PA Lottery’s Online Games Survive Land-Based Casinos Challenge
A coalition of seven Pennsylvania casinos that filed a lawsuit seeking an injunction to stop Pennsylvania’s Lottery from offering online casino-style games suffered a major blow in court this past Friday.
Commonwealth Court Judge Renee Cohn Jubelirer denied the injunction request saying that the seven casinos had not established they would suffer a certain loss of business because of Pennsylvania’s iLottery games.
The Pennsylvania Lottery launched in May 2018 its online lottery product as part of a sweeping gambling overhaul authorized by Gov. Tom Wolf in the fall of 2017. Customers can access the iLottery section on the Lottery’s official website both via desktop or the Pennsylvania Lottery app.
The launch of the iLottery product enraged many casino operators in the state, who argued that the games offered by the Pennsylvania Lottery mimicked too closely casino-style games such as online slots.
As mentioned above, seven of the state’s 13 casinos jointly filed a lawsuit to the Commonwealth Court in May, seeking to stop the provision of iLottery games.
In its lawsuit, the seven casinos said that the Pennsylvania Lottery offered “illegal, simulated casino-style online games” and that those were promoted to potential customers as young as 18. In comparison, the state’s casino operators, most of which are expected to launch their own online gaming operations later this summer, are not allowed to service players under the age of 21.
In a statement announcing their move, the casinos said that the games offered by the Lottery were illegal and that, “to make the matters even worse, the agency is promoting casino-style gambling to teenagers.”
The gambling venues also expressed concerns that iLottery’s games could result in the casinos losing revenue when they start their own online gambling operations. They noted that “any loss in casino revenue will hurt Pennsylvania’s tax collection for property tax relief and local improvement projects funded by gaming tax dollars.”
Judge Cohn Jubelirer’s Opinion
Judge Cohn Jubelirer said Friday that while she found “striking similarities” between some of the titles offered by iLottery and traditional online or land-based casino games, Pennsylvania’s gambling expansion law was ambiguous enough about the disputed game categories that she did not believe the brick-and-mortar facilities had “fully and completely” established a right to relief, or at least not for now.
While Judge Cohn Jubelirer’s decision to deny the casinos’ injunction request does not close the case, it represents an important win for the Pennsylvania Lottery and means that its games are safe for now. The agency expected to generate a profit of about $31 million from its new online product. It fell slightly short of those projections, but pointed out that the launch of the online games was an important step toward increasing proceeds amid growing demand for senior citizen services that it supports.
If the seven casinos continue to pursue injunction, the Commonwealth Court Judge set an August 30 deadline for the exchange of further relevant evidence in the case, expert reports, and the filing of pre-trial motions.
Judge Cohn Jubelirer issued her ruling right ahead of the start of a three-day test of Parx Casino and Hollywood Casino’s online casinos in Monday. If the Pennsylvania Gaming Control Board does not spot any irregularities during the test period, the two casinos will be able to officially launch their iGaming operations and mark the beginning of regulated online casino gambling in the state.
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