If PA Expands Gambling, What Does It Mean For Atlantic City And NJ?

[toc]Pennsylvania’s legislature is currently in the middle of authorizing what could be a massive expansion of gambling in the state.

What, if any, impact will that have on Atlantic City and New Jersey?

Downplaying the impact on AC

The biggest potential changes to Pennsylvania gaming law, as legislation is currently written, are:

  • Regulation of online gambling
  • Video gaming terminals in taverns across the state
  • Tablet gaming in airports

While some in the Garden State are worried what all this might mean for the NJ casino industry, the Press of AC downplayed those concerns:

“One of the biggest take aways is that it’s not a done deal,” said Colin Mansfield, director of US corporates at Fitch Ratings. “The risk is to the current operators in the state. The Atlantic City market took a hit when Pennsylvania first introduced casino gaming but I don’t see this being that big an impact.”

The bottom line is that any changes in PA likely don’t affect AC’s rebound.

PA and NJ online gambling

The biggest change, by far, would be the legalization of online gambling, if PA goes down that path. (So far, both the PA House and Senate have approved iGaming, but they disagree on how to do it.)

There are already legal NJ online casinos, of course. Would PA legalizing iGaming affect NJ? Not really.

In order to take part in regulated online gambling in any state, you have to be located in that state. There’s no reason for New Jersey players to cross the border to play at online casinos across the border, if PA legalizes them.

If anything, Pennsylvania representatives a positive opportunity for New Jersey. New Jersey could theoretically enter into a compact with Pennsylvania for online poker, in which they would share players across state lines. That would result in larger prize pools for tournaments and more tables running at online poker sites in both states.

Such a compact would appear to be a no-brainer. But NJ, so far, has avoided compacting with Nevada and Delaware for online poker.

Also of note: One PA casino — SugarHouse — already offers real-money online gambling in New Jersey.

Gaming in taverns?

Pennsylvania could install up to 40,000 legal video gaming terminals, or VGTs, around the state. These would not be placed in casinos, but instead in private establishments.

This is not likely to impact New Jersey in a major way, either. New Jersey residents close to the PA border can already reach a variety of casinos fairly easily (three in the Philadelphia area, one in Bethlehem.) The legalization of casino gaming in PA a decade ago — and in other states like New York and Maryland — was a much bigger deal for AC.

The taverns are also not going to be destination for NJ residents; each venue will likely just have a handful of VGTs. While some NJ residents may take their gaming dollars to those VGTs, it’s likely at the expense of a PA casino, not an AC casino.

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Still, NJ might be wise to expand gaming

New Jersey has thought about the idea of expanding gaming outside of AC in recent years, although a referendum to add two casinos in North Jersey failed badly.

The state wants to protect AC from further competition. But more competition is coming from outside of the state all the time, even if the PA expansion doesn’t hurt New Jersey’s bottom line.

It likely won’t be long till there are more casinos closer to New Jersey — particularly in New York. Will New Jersey continue to stand pat as states around them continue to expand? Right now it looks like it will. But that might not be the best bet for the future of the state’s casino industry.

About the Author

Dustin Gouker

Aside from his role as editor at LegalSportsReport.com, Dustin Gouker writes extensively about the legal online gaming and US online poker industries, having played poker recreationally for his entire adult life. He has also covered sports for The Washington Post and the D.C. Examiner, among others.