How PA Casinos Could Create a Compact with Other States

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There’s no doubt that Pennsylvania is one of the biggest and brightest iGaming markets in the US, while the state has also blazed a trail for others to follow within this space.

You can find the best PA online casino sites ranked at Casinos.us, and as this number continues to grow, punters in the region can continue to benefit from an increasingly competitive and well-regulated space.

Recently, the prospect of PA creating a compact with other US states has been raised, but just how viable is this proposition? We’ll explore it in more detail below.

 The Case for Creating an iGaming Compact

 The Supreme Court decision to strike down the PAPSA legislation in May 2018 (which had previously prohibited sports betting at a federal level), has caused a national rush to market, with more than 20 states having now moved to legalise and regulate sports betting within their boundaries.

The landscape is slightly different in the virtual casino and iGaming space, however, as while New Jersey first legalised online casino gameplay back in 2012, just four US states have since followed suit.

In addition to NJ, Michigan, Pennsylvania, West Virginia and Delaware are the only states to offer interactive table games, slots and poker. While Nevada only offers online poker to its subjects, the state has no immediate plans to legalise more verticals in the near or medium-term.

This has created a marketplace with a relatively fixed ceiling, with the potential to grow further impacted negatively by the failure of states such as New York, California and Florida to successfully push through iGaming legislation.

However, an alternative way to grow this burgeoning market lies in the form of interstate online gambling compacts, which will create formal legal frameworks in which progressive markets can share pools and valuable technological assets.

 Such pacts could include any number of the aforementioned states, but one particularly viable interstate compact could be formed between Pennsylvania and Michigan.

According to Pokerfuse, state regulators in both jurisdictions have expressed interest in creating or joining such a compact, although such talks are at an incredibly early stage and are in no way formal in nature.

Addressing The Wire Act – The Elephant in the Room

 The question that remains is why have the five aforementioned states failed to agree on any sort of compact so far?

The answer lies in the form of The Wire Act, which was initially passed in 1961 to prevent interstate wagers being placed over the telephone. The vague wording and scope of the legislation left a great deal of room for interpretation, with this widely used to discourage interstate casino gameplay and sports betting from the outset of the digital age.

However, December 2011 saw the Department of Justice (DoJ) release a formal opinion stating that “interstate transmissions of wire communications that do not relate to a ‘sporting event or contest’ fall outside the reach of the Wire Act.”

While the states of NJ and Delaware subsequently entered into talks over a lucrative iGaming compact, little was achieved before a new DoJ reversed the previous 2011 opinion in 2018. More specifically, this opined that The Wire Act’s provisions are “not uniformly limited to gambling on sporting events or contests.”

A significant legal challenge involving more than two dozen Attorney Generals has followed since, with the DoJO subsequently losing the ensuing battle as it was forced to acknowledge that the legislation only applies to sports betting.

While this decision itself is also being challenged in the courts, it’s likely that the initial, 2011 DoJ opinions will be formally upheld. This would definitively pave the way for lucrative and varied iGaming compacts in the near-term, with PA and Michigan well-placed to lead this charge.

However, any parties interested in entering into agreements would have to wait until a formal decision is delivered on The Wire Act, with this legal battle having the potential to rise all the way to the Supreme Court. At present, the Lawful Internet Gaming Act in Michigan (and similar states) demands interstate agreements to be in line with both “federal and state” laws, so there’s a clear waiting game to be played for the time being.

The Last Word

 With this in mind, there should be no doubt that both of these states in particular are biding their time and preparing for the creation of such an interstate pact.

To this end, Michigan governor Gretchen Whitmer signed the SB 991 legislation into law in March of this year, with this effectively empowering the Michigan Gambling Control Board (MGCB) to enter freely into interstate compacts in the future.

If interstate pacts can be agreed at some point in time, there would undoubtedly be significant benefits for both local authorities and the national economy as a whole. This is therefore an exciting space to watch, especially for those in states who have already legalised iGaming activity.

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