patronage of unregulated online gaming and the technology available to mitigate the associated social risks.