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Pennsylvania Cautious as Online Poker Delayed to Q3 2019

Written by Jennifer Newell
Last updated on
Jennifer Newell

The road to online poker in Pennsylvania has been paved with good intentions but many, many delays.

From there start, delays were the name of the game. It took several years for Pennsylvania lawmakers to pass a law to legalize and regulate online poker and casino games, which they finally did in late 2017. But the process of implementing the new law and building the new industry has also been fraught with confusion and uncertainty, at least in the eyes of the general public, in the nearly year and a half since.

As 2018 came and went, it became clear that online poker and casino sites were most likely going to launch sometime in 2019, and earlier estimates for the year seemed reasonable – late in the first quarter or early in the second, probably. After all, the Pennsylvania Gaming Control Board has been regulating land-based casinos for years, and the regulator was able to look to neighboring New Jersey for advice on the establishment of the new online component to its gambling industry.

But, in the words of the prolific lyricist Bruno Mars, “Stop, wait a minute.”

Enter the US Department of Justice’s Office of Legal Counsel, specifically its recent opinion containing a new interpretation of the US Wire Act. That decision, revealed in January, has the potential to turn the online gambling industry in various states on its head, not only stopping any interstate online poker shared liquidity plans but delaying more aspects of the internet industry as well.

Courtesy of New Hampshire, the Wire Act decision will be heard in the US District Court in the coming months, possibly clarifying the opinion or even overturning it altogether. But until that happens or some further clarification is issued by the Justice Department, Pennsylvania can only do so much toward the launch of online gambling for players in Pennsylvania.

PGCB Finally Speaks

The Pennsylvania Gaming Control Board (PGCB) has been transparent throughout the process of preparing for the launch of online poker and casino games sites but not as forthright as many would have hoped. Updates have come through hearings and journalistic sources, not via a typical press release or website update system. For the most part, that has left interested parties at the mercy of sparse updates at irregular intervals over the past year and a half.

The most recent significant update came in late 2018 when the PGCB officially awarded PokerStars its license to offer online poker in Pennsylvania.

At the end of February, 2019, however, several members of the PGCB appeared at the Pennsylvania House Appropriations Committee budget hearing. The main topic that lawmakers addressed was the new Wire Act opinion and how it will affect the rollout of online gaming sites.

PGCB Executive Director Kevin O’Toole handled most of the questions, though he had to admit that there are numerous unknowns at this point. First, it is unclear as to how financial institutions will handle payment processing for legal poker and casino sites per the new Wire Act interpretation, and the DOJ has offered no guidance whatsoever as to any part of handling the opinion.

On the positive side, O’Toole reported that no operator in Pennsylvania has expressed any desire to pull out of a licensing deal for online poker or casino games due to the Wire Act decision. The PGCB has been in close touch with the operators, and they have begun to receive information from them regarding plans as to how they will deal with potential interpretations of the Wire Act.

As for the launch of online sites, O’Toole was vague. On the one hand, he stated, “We are getting close.” But he then noted that testing still needs to be completed and certified, responsible gambling parameters must be met, and all servers must be physically located within the state, verified, and tested. Regarding licensing, however, he said it is “very far along with very little left to do.”

Overall, O’Toole said that sites could be up and running within three to four months. Specifically, he said that it could happen at the end of the current fiscal year, which ends on June 30, 2019, but most definitely at the beginning of the next fiscal year, which begins on July 1, 2019.

The news about interstate compacts was not so positive, though. Most analysts read the new Wire Act opinion as criminalizing interstate online gaming, which primarily pertains to online poker. And per PGCB Chief Counsel R. Douglas Sherman, things don’t look good. “The DOJ opinion likely has put the kibosh on interstate liquidity agreements because then you would be playing across state lines, which now appears to be prohibited. I have been in discussions with representatives from New Jersey, Delaware, and Nevada, which had previously entered into such an agreement for poker.”

A Fluid Timeline

It seems that the PGCB has a plan in mind to launch online poker and casino sites in late June or early July. That will be the time of the World Series of Poker in Las Vegas, and player attention may be severely diverted, but it might be a good time for testing.

Meanwhile, the Wire Act lawsuits must make their way through the court system. If sources are correct, written briefs for the case in the US District Court in New Hampshire will be in by April 8, with oral arguments following within days, but the judges may take up to a month or more to render a decision.

US Deputy Attorney General Rod Rosenstein has delayed the enforcement of the Wire Act opinion through mid-June, and it will likely be extended per the needs of the courts.

Any of those potential delays could push Pennsylvania’s online gaming launch further out into the summer months to avoid any confusion with federal law.

The timeline is currently written in pencil, and there is a large eraser on standby.

 

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