Judge Denies Injunction Request by Casinos Against Pennsylvania Lottery Over Online Games

Posted on: July 15, 2019, 05:41h. 

Last updated on: July 15, 2019, 05:41h.

The Pennsylvania Lottery scored a big win in the courts last Friday when a state judge refused to grant a temporary injunction on its online games sought by seven casinos in the state.

The Pennsylvania Lottery offers more than 40 online games, which award cash prizes to bettors in the state. Casinos have questioned the legality of some of the games.  (Image: Pennsylvania Lottery)

Initially, the casinos wanted all of the lottery’s online games shuttered because they felt they closely resembled the games they offer on their floors. However, they eventually adjusted their request last month and sought to stop to any online game that offered autoplay, reveal all, adjustable betting, an bonus games. All those features are “characteristic of slot machines, which the Lottery is not allowed to offer, the plaintiffs argued.

Judge Renée Cohn Jubelirer of Pennsylvania’s Commonwealth Court noted that both parties provided “different and reasonable interpretations” of the state’s gaming and lottery laws and that those arguments point out the vagueness of the state’s statutes.

Ultimately, Jubelirer declined to issue the injunction, claiming in a 50-page order the casinos did not meet the necessary level of proof needed for their claims.

Both the Lottery and the state’s casinos received the ability to offer online games in 2017 when the General Assembly approved an expanded gaming law. Pennsylvania’s iLottery games launched in May 2018 and currently offers 42 games, while the casinos just began testing their online gaming platforms this week. The casinos paid a $10 million license fee to offer online games.

Case Will Proceed

Ewa Dworakowski, the Pennsylvania Lottery’s press secretary, told Casino.org on Monday the state agency was satisfied with the judge’s ruling.

“As we have said in the past, Act 42 of 2017 authorized the launch of PA iLottery and the games are being operated in accordance with the law,” she said. “We are working every day to ensure the Pennsylvania Lottery continues to fulfill its mission of responsibly generating profits for senior programs.”

However, just because the Lottery won the first round, that does not guarantee the Commonwealth Court will ultimately rule in its favor.

Part of the reason why Jubelirer opted against the preliminary injunction was that the plaintiffs were required to prove the injunction would not harm the general public. The casinos failed to show clearly that the iLottery games violated state law.

There is evidence that the public interest would be affected by an injunction to the extent that there would be less funds available to support programs that benefit older Pennsylvanians,” the judge wrote.

The case will still continue through the court system. Jubelirer has asked the parties to propose a pre-trial schedule and deadlines for discovery and exchanging expert reports by Aug. 30.

The plaintiffs in the case are: Greenwood Gaming and Entertainment, Inc., which operated Parx Casino and Racing; Mountainview Thoroughbred Racing Association, LLC, which operates the Hollywood Casino at Penn National Race Course; Chester Downs and Marina, LLC, which operates Harrah’s Philadelphia Casino and Racetrack; Washington Trotting Association, LLC, which operates The Meadows Racetrack and Casino; Stadium Casino LLC, which is constructing the Live! Casino and Hotel in Philadelphia; Valley Forge Convention Center Partners, LP, which operates the Valley Forge Casino Resort; and Downs Racing, LP, which operates the Mohegan Sun Pocono.

Lottery’s Impact

While several state lotteries devote their proceeds to improving education or deposit proceeds into the state’s general fund, Pennsylvania’s lottery is the only one that earmarks its revenues for senior care. Since 1972, the lottery has funded more than $29 billion for such programs and services as prescription drug cost assistance, reduced-fare transportation, meal services, and property tax and rent rebates.

The iLottery games officially went live on May 29, 2018. In its first 33 days, the online games generated $20.1 million in revenue, according to information from the Lottery.

Revenue figures for the state’s 2019 fiscal year, which ended on June 30, were not yet available.