April 30, 2018 by

Does it Pay for a Land Based Casino to go Online?

Pennsylvania has made online gambling legal but casinos still has some hurdles to overcome before they can start advertising great casino bonuses for new online gamers.  First of all, the law stipulates that online casino gambling must go through existing land based casinos.  The casinos have to pay a large registration fee and must accept high tax rates on profits.

High Costs

The high registration fees have already made some land based casinos wary of entering the online market.  Adding a high tax rate to the registration fees makes the online market at least problematic for many land based casinos in the state.

Online Trending Higher

Secondly, all land based casinos are well aware of the fact that industry trends point to the advance of online gaming especially through a mobile gaming platform.  The evidence is almost self-evident: namely, that online gaming and mobile gaming are far more convenient, cheaper, and more accessible than land based casinos.

In many areas in the United States, there might be several land based casinos within two hours’ drive in any direction.  While two hours may seem small, they are still two hours one way and two hours back.  Many players are perfectly willing to eschew the palpably greater excitement that only a land based casino can generate in favor of not needing to travel to get there.

Extra Layers of Government

Third, the extra bureaucracy that will obtain for land based casinos running online casinos makes the online subsidiary less appealing.  This combines with the aforementioned trend toward online to put land based casinos into a quandary: they have to balance their potential for generating profit as strictly land based casinos with the potential for greater profits as also online casinos despite the fees, taxes, and inevitable bureaucratic hassles.

Partnering with Providers

Every online casino forms a partnership of sorts with one or more casino games provider.  The land based casinos also have business arrangements with providers but the online market has many more providers.  Land based casinos are actually not skilled at running online casinos.  Thus, the casinos that have already announced that they are preparing to jump into the online casino market in Pennsylvania are trying to learn how to operate an online casino “on the fly” so to speak.

The same would obtain if an online casino were suddenly be told that it could open a land based casino; the operations are so different even though the games are usually the same.

Some of the land based casinos that are questioning whether they will go into the online casino market are simply unsure of themselves at this point in the transition process.

Partnering with Established Casinos

Some well-established online casinos are actively pursuing partnerships with land based Pennsylvania casinos.  The established online casinos have the experience and know-how to help land based casino managers make the switch to running an online casino.

Once again, the land based casinos are in uncharted territory as they would rather not be dependent on established online casinos yet they need the great knowledge established online casinos possess.

Lady Luck Casino

One land based casino that has consistently said that it is still evaluating whether it will enter the online market is lady Luck.  The casino is in the news because it has once again said that it is not sure that it wants to redefine its business model to accommodate online casino gambling.

To be sure, Lady Luck is a land based casino but it is also a resort.  As a resort, it considers the casino gaming side of the resort as less important in a business sense than all the other amenities it offers as a resort. 

Lady Luck sits on 2000 acres.  It has world class hotel accommodations and restaurants plus two top grade golf courses.  It is one of the most family-oriented casino resorts in the entire United States.  The complex features a  zoo that it calls a Wildlife Center.  It has a Field Club that offer clay pigeon shooting, children’s activities, and fly fishing. In the cold months, you can warm up with an assortment of winter sports. 

The Adventure Center gives kids many opportunities to test themselves and have fun at the same time.  The complex has many other kids’ activities such as swimming pools. In addition to all sporting activities, the complex boasts an Arts Center with more than 3000 art pieces belonging to the Hardy family that has run the complex for generations.  Finally, vacationers have easy access to the Laurel Highlands southeast of Pittsburgh and only a three hour drive by the scenic route from Gettysburg.

This casino venue is still undecided if it wants to begin running an online casino.  The Hardy family may well decide to simply give the other land based casinos its share of the online casino market.  It reminds us of the advice given back in the mid-1960’s by Robert Townsend, then the new president of Avis Car Rental who said that every business needs to define exactly what it is.  In the case Of Avis, they defined themselves as renting cars without drivers which prompted them to sell off a limousine service.

In a similar manner, the Hardy family may define their business as a family-oriented resort with a casino on the premises but which has no room for an online casino.

Lessons Going Forward

The experience of all the land based casinos as they evaluate whether they want to become online casino operators demonstrates that the state of Pennsylvania has a long way to go before it reaps the expected benefits of legalized online gaming.