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Covid-19 Puts Penn National Gaming Operations on Hold

As the spread of Covid-19 forces businesses to close throughout the country, Penn National Gaming finds themselves not only closing their doors but also halting all future projects. The rapidly spreading pandemic has forced businesses across the globe to close for the foreseeable future, and tourism and casino businesses appear to be taking the hardest hit. As Penn National operations come screeching to a halt, their stock continues to plummet, and the future of their operations hang in the balance. Now, the company is looking to rely on credit or a potential stimulus package to help them in these trying times.

Immediate Impact

Penn National has been forced to suspend operation at all of their Nevada locations, including Tropicana Las Vegas, The M Resort, and Cactus Petes for at least 30 days; with the rate at which Covid-19 is spreading, it is possible that these locations could be closed for even longer. The closure of these Nevada locations will immediately impact the 3,200 employees who work there. Throughout the entire country, Penn National has closed 34 total properties. The closures are the result of mandatory orders from various state governors who have called for the suspension of all nonessential businesses to help stop the spread of the virus. In the month of March in 2019 Penn National brought in more than $46.9 million from just two casinos in the state of Pennsylvania. Now the company is thinking of ways to combat this loss of revenue for the month of March in 2020.

The closing of nonessential businesses has also forced Penn National to stop construction on two casino projects in Pennsylvania. The $110 million Hollywood Casino Morgantown and $120 million Hollywood Casino York were both slated to open by the end of 2020, but now their future is in question amidst work-stoppages related to Covid-19. After a record-breaking month in the stock market in February, Penn National has since seen an 80% drop in shares, dropping nearly 45% in a single day last Monday.

President and CEO of Penn National Gaming, Jay Snowden, has stated his support of Pennsylvania governor Tom Wolf’s decision to close nonessential businesses in the state. Along the same lines, he recognizes that under these circumstances it is necessary for Penn National to do what they can to keep themselves from going under in dire circumstances.

Plan for Recovery

In the immediate future, Penn National is planning to fall back on a $430 million credit. It’s unclear how they plan to use this credit, and company officials have stated that the fluid circumstances of the ever-evolving pandemic make it difficult to determine exactly the best use for their existing funds. The immediate concern is the thousands of workers who are suddenly finding themselves without work, and the absence of millions of dollars in revenue for the foreseeable future.

The effects of these closures have impacted casinos and gaming companies throughout the country, as more and more businesses are forced into these unexpected closures. The entire industry has seen a 51.3% decline in stocks, as millions are left without work and millions of dollars in revenue is being lost. The American Gaming Association, who bears the responsibility of representing casinos throughout the country, has called for a stimulus package that could help save the industry. In a statement to the U.S. government, the AGA noted the obvious impact that the pandemic has had on these businesses.

Like many other people throughout the world, Penn National will have to wait and see what the future holds for their business and its employees, as the circumstances surrounding Covid-19 continue to evolve.

IGT and Twin River Partnership in Question

In January, Twin River Worldwide Holdings Inc. and International Gaming Technology (IGT) reached an agreement to embark on a joint-venture to pursue a 20-year contract for the state’s lottery and gambling rights. The deal would also expand and renovate the Twin River’s Lincoln casino, as well as a 12,000 square-foot Twin River headquarters in Providence, Rhode Island. The two entities were previously at odds over IGT’s ongoing attempts to lock down a 20-year contract extension that would have given them the right to the majority of Rhode Island’s slot machine needs. Now, it appears they were able to set aside their differences, giving IGT the opportunity to dominate slot machine offerings under their partnership. The proposed deal has now reached the desk of lawmakers and state gambling regulators, who have asked the two companies to defend their joint venture.

IGT’s Stronghold on Rhode Island

IGT is one of the leading slots providers around the world, offering machines for brick-and-mortar casinos, as well as online slots. Prior to their latest dealings with Twin River, IGT was responsible for providing about half of the nearly 5,000 slot machines in operation at the two gambling facilities in Rhode Island. The 20-year contract that was in dispute, would give them an even stronger command over the gaming industry in the state, and the resolution of this dispute suggests that IGT is inching closer to their goal.

If the proposed deal is accepted by lawmakers, IGT would emerge as a 60 percent shareholder of the new company, leaving Twin River with only a 40 percent stake. A new contract could grant IGT the right to provide and collect revenue on 85 percent of the video slots offered in the state. Previously Twin River was the only threat for a competing bid at the new contract, and now those tensions, it would appear, have subsided.

Details of the Partnership

The proposed partnership and legislation include exclusive management of 100 percent of video slot machines by IGT and Twin River. Under this deal, the companies would pay the state $25 million over two years for the lottery and gambling contract. Additionally, it is expected that IGT would be investing around $150 million for this project, in addition to the $100 million being used to renovate the Twin River Lincoln Casino. The new deal also guarantees to keep the 1,100 casino-related jobs in Rhode island, which will help generate the projected $300 million a year from slots and other casino games. The two companies believe that this partnership presents Rhode Island with the opportunity to increase gaming competitiveness with neighboring states like Massachusetts and Connecticut.

Criticism from Lawmakers

While officials have applauded IGT and Twin River for providing the state’s third-largest source of revenue, there are still a number of lingering questions that need to be addressed. There had been many concerns surrounding the length of the contract, especially before the joint venture was proposed. Initially, Twin River was adamant about encouraging competition and blocking 20-year contracts. Under their new partnership, they are included in the 20-year contract, and appear to be changing their tune.

The $25 million over two years for the lottery contract is the same amount that IGT proposed last year. That proposal was shot down and opposed by Twin River. A year later, under their new partnership, Twin River seems to feel that this is an appropriate amount. Director of Revenue, Marc Furcolo, disagrees, citing the fact that the latest proposal is for two exclusive licenses instead of one. In his eyes, the committee should thus expect more payment up front.

Many officials continue to question the length of the contract, pointing out that Rhode Island would be forced pay a premium while leasing slot machines from IGT for the next 20 years, rather than owning them outright. Republican House candidate Steven Frias suggested the deal should be for 10 years, at most. The new deal eliminates any opportunity for a competitive bid for lottery and gambling rights. According to Frias, in order to compete with neighboring states, Rhode Island should avoid locking themselves into a long-term deal like this.

The deal has done a lot to progress discussions about the future of gambling within the state, but many questions remain to be answered. Legislators will have to review the deal more closely before allowing IGT and Twin River to take over slot offerings for the next 20 years.

“Malfunctioning” Slots Deny Woman $8.5 Million Jackpot

Last Friday, a woman in Newcastle Oklahoma claimed she won $8.5 million on a slot machine at the Newcastle Casino. Maribel Sanchez thought she hit the spin of a lifetime, but the only problem was that the casino denied the fact that she hit the jackpot. Newcastle Casino is claiming that Sanchez’s lucky spin is actually a result of a malfunctioning machine, not a true jackpot. Sanchez, of course, is furious and hopes that the casino will make right by paying her the jackpot she feels is rightfully hers.

Lucky Day?

Sanchez woke up Friday morning hoping to have some fun playing slots at Newcastle Casino, and it certainly seemed like that would be the case. After a few spins on the Liberty 7s slot machine, Sanchez hit the jackpot. According to reports, the machine started to act up before shutting off and going black. When it turned back on, it projected the last amount won: $8,469,498.95. Sanchez, allegedly, was able to snap a picture of the display on the machine showing her winnings.

The big win didn’t fail to catch the attention of casino officials, who have yet to pay out Sanchez’s jackpot. Sanchez has since sought legal counsel in hopes of pursuing her options for claiming her winnings.

Taking a Look at the Fine Print

Newcastle Casino is blaming a “malfunction” for the enormous jackpot, claiming that Sanchez didn’t win the prize. A jackpot of this size is unprecedented for the Lucky 7s machine at Newcastle Casino, and some questions were raised about whether or not a jackpot of this size is even possible, given the machine’s regulated odds and payouts. State laws generally offer specific regulations on what expected odds and payouts should be for each machine in a casino, ensuring that players are guaranteed a substantial chance at winning. These regulations mean that each machine should have set odds and payout rates, making it easy for the casino and state officials to identify any potential issues with the machine. Local media reached out to the casino to find out what the maximum payout for this machine was, but the casino offered no comment.

While the casino did not specify the maximum payout for the machine, they did offer some clarification about whether or not they felt the machine malfunctioned. Newcastle Casino made it clear that the game in question is a Class 2 game under state law. Class 2 games within the state determine a winner through a bingo pattern, unless a malfunction occurs. In this case, they feel that a malfunction did occur, thus voiding the payout. The casino plans to follow the appropriate legal procedures to handle Sanchez’s claim.

Malfunctioning Machines Throughout the US

Sanchez, unfortunately, is not the first person to fall victim to this type of scenario. In fact, Sanchez’s $8.5 million jackpot pales in comparison to the $43 million a woman claimed to have won in Queens, New York back in 2016. The woman took a selfie with the screen showing her total winnings, but the New York State Gaming Commission responded saying her machine malfunctioned. A spokesperson from the casino reported that the slot machine the woman was playing on only had a maximum payout of $6,500, and in the end the woman was only offered a steak dinner.

The slot machine in Newcastle Casino was one of three reported issues related to malfunctioning machines in the past week. In Louisiana, the Jena Choctaw Pines Casino had to shut down 300 of their 710 machines due to communication issues with the servers. Encore Boston Harbor also reported issues with their machines, related to their slot ticket system. Fortunately for the customers at Encore Boston Harbor, their jackpots were hand-paid, and the casino agreed to pay all winners.

Sanchez’s winnings still hang in the balance, but she and her lawyer continue to explore legal options, while Newcastle Casino continues to take a closer look at what caused the machine’s malfunction.

Hard Rock Atlantic City Launches Live Online Slots

Hard Rock Hotel & Casino of Atlantic City is claiming the title of world’s first live online slots, but what exactly does that mean? Over the years, slot machines have evolved from traditional lever-style machines, adding buttons to make gambling even simpler. Over time, new laws and the development of online casinos have made it even easier for gamblers to play on their computers or mobile devices. Hard Rock’s latest venture adds a new dimension to this type of slot play, offering players the option to bet on real-life slot machines without ever laying a hand on them.

The Old Dog’s New Trick

On Monday, Atlantic City’s Hard Rock Hotel & Casino unveiled slot machines that operate within their building but are dedicated entirely to online gamblers. The 12 slot machines are the result of a collaboration between and Softweave Ltd., an Israeli-based internet gaming company. The new project is said to be the first to offer live online slots anywhere in the world. The machines were introduced during a news conference on Monday morning, and gamblers were able to use the machines shortly after the announcement.

Joe Lupo, president of Hard Rock Hotel & Casino of Atlantic City, praised the new project as “ground-breaking” for the budding online gaming industry throughout the state of New Jersey. Additional online options, such as the new online slots, bridges the gap between online gamblers and the brick-and mortar casino, potentially enticing them to stop in and play in person. The new live slots also open the door for new players who may not be able to get to the casino in person but are hesitant to try online gambling.

The live online slot room is located directly across from the Fresh Harvest Buffet and has a wall with key-shaped windows to allow guests a view of the action. In the room there are 12 slot machines, including five popular games: Leprocoins; Buffalo; SpitFire Multipliers; Hotter than Blaze; and 3x4x4x Double Times Pay.

How Live Slots Work

Live slots operate similarly to online live dealer card games. The live slots are physical machines that exist within the casino that online gamblers can view through cameras positioned in front of the machines. Any players with a valid internet gambling account with Hard Rock can access the new machines through the casino’s online gambling website. As it stands, there are only 12 existing live online slot machines; if they are full, players must join a queue and wait for one to become available.

Other than the fact that players access the slots online, there are no differences between these machines and their casino-floor counterparts. The machines use a random number generator to produce the outcome of each wager. The new live online slot machines go through the same state gambling regulations that other machines go through, in order to ensure their integrity.

Why Live Slots?

Kresimir Spajic, senior vice president of online gaming at Hard Rock International, believes that the live online slots offer a smooth transition for players who may be reluctant to try online gaming. The physical machine offers them a familiar looking device that they can now play online. Another upside to the new live online slots is the fact that players can enjoy popular slot machines that were previously unavailable through online platforms, leaving players no reason to avoid trying the easily accessible live online slots.

Since New Jersey legalized online gaming in 2013, the state has rolled out a number of programs to entice new players. One successful example would be the implementation of live dealer card games, which give players the opportunity to play casino-style card games with a live dealer through the use of video and online gambling platforms. Spajic believes that live online slots are the next logical step for the online gaming industry, which he said has been “lacking innovation.”

24-Hour Slots Raise Questions in Alberta

In the province of Alberta, Canada, casinos have been unplugging their slots between 3am and 10 am every day. That’s all about to change, as the Alberta Gaming Liquor and Cannabis (AGLC) regulatory body lifts the ban and allows for 24-hour slots. The decision reflects recent regulatory changes made within the province, giving the casino operators the option to try and capitalize on the increased gaming time if they choose to do so. The sudden change comes in hopes of benefiting businesses but has not avoided speculation from groups who think the decision could be harmful to some.

Reasons for the Change

Heather Holman, spokeswoman for the AGLC, stated that the motion to allow 24-hour slots came from casino operators interested in using the additional slot time to support their business. While many provinces in Canada have already established a local online monopoly, Alberta still chooses to offer gambling on its well-established brick-and-mortar operations. There are 27 land-based casinos within the province that could capitalize on these new regulatory changes, while the possibility of an online gambling launch looms on the horizon.

As it stands, a number of casinos already operate 24 hours a day, offering 24-hour poker tables and other casino-style games. The AGLC will also continue to allow the sale of liquor between 10 am and 2 am, as well consumption until 3 am. As it stands, there is no timeline for when the new regulations for slots could go into effect. The belief is that this change could help counteract any future online gambling expansion that could take business away from brick-and-mortar locations

Concerns Surrounding 24-hour Slots

Many believe that the increased accessibility of slots poses a significant threat to gamblers in the form of potential addictive behaviors. Slots in particular offer instant results with very little time in between each opportunity to place a new bet. Gamblers can easily sit down at a slot machine and continuously place bet after bet, accumulating small or large wins and losses. The ability to sit down and pull a lever makes slots potentially more dangerous than a game like poker, which requires constant decision making about the game and the amount of money being wagered.

Some professionals have spoken out against the recent changes, claiming that they could indicate a slippery slope for the future of gambling and citizens interested in taking advantage of the new gaming opportunities. Ray Reshke, executive director of the Problem Gambling Resources Network (PGRN), sees the new regulations as an opportunity for casinos to take advantage of the AGLC and citizens alike. As the AGLC loosens regulations on the hours of operation for slots, Reshke believes casinos could push for them to do the same for other areas of gambling as well. Reshke claims that PGRN was unaware of the changes until after they had officially been made.

David Hodgins, a psychology professor at the University of Calgary, offered his opinion on the potential threat to gamblers as well. Hodgins believes that former regulations on slot operation times forces gamblers to take a break from gambling, giving them the time they need to realize the consequences of their wins and losses. Forcing gamblers to take breaks gives them the ability to regain control before falling victim to addictive gambling behaviors.

The Final Say

In response to backlash against the new regulations, Holman stated that the intentions of the AGLC are to find ways to support player wellness while offering a variety of gaming entertainment options. In this case, that means allowing casino operators the opportunity to offer 24-hour slots. As it stands, the AGLC sees no reason to backtrack on their decision to allow 24-hour slots in the province’s land-based casinos.

Pamunkey Tribe Planning to Build Richmond Casino

The Pamunkey Indian Tribe announced their attentions to build a new $350 million casino and resort in Richmond, Virginia, last week. The tribe has already acquired a significant amount of property within the city in order to begin construction on the planned facilities. However, the tribe could face significant roadblock: the state of Virginia has yet to legalize commercial gambling. Now the tribe is hoping to get their project approved by city officials, thanks to their status under the Indian Gaming Regulatory Act.

History of Gambling in Virginia

Bettors in the state of Virginia have virtually no option when it comes to gambling on slots or casino games. Those interested in placing wagers must travel to brick-and-mortar locations in neighboring states, and they can do so through a number of services provided in the state to help them travel by bus to these casinos. As it stands, the state is losing potential gambling revenues to these neighboring states, and the Pamunkey tribe sees an opportunity to capitalize on these potential revenues.

There are some forms of regulated gambling in Virginia, however these options leave a lot to be desired for anyone who is looking to play slots or a hand of poker. At age 18, Virginia residents can choose to play the lottery, daily fantasy sports, bingo at a regulated bingo hall, or they can visit a horse racing track to bet on their favorite horses. Aside from these options, the state of the Virginia has very strict rules against any of the games that would be offered at the proposed Richmond Casino.

In many states throughout the country, Native American tribes are given the opportunity to legally operate casinos and other gaming facilities under the Indian Gaming Regulatory Act. Under the act, Native American Tribes are free to conduct gaming on Indian Lands, meaning the Pamunkey Tribe may not need to wait for the passing of new bill to launch their new project.

Do the Pamunkeys Have a Right to Operate a Casino?

The Pamunkey Tribe received federal recognition from the U.S. Bureau of Indian Affairs in 2015 and have since made clear their intentions to establish gaming operations through brick-and-mortar casinos. Their first proposed project in Norfolk was met with opposition when another tribe challenged their right to the land for the new casino. For the Richmond proposed project, the tribe has already acquired 49 acres of property in Richmond’s industrial Southside, and it appears that this time they will not be met with opposition.

With the challenge to their right to the land in Norfolk, the Pamunkey tribe can’t move forward with that proposed project unless the Virginia General Assembly passes a commercial gambling bill in the spring. In 2018, video horse-racing terminals that operate similarly to slot machines urged lawmakers to propose a bill that would grant five cities in the state, including Richmond, the right to allow commercial casino licenses. That bill could still pass this spring, when lawmakers vote on the issue at the end of the session on March 7. Either way, In Richmond, the Indian Gaming Regulatory Act gives the tribe the right to launch their latest project with the consent of city officials.

Details of the Project

The new casino resort in Richmond would include a 275-room hotel, a spa, a high-end restaurant, and a number of casino staples, such as slots and poker. Mock-ups of the project depict a tall glass building including balconies and a roof deck. Early estimates predict that the project could create 1,000 construction jobs and an additional 1,500 casino jobs. At the conclusion of construction, a temporary training facility for casino employees would be converted into a grocery store, health clinic, or community resource for the city.

The revenue from the Pamunkey casino would benefit the tribe members, rather than the Richmond community. The money generated would be used for increased access to health care, as well as education and cultural opportunities.

The tribe still needs the city to accept their proposal of the project, but there seems little reason for the city to block the new casino and resort. If the proposed casino bill is passed in the spring, then there will be nothing standing in the way between the Pamunkey Tribe and their two projects. In an attempt to gain support from the local community, the Pamunkey Tribe launched a Facebook page called “All in for Richmond Casino” and is asking fans to follow for updates.

Gaming Terminals in Missouri Raise Legal Concerns

Video gambling terminals have become readily available throughout the state of Missouri, making it easy for any resident to take a trip to their local convenience store to start betting. This ease of access has raised many questions about the regulation processes for these games and the potentially negative effects they have had on residents and businesses throughout the state. The Missouri Gaming Commission has ruled that the only legal slot machines are those that are offered in the state’s 13 brick-and-mortar casinos, suggesting that action be taken on to remove the gaming terminals that have popped up in other locations. On the heels of a number of informal complaints as well as lawsuits, state lawmakers are now hoping to provide clarification about the legality of these machines.

Operating Without Regulation

Unregulated gaming terminals, similar to the types of electronic slot machines that can be found in brick-and-mortar casinos, have popped up at gas stations, bars, and clubs throughout the state. The immediate convenience of these terminals gives residents access to gaming opportunities that they used to travel longer distances to play. By placing these gaming terminals in these convenient locations, gamblers have found it easier to travel a few minutes down the road to take their chances on the slot machine-style games, rather than to driving to a brick-and-mortar casino. Additionally, these games have become available to many residents who have never set foot inside a casino, encouraging new players to try their hand. The combination of these two things has created the perfect storm of concerns. 

The terminals operating outside of casinos in Missouri are doing so without the regulation of the Missouri Gaming Commission. This means that there are no rules governing acceptable payouts or acceptable odds. The chances of winning at these terminals can be less that the chances of winning at a casino, which is forced to adhere to certain guidelines deemed appropriate by state lawmakers. Without the proper regulations for the video terminals, there are no protections in place to prevent gambling addiction or provide resources to those who are addicted.

Research has shown that slot machines are one of the most addictive forms of gambling, due to the fact that bettors can see instantly whether or not they have won their bet, and then can immediately place another bet after seeing the result. This type of instant risk and reward makes it a prime concern for addictive gambling behaviors, and the lack of regulation on these gaming terminals throughout the state makes it all the more concerning. Additionally, some residents who have used these terminals expressed that they were completely unaware that these games were not being regulated, which could put them at risk for dangerous gambling behaviors.

Threat to Existing Gambling Operations

In addition to the concerns surrounding residents and gambling addiction, the new gaming terminals pose a significant threat to legal gambling operations in Missouri. Easy access terminals could be deterring residents who would otherwise be spending their money on the lottery or at established casinos that are adhering to the laws laid out by the state.
Both the lottery and the brick-and-mortar casinos in the state are responsible for paying taxes to various state programs. For example, casino slot machines are taxed on the earnings they make each year, and a portion of those earnings are dedicated to funding education. If residents are choosing to go to a local gas station instead of one of these casinos, then educational funding will suffer.

Casino slot machines are required to offer payouts of at least 80 percent. This regulation ensures that games are fair, and that players aren’t being taken advantage of. Players have generally a 1-in-4 chance at winning some of these slot games, but their gaming terminal counterparts are not held to these same standards since they are unregulated. This means that the companies operating these terminals could be taking advantage of players without providing any safeguard against gambling addiction.

Emerging Legal Issues

A civil suit filed in Crawford County is calling for the removal of machines owned by Torch Electronics, whose machines have contributed to all of the concerns surrounding what the Missouri Gaming Board has called illegal machines. Torch Electronics has not disclosed its payouts or whether it has put any significant programs in place to prevent gambling addiction or offer programs for treatment. What’s more, is that Torch Electronics has been linked with a number of high-powered lobbyists and political consultants, including Mike Parson, who received $20,000 from the company for his political campaign. These dealings do little to help ease concerns of residents and lawmakers.

Torch Electronics and other companies responsible for the operation of the alleged illegal gaming terminals argue that their machines are legal amusement devices because they require skill not chance in order to win. However, even if that is the case these machines must still face some form of regulation like their casino counterparts. Now these issues will be brought before lawmakers for the 2020 session on January 8.

Pennsylvania Mall to Open Mini Casino

On Wednesday, the Pennsylvania Gaming Control Board voted unanimously to give a “mini casino” license to Penn National in order to begin construction at York Galleria Mall. With the issuing of this license, the mini casino will become the third of its kind and will be replacing what was once a Sears department store. The announcement of the new casino is reflective of the larger trends throughout the state and nation in which retail department stores are declining, while retail and online gambling are rapidly expanding.

The addition of this new satellite casino was made possible through a gambling expansion that was passed in Pennsylvania back in 2017. Casinos throughout the state have placed bids on satellite facilities in hopes of capitalizing on the new law. Philadelphia-based Stadium Casino LLC just recently broke ground on a satellite casino in Western Pennsylvania at Westmoreland Mall called Live! Casino Pittsburgh. Penn National is also working on Hollywood Casino Morgantown in Berks County. The project at York Galleria Mall is the latest development in the growing interest in mini casinos.

What to Expect from the Mini Casino

The awarding of the license gives Penn National the ability to construct a Category 4 casino, which they earned through their bid of roughly $50 million in an auction that lasted only 60 seconds. The casino is being constructed in a repurposed 80,000 square foot retail facility and will be affiliated with the Hollywood Casino at Penn National Race Course. Penn National has stated its already invested nearly $120 million in the project.

Construction is already underway at what will be the Hollywood Casino York, and it is expected that the casino will open in the next 12 to 13 months. According to a press release issued by Casino City Times, Hollywood Casino York will operate on a single floor, offering 500 slot machines, 24 table games, a sports and race book, and a variety of dining and entertainment facilities. The slots will include both reel and video, ranging from penny to $100 denominations. The table games are set to include craps, blackjack, and roulette, while regular live entertainment is expected to be scheduled on Fridays and Saturdays. By law, the license gives Penn National the option of expanding to a maximum of 750 slot machines and 40 table games. The company has not expressed interest in doing so, but an expansion could come if the mini casino proves to be successful.

Local Reception to New Casino Project

The casino has met little opposition in a state that is already home to many brick-and-mortar casinos, and the new Penn National project will be welcomed with open arms in place of and abandoned department store. Residents of Springettsbury Township, home of the York Galleria Mall and the new casino, were given the opportunity to voice their opinions of the new deal at a public hearing last year. While there were concerns surrounding a potential increase in crime and drop in property values, the majority of people were in favor of the new casino.

The new Hollywood Casino York is expected to create 260 construction jobs over the course of the next year. After opening, the casino is expected to have the equivalent of 200 full time positions. In addition to the new employment opportunities the new casino is expected to generate $1 million in annual tax revenue of the local community.

Slot Machines or Skill Games: PA Commonwealth Ruling Adds to Confusion

Pace-O-Matic (POM) of Pennsylvania has been programming and manufacturing gaming devices for more than 44 years. In the past decade, however, their video game terminals, which have popped up in locations throughout the state, have raised questions about whether or not these machines should be considered illegal gambling devices. The deciding factor in the legality of POM’s machines, for years, has been their designation as Pennsylvania Skill games, rather than slot machines. A 2014 court ruling from the Beaver County Court of Common Pleas designated POM’s video game terminals as legal games of predominant skill, requiring players to use dexterity rather than chance to win. However, the Pennsylvania Commonwealth Court confirmed this week that the machines manufactured and distributed by POM are, by definition, “slot machines” under Pennsylvania law. Now opposing parties are adding their two cents about the ruling and what it could mean for POM’s operations throughout the state.

Details of the Ruling

The court decision focused on the POM terminals that can be found throughout the state in convenience stores, bars, and restaurants. Judge Patricia McCullough ruled that these machines do in fact fit the definition of slots as described in the Gaming Act. However, McCullough did not pass judgment in regard to whether or not POM was violating the Gaming Act. The court provided no conclusive decision on whether or not these machines could be classified as illegal gambling devices, citing the fact that the Gaming Act is not applicable to unlicensed slot machines. The court’s decision did nothing to help provide clarification on what should be done with the thousands of machines in operation, and thus opposing parties have interpreted the decision as they see fit.

Casinos in Opposition

Thomas C. Bonner, Group Vice President and Legal and Chief Counsel for Parx Casino, called for law enforcement to take action against what he has referred to illegal Pennsylvania Skill slot machines. In a press release, Bonner stated that Parx casino urges the Pennsylvania State Police, the Office of Attorney General, as well as police departments and District Attorneys across the state to bring an end to the POM gaming terminals. Parx believes that the new ruling, designating the games as slot machines, is grounds for officials to confiscate existing gaming terminals, as they are in violation of the law.

Bonner went as far to suggest that the machines operate in the same way that illegal casinos do, citing a number of issues associated with the safety and well-being of Pennsylvanians. Some of the largest concerns include the ease of access of these machines to minors who could be gambling illegally. Additionally, these machines are tapping into a market of consumers that would otherwise be spending their money on the state Lottery, which generates money for senior citizens. The press release stated that these machines could cause the state Lottery to lose millions of dollars, which would otherwise be benefiting these programs.

POM’s Defense

POM’s legal representative, Matt Haverstick, responded to the statement released by Parx, claiming that the court ruling was in fact a favorable one for POM. The ruling, although giving the video gaming terminals the label of “slot machines,” clearly stated that these games are not regulated by the Gaming Act. No decision about the legal status of the machines has been formally issued, suggesting that nothing has changed since the 2014 ruling other than the label associated with the machines. In regard to the concern surrounding the revenue generated from these games, POM’s Director of Communications Mike Barley expressed that the company is committed to working with legislature to tax and ensure the safety of customers using their terminals. Barley cited the jobs and the tax revenue that the company has generated in the past decade has been tens of millions of dollars.

From POM’s perspective, nothing about the gaming terminals has changed to shift their identity from skill games to illegal slot machines since the 2014 ruling. The machines require players to repeat patterns to maximize their scores and often include arcade-style shooting, which differs significantly from traditional slots. To prevent underage gambling, POM has employed a team of former state troopers to ensure the company is following a strict code of conduct. Despite their protests, POM has been victim to a number of raids upon their operations over the past decade throughout the state, and the latest court ruling has done little to quell their concerns.

What Does it all Mean?

POM has roughly 5,000 machines in operation across the state. As it stands, there appears to be no legal grounds for the confiscation of these machines, but the recent ruling has caused some confusion about that. Casinos appear to be concerned that these machines are infringing upon their business, while also endangering citizens. POM, however, is adamantly holding their ground and demonstrating how their skill-based games can operate freely, with no concern of violating the Gaming Act. For the time being, Judge McCullough’s ruling has done nothing more than change the designation of these machines from “Pennsylvania Skill” to “slot machines.”

Portsmouth Announces Casino Deal with Rush Street Gaming

On Monday, officials in Portsmouth Virginia announced a partnership with gaming industry leader Rush Street Gaming to launch a project that will introduce a new entertainment district to the city. The new entertainment district will be located just off the Tidewater Community College campus, and will be home to casino gaming, restaurants, and other entertainment attractions. Shortly after Monday’s announcement, the Portsmouth City Council voted unanimously in favor of moving ahead with the proposed development, with backing from the Portsmouth Economic Development Authority. Now officials are preparing to move forward with the project, but a number of challenges still remain; including the legalization of casino gaming within the state.

Industry Leaders

Portsmouth Mayor John L. Rowe touted Rush Street Gaming for their reputation throughout the gaming industry over the past 20 years. The Chicago-based company is responsible for the operation of full-service casinos, internet gaming, sports betting, and other entertainment venues throughout the country. One of Rush Street’s most notable achievements in the industry is the development and operation of its four destination casinos under the Rivers Casino brand. These casinos alone have created more than 6,000 new jobs, while also leading the industry in revenue generated in the Midwest and east coast. Rush Street Gaming’s casinos in Pittsburgh, Philadelphia, and Chicago have not only generated substantial revenue for these regions, they have also benefited the communities in which they operate.

Rush Street Gaming has already demonstrated a commitment to serving the citizens of Virginia with the development of the new entertainment district. In addition to expressing their interest in promoting the local community, the company has also shown a dedication to helping non-profit organizations. Portsmouth Economic Development Director Robert D. Moore stated that the goal for the new development is to hire 1,000 local workers, with an average salary of $50,000. In addition to new jobs, the company has promoted its community engagement program called “Rivers Gives,” which aims to empower local employees to support nonprofits in the area. The company is known for its spending at minority and women-owned businesses, which are common throughout the city of Portsmouth. Rush Gaming also believes there is opportunity to offer hospitality business education programs at the neighboring Tidewater Community College.

Legal Challenges

The opportunity to partner with prominent industry leaders is enticing, and the area chosen for the new entertainment district certainly suggests that the new casino could become a hot tourist destination. The site chosen for the new entertainment district and casino is located on Victory Boulevard and offers approximately 50 acres of land. Additionally, the site has a substantial amount of infrastructure already in place for the new development. The new area is slated to become a high interest tourist destination for the state, but first it must overcome a number of legal hurdles that stand in its way.

Some people may feel that the new deal between the city and Rush Street Gaming is an optimistic one, as Virginia waits to see whether or not SB 1126 will be passed in order to legalize the new casino. As it stands, brick-and-mortar casinos are not legal in the state of Virginia, but the newly proposed law aims to solve that issues. In late November, the Joint Legislative Audit and Review Commission will be releasing their findings about the review of casino gaming laws in other states, in order to determine if a gaming expansion in Virginia would be appropriate. The new laws must then be reviewed and adopted by the 2020 Session of the Virginia General Assembly, who would then enact the Code of Virginia amendments. At that point, the City of Portsmouth would hold a local referendum and citizens would have the opportunity to vote on the changes. Without the approval of city officials and citizens, the new deal could fall through and the casino would not be built. Under SB 1126, the Board is prohibited from issuing a license to operate a gaming facility before July 1, 2020. For now, the city will have to wait and see whether or not its deal with Rush Street Gaming can create the tourist destination they are looking for.