Nine of 13 Pennsylvania casinos applied for licenses to offer interactive online betting by Monday's deadline, guaranteeing at least one big winner from iGaming: The state treasury.

The state Gaming Control Board announced Tuesday that most of the state's casinos, including all the facilities in the Philadelphia area, applied to pay $10 million each for the interactive licenses, permitted under the state gaming law passed last year.

If all nine petitions are approved, the license fees would generate $90 million for Pennsylvania's treasury, exceeding the Independent Fiscal Office's estimate that the issuance of iGaming certificates would generate $54 million this year.

The licenses allow the casinos to offer three types of iGaming options: peer-to-peer poker games; online slot machines and casino table games, such as blackjack.

The robust demand for online gaming licenses is likely to complicate efforts of casinos to push back on Pennsylvania's stiff license fee and taxes on sports betting, which critics say will impede the rollout of sports wagering. So far no casinos have applied for sports-betting licenses.

Pennsylvania politicians "will no doubt read the strength of online license sales as evidence that the industry is crying wolf on sports betting," Las Vegas gaming consultant Eilers & Krejcik said in a newsletter Tuesday.

Six casinos applied for iGaming licenses on Monday: Sands Casino Resort Bethlehem; Hollywood Casino at Penn National Race Course; Valley Forge Casino Resort; Harrah's Philadelphia Casino & Racetrack; Rivers Casino in Pittsburgh; and SugarHouse Casino in Fishtown.

Three casinos applied last week: Parx in Bensalem, Mount Airy in the Poconos, and the yet-to-be-built Stadium Casino in South Philadelphia.

Online poker being played in New Jersey.
Wayne Parry
Online poker being played in New Jersey.

The gaming board has 90 days to approve the licenses. The fees are due 60 days after approval.

The revenue from the $10 million license fees does not include the tax that the state collects on internet wagering: Pennsylvania's new state law sets the tax rate for internet poker games and online table games at 16 percent of the casino's win, and 54 percent for online slots. The tax rates include 2 percent allotted to local governments that host casinos.

The state's 13 casino license holders had until Monday to apply for the licenses for all three categories of internet games.

Four casinos did not apply for iGaming licenses: Lady Luck Casino Nemacolin; Meadows Racetrack and Casino in Washington, Mohegan Sun Pocono; and Presque Isle Downs & Casino in Erie. The four casinos have the option to apply until Aug. 14 for licenses for any individual interactive gaming categories at a cost of $4 million per license.

If any of the licenses are unsold after Aug. 14, the Gaming Control Board could offer them to qualified operators that do not have casino licenses.

Several gaming experts expect the poker licenses to attract less demand since the market for Internet poker supports fewer gaming operators. Online poker has lagged other forms of interactive wagering in New Jersey, which launched online gaming in 2013.

The four casinos that did not apply for the package of licenses are likely to snap up individual licenses for slots and table games this month, but turn up their noses up at the less attractive poker licenses, Eilers & Krejcik said in its newsletter. The consultant also expects most casinos that won poker licenses to let them go unused "for the foreseeable future."

Online gambling was legalized in Pennsylvania under broad gaming legislation passed in 2017. Bettors must be using electronic devices located within the state to participate.

The Pennsylvania Lottery in May launched iLottery, allowing Internet users to wager with digital scratch-off tickets, but the casinos have raised objections about the state-run enterprise, saying the Lottery’s online options illegally simulate casino games.

The internet is the next frontier for gaming, from the perspective of taxing authorities.

In New Jersey casino revenue from digital games doubled from 2014 to 2017, reaching $245.6 million. Digital offerings account for 9 percent of New Jersey casino revenue, but since they are taxed at a higher rate than casino winnings (15 percent vs. 8 percent), they last year accounted for $36.9 million, or 17 percent, of New Jersey's $211.6 million in tax revenue from gambling.