The Wolf administration continues to monitor how the expansion of online gaming in recent years has affected the gaming industry and Pennsylvania residents, and continues to review the agreement.With Michigan being invited to join the Multi-State Internet Gaming Agreement (MSIGA) this week, all eyes are now turned towards Pennsylvania. To date, PA is the largest state to legalize online poker in the US and it has yet to join the interstate compact.
In an exclusive statement to PA Gaming Review just a day after the news that the Mitten State was joining MSIGA, Pennsylvania Governor Tom Wolf’s administration appears to be moving away from the state’s previous stance that it needs more clarity on the Wire Act and, rather, is now considering whether it should follow Michigan’s lead in joining the multi-state compact for poker.
“The Wolf administration continues to monitor how the expansion of online gaming in recent years has affected the gaming industry and Pennsylvania residents and continues to review the agreement,” Press Secretary Elizabeth Rementer told Pennsylvania Gaming Review on Thursday.
Previously, the state had taken a conservative approach to the prospect of joining the multi-state poker compact, either offering a no comment or indicating that it still wanted clarity around the Wire Act.
However, no such language has materialized in the latest statement issued by a key member of the Wolf staff. In fact, whether the state joins the compact or not ultimately rests with Governor Wolf himself and not in the hands of the regulators, a spokesperson for Pennsylvania Gaming Control Board (PGCB) told PA Gaming Review.
“The matter currently does not reside with us but with the Governor’s office, which would need to sign off on any multi-state contract,” said Doug Harbach, Director of Communications for the PGCB to PA Gaming Review.
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Pennsylvania Was Cautious But May Change its Stance
The Pennsylvania online poker market has been live for nearly three years. Its iGaming law allows for its state regulators to enter into an agreement with other states for the purpose of interstate gaming.
Even ahead of the launch, its state regulator, the Pennsylvania Gaming Control Board (PGCB) did indicate that they are in talks with the existing state members of the MSIGA.
However, the reinterpretation of the Wire Act by the Department of Justice (DOJ) under the Trump administration in late 2018 — stating that the law not just applies to sports betting but online gaming and basically turning interstate online poker illegal — stalled the process.
Since then, the PGCB has understandably been quite cautious about proceeding with shared liquidity. But with the Wire Act becoming less of a hurdle thanks to a string of favorable decisions starting in 2019 and, more recently, IGT suing the Department of Justice (DOJ), it is fair to say the Trump interpretation is not much of a concern to operators and regulators.
Michigan Joining the MSIGA Could Open the Floodgates for Expansion of Interstate Poker in the US
The [Multi-State Gaming Association] continues to be forward-thinking and welcomes the interest of additional gaming jurisdictions in becoming a party to the Agreement.Michigan and the three other MSIGA member states are certainly not worried about its implications, especially now that the Great Lakes State has been admitted to the agreement. It could very well set an example to other states such as Pennsylvania and even smaller states like West Virginia and Connecticut, where online poker is legalized but has yet to go live. WV, in fact, has already indicated interest in joining such a pact last summer.
Pennsylvania joining, along with Michigan, would be a game-changer for the online poker industry in the US.
Of all the states that have legalized online poker in the US to date, Pennsylvania is the largest in terms of population. It houses nearly 13 million residents which is the same number of people living in the three active MSIGA member states — New Jersey, Nevada, and Delaware — combined. Adding Michigan’s 10 million population, the total jumps up to 23 million. Should Pennsylvania join, it would skyrocket to a whopping 36 million.
It has been proven in multiple jurisdictions that merging player pools leads to increased revenue for the operators, which ultimately provides greater tax dollars for the state governments and state regulators. Bigger tax revenue could induce more states to legalize online poker and, ultimately, more states join the poker compact.
Shared liquidity also allows operators to offer their customers a much better offering, spread out more games, and offer bigger prize pools.
Rebecca Satterfield, Manager of the Association and the Internet Gaming Manager for the Delaware Lottery was clear in the joint press release that they wanted to expand the pact to as many states as possible.
“The Association continues to be forward-thinking and welcomes the interest of additional gaming jurisdictions in becoming a party to the Agreement,” Satterfield said.
If Pennsylvania indeed joins the pact, every poker operator in the US, including PokerStars and BetMGM, would be able to host a network spanning at least three states. WSOP, on the other hand, which is the only network to take advantage of the existing pact, would be able to support a five-state-wide network.
Michigan still has to “fully execute” the agreement. Once the review is done, operators would need to receive explicit authorization from MGCB to launch shared liquidity involving Michigan — both steps should not take very long to complete.
But the million-dollar question is: When is Pennsylvania expected to join? It could take months, but Michigan joining was a pivotal step towards creating a domino effect that could change the face of the entire US online poker market.