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US Casinos Mull Cross-Border Operations

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US Casinos Mull Cross-Border Operations

Casinos in the US state of Pennsylvania (PA) have used up 28 of the available 39 interactive gambling permits during two recent application periods. The 11 permits now remaining for the state represent tens of millions of dollars in potential revenues.

With numerous land-based licensees also avoiding establishing a digital presence, the PA Gaming Control Board has made the remaining unclaimed gaming permits available to any qualified gaming entities that do not have a current presence in the state.

A mere two applicants stepped forward for these permits before the application deadline on October 31: Golden Nugget Casino and MGM. Unsurprisingly, both of these brands have heavy involvement in the neighbouring online casino market of New Jersey, a state that has enjoyed considerably iGaming market growth since it launched it a few quarters back.

Supporting Regional Diversification

This trend seems to be moving in the opposite direction, too. As their state of origin moves towards the launch of online gambling and sports betting, a number of PA casinos have already begin to target NJ’s market. The goal here is to boost their reach and presence, and to strategically position themselves for a possible national wave of legalization, should it become a reality.

According to UNLV Center for Gaming Research Director David Schwartz, regional diversification is a strong strategy, particularly when it comes to online markets. In this industry, he said, convenience is a huge factor, so the ability to wager at home rather than travelling across state borders is a huge advantage for players. In this case, being licensed in multiple jurisdictions makes a lot of sense, Schwartz believes.

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Following in SugarHouse’s Steps

This holds true particularly when a bridge links the jurisdictions in question. Rush Street Interactive launched its SugarHouse online casino platform in 2016 under the license held by Golden Nugget, and more recently, launched one of NJ’s earliest online sports betting platforms in partnership with Monmouth Park as well. Based on the results of these launches, the firm made a sound decision indeed.

According to estimates from Eilers and Krejcik Gaming, SugarHouse now holds an 8% share of the thriving NJ iGaming market. That’s second best among brands that are not native to the state, behind only betting giant Betfair. SugarHouse’s revenues have even surpassed those of Caesars and Harrah’s.

Operators in either PA or NJ now have two paths across the border. Pending regulatory approval, iGaming licensees can enter into deals with outside entities as well, following SugarHouse and Golden Nugget’s leads. And while Pennsylvania’s restrictions on such partnerships are still quite rigorous for now, the state may relax its stance on such matters should those operators brave enough to enter into joint deals continue to experience success.

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