House wins, even for casinos
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Casinos that eagerly embraced Pennsylvania’s massive gambling expansion in 2017 forgot their own rule — the house always wins.
The expansion authorized online gambling, and 10 casinos anted up $10 million each for state licenses to put games online. But after paying the government, and before they were able to put the games online in 2019, the casinos faced online competition from ... the government.
The Pennsylvania Lottery put its own games online. In a lawsuit that seven casinos filed against the lottery, they showed that at least nine of the lottery’s games have the same titles or themes as casino slot machines or online sites.
The casino operators especially were vexed because their payouts for online games, according to evidence in their lawsuit, ranges from 81.6% to 89.1% of the amounts wagered. That is akin to the 85% payout from physical slot machines required by state law. Lottery instant online games pay out between 61% and 77%, according to the testimony.
On Wednesday, Commonwealth Court Judge Renee Cohn Jubelirer dismissed the casinos’ lawsuit, in effect making suckers of casino operators who assumed that the state would protect their interests after accepting big fees and heavily taxing the casinos’ take.
The Legislature never stated, the judge found, that its intention was “to preclude either one of these newly authorized online games ... from taking advantage of technological advances, changing in gaming and entertainment, or features that are found in existing popular entertainment.”
Fortunately for casinos and the lottery, though, gamblers aren’t picky about whether private or public croupiers take their money.
The lottery has reported $170 million in profit on the online games since May 2018. Total sales from July through December, the first six months of the current fiscal year, were $433.7 million, up from $290.2 million for the same period of the prior year.
The 10 casinos’ online revenue for the entire 2019 fiscal year was $240.9 million. For the first 10 months of the current fiscal year, July through April, their revenue was $707.1 million.
Whereas the casinos might appeal their legal loss, gamblers who lose to the casinos and the state don’t have that option.
