All American Poker Network Exec David Licht Speaks before Pennsylvania House Committee
David Licht, an executive with the All-American Poker Network, told the Pennsylvania State House Gaming Oversight Committee that online gambling is already available in Pennsylvania. Mr. Licht pointed out that illegal, unlicensed websites already accept Pennsylvania players.
Licht suggested there are a couple of major differences between the unlicensed Pennsylvania sites and those operating in a regulated market. One, none of the revenues generated by those sites are collected by the state, so money which could be used to fund schools or build roads is going to illegal operators. Two, the Pennsylvania residents who choose to gamble at the offshore online casinos and poker sites are unprotected.
Online Gambling Already Happens in Penn
The AAPN executive said, “Unregulated online gaming is going on in front of us right now. The issue is not will we legalize it, it is will we protect customers and derive revenue from it.”
Licht, who was one of several experts who spoke before the committee, was making a case for his company’s inclusion in an any legal gambling industry in the state. He discussed the measures used to keep minors from gambling online, including technological innovations and player verification methods. Licht also spoke about the capping bid which could be implemented on license websites, keeping gamblers from losing above a certain amount of cash. No such safeguards exist on the unregulated sites.
Touching on other safeguard measures used for problem gambling additions, Licht said that metrics exist in AAPN software which allows the company to screen for problem gamblers and full-fledged addicts. When certain measures are reached, players are excluded from products and services. Once again, online operators who are not licensed have no such protections for gamblers and their families.
Cannibalization of Land Casinos
The executive also addressed questions about market cannibalization. Supporters of the land-based casinos and racinos of Pennsylvania argue that legal online gambling would hurt the brick-and-mortar business. Mr. Licht said that 80% of customers to an online website are not land-based visitors. These people either live in a remote portion of the state or they have no interest in leaving the confines of their homes for betting purposes.
Thus, the state should be able to generate revenues without harming jobs and bottom lines among the established gaming market. In fact, the other states which have legalized online gambling have only allowed land-based operations to obtain Internet casinos and card rooms. Most of the time, those companies partner with one of the established gaming software companies or gaming brands, but the license holder obviously holds the hammer in that relationship.
New Jersey Numbers Projected
Projecting the numbers from New Jersey in its first year after the online gambling rollout, Licht suggested Pennsyvlania would have a larger rake, if it legalized online casinos. New Jersey collected nearly $140 million in gaming revenues in 2014. That happened despite a number of issues which probably would not exist in the Pennsylvania market. For one, the geolocation software was spotty at first, so some players from New Jersey registered in the system as being from New York or Pennsylvania.
Credit card payments remain a problem in Jersey, though the state has seen some improvements with a dedicated banking code for various types of gambling. The exclusion of PokerStars has been a hindrance to growth in the online poker market, because poker rooms need large communities to thrive. In all, New Jersey casinos was able to generate $140,000,000, with a significant portion of that money going to the state.
While some of the issues would exist in Pennsylvania, everyone agrees that the state would have a bigger revenue production. Pennsylvania has 45% more residents than New Jersey, so one would expect 45% more revenue–over $200 million.
Given that the poker sites would have more gaming options and bigger prize pools, one would expect the Pennsylvania online poker industry to produce an even bigger rake per resident than New Jersey.
Dueling Bills in the Senate
The Pennsylvania legislature has three dueling bills which would legalize online gambling: one each sponsored by Rep. John Payne, Nick Miccarelli, and Tina Davis. Two of those three bills *by Payne and Davis) would legalize both online casinos and poker rooms. One of the bills (Miccarelli’s) would license online poker, but not online casinos. Such an option would severely limit the revenues generated, so Licht suggested that would be a bad idea.
AAPN is licensed to operate in the New Jersey gaming market. The company produces software which helps with privacy safeguards, child safety protections, and verification tech. While David Licht’s appearance before the committee served his own interests, the basic premise of the information he provided is not disputed by anyone but those who wish to spread fear and misinformation.
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