There was considerable excitement in the Pennsylvania poker player community yesterday. It had come out that NSUS, an investment and marketing company, would be considered for an online gambling license at today’s meeting of the Pennsylvania Gaming Control Board (PGCB).
Today, the PGCB granted that license without any additional discussion.
NSUS owns GGPoker Network. This online operator formerly concentrated its efforts on the Chinese black market. However, it has been pivoting towards licensed European operations in recent years.
Rumors of an impending GGPoker PA launch are unfounded
Pennsylvania online poker players have been waiting impatiently for a second option. PokerStars launched in the state in November 2019, and other sites were expected to follow shortly after. Instead, PokerStars has enjoyed a monopoly for over a year.
Word is that BetMGM Poker will launch in the not too distant future, possibly joined by Partypoker or WSOP. However, the news about today’s PGCB meeting fueled speculation that GGPoker might arrive first.
GGPoker has indicated that it wants to seek legal access to the US market eventually. Last year, it also struck up a deal with WSOP to host the latter’s online Circuit ring and gold bracelet events for international players.
Nonetheless, a 2021 launch would be much sooner than anyone anticipated and, despite the rumors, doesn’t seem likely quite yet. For starters, the license NSUS will receive today is not the correct type to launch a GGPoker product.
PGCB Communications Director Doug Harbach confirmed this to PlayPennsylvania:
“The interactive gaming manufacturer license would allow NSUS to provide the technology for an online casino or poker product. If NSUS would want to operate a co-branded website (with a certificate holder), it would have to obtain an operator license.”
Manufacturer vs. operator licenses
Pennsylvania licensing is complicated, just as the online gambling business itself is complicated. Running a Pennsylvania online casino or poker room requires at least three types of certification or licensing, often held by three or more separate companies.
First, you need a land-based casino owner who holds the appropriate Interactive Gaming Certificate. These grant the right to conduct iGaming in the state. Each Certificate allows the owner to form up to three partnerships to offer the product in question, each under a separate brand.
Next, you need a company with an Interactive Gaming Operator License. It’s the operator’s brand that features most prominently on the site, though the Certificate-holder’s brand must also appear. The operator is responsible for the day-to-day running of the site, managing of player accounts, security, and so forth.
Finally, you need the software to run the site, both the platform and the games running on the platform. These must be supplied by a company holding an Interactive Gaming Manufacturer License or Interactive Gaming Supplier License, depending on whether they produce the technology themselves or not.
What’s important to realize here is that the license NSUS should receive today is a Manufacturer License. This would permit it to supply games or a platform to an existing operator. It would not, however, allow GGPoker to launch in the state under its own brand, as stated by Harbach.
Before that could happen, NSUS would need to apply for and receive an Operator License. It would then need to find a Certificate-holder willing to serve as its land-based partner.
A questionable history
It’s not even a given that NSUS is applying for this license in order to bring GGPoker technology to Pennsylvania. The company owns several other gambling-related brands.
These include 2Ace Poker and SlotVentures, both part of its NSUSPlay social games division. Although both are play money products at the moment, it’s entirely possible that NSUSPlay has been working on real money products which it now wishes to deploy in the US.
If it did want to launch a GGPoker product, however, then receiving the Manufacturer License is a first step in that direction. The question next becomes whether the PGCB would grant it an Operator License as well, so it could launch its own brand using its own technology. That’s a difficult question to answer, as it would depend on what the PGCB turns up in its investigation, and how it judges the company’s behavior.
It’s unlikely that GGPoker’s history in China would be much impediment. After all, PokerStars was also serving Chinese customers illegally up until just a few months ago. US regulators have shown a tendency to take seriously any violations that happen in western Europe, commonwealth countries, and important allies like Israel. At the same time, they’ve been more lax about behavior elsewhere in the world. In particular, they seem to turn a blind eye to operators serving Russian and Chinese customers against those governments’ wishes.
Lack of VPN policing could be a black mark
More concerning are reports that GGPoker is slack when it comes to detecting Virtual Private Networks (VPN). A VPN is a technology allowing players to mask their IP and thus appear to be using the internet from somewhere other than their actual location. US poker pros sometimes use VPNs to play on sites that refuse to serve American customers.
Word on the street in the poker community is that one is far less likely to get banned for attempting this at GGPoker than elsewhere. This is entirely based on rumors and anecdotes, however. Gambling companies are notoriously tight-lipped about security, and the PGCB’s investigations are likewise private. Thus, there’s no way of knowing if the company has in fact been negligent on that front, or what the PGCB has turned up.
What we can say is that receiving even just the Manufacturer License took an abnormal length of time. The application date listed in PGCB documents is December 2019, while most other pending applications for this license type are from the latter half of 2020. What’s more, NSUS hasn’t even filed an application for an Operator License yet.
This jives with what little information has come out of GGPoker itself.
“This has been a long time coming,” a company representative told PlayPennsylvania. “We’ve worked hard getting GG ready for the US. We still have a ways to go, but this is an important step.”
What will NSUS do in Pennsylvania in the short term?
So, what is clear is that GGPoker intends to try to launch in Pennsylvania eventually, and sees the Manufacturer License as a first step. What’s less apparent is what, if anything, NSUS intends to do with its Manufacturer License in the meantime.
Neither company representatives nor the PGCB are at liberty to discuss this. However, there are three basic possibilities that we can see:
Possibility #1: Power another poker site with GG technology
There are several casinos in Pennsylvania that hold certificates to offer online poker, but have yet to reveal any plans to do so. The main candidates are:
Theoretically, GGPoker could adapt its platform to provide poker capabilities for any of these operators. However, Parx already has a poker platform available through its existing supplier GAN, and Wind Creek is probably too small to be considering poker. The most likely candidates for this plan would be a Barstool Poker or BetRivers Poker product.
Possibility #2: Branch out into real money casino games
As mentioned above, it’s entirely possible that NSUSPlay has been working on real money products. If the company is looking to get a toehold in legal US markets but has too many question marks surrounding GGPoker, then getting started as a supplier of slots products could be a sensible approach.
It’s also an easier sell for potential partners. Poker is a high-risk business with a low ceiling on potential profits due to limited demand. In PA, it also means going toe-to-toe with a PokerStars monopoly. By comparison, online casinos are usually pretty willing to expand their slots catalogue.
This possibility hasn’t received much attention. After all, the addition of a few new slots isn’t nearly as exciting from a customer’s point of view as the launch of a new poker room. However, it’s important to remember that there’s more to NSUS than just GGPoker. There’s a real possibility that they have plans for the state, but that these don’t immediately involve either poker or the GG brand.
Possibility #3: Hold on to the license speculatively
The third, and least exciting possibility is that NSUS won’t do anything at all right away. If it is the case that this is preparation for a subsequent Operator License application, this may be the last we hear about it for a while.
Again, we don’t know what has gone on privately between NSUS and the PGCB. However, if the former is focused entirely on getting the GGPoker brand into the US, then it is telling that it hasn’t applied for the Operator License yet. It could be that it knows it wouldn’t receive approval right now, or it could simply not be ready to launch such a product.
Keep in mind that more than a year elapsed between NSUS’s application for a Manufacturer License and its issuance. An Operator License application could take equally long. If this is indeed the first step on the road to launching a US GGPoker site, then the next step might not come until 2022. If NSUS does have other plans in the meantime, those should become apparent soon enough.
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