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High Taxes Will Eliminate Chances for Online Poker in PA

PennsylvaniaNew proposals to regulate online gambling in Pennsylvania include a tax rate that will make the provision of online poker financially unjustifiable.

During the quiet Christmas period, proponents of regulated online poker have been bullish about early action in the Keystone State. Meetings to discuss the [geolink href=”https://www.usafriendlypokersites.com/casino-tax-issue-thwart-pa-igaming-regulation/”]local share casino tax issue[/geolink] were interpreted as a forward movement towards regulation, and new champions of the cause have been created to replace the outgoing motor behind last year´s legislative efforts – John Payne.

Representatives of the Poker Players Alliance (PPA) have fueled much of the positive speculation. The PPA´s State Director for Pennsylvania – Judah Rosenstein – told readers of a pro-regulation poker news site: It is realistic to expect 2017 to be the year that PA finally gets legal, regulated online poker. Just five days into 2017, Mr. Rosenstein may already be regretting his confident optimism.

Costa Publishes Senate Co-Sponsorship Memoranda

The first actual forward movement towards regulation happened yesterday, when the news broke that Senate Minority Leader Jay Costa had published a Senate Co-Sponsorship Memoranda announcing his intention to introduce changes to the Pennsylvania Gaming Act. His proposals are based on the bill that passed the House of Representatives last year with amendments intended to:

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  • Allow the state´s gaming industry to evolve in a responsible manner.
  • Address the local share casino tax issue.
  • Generate $137 million in revenue for the 2016-17 budget.

In order to achieve these objectives, Senator Costa is proposing several changes to last year´s bill that would make it financially unjustifiable for casino operators to offer online poker. These include a licensing fee of $10 million (up from $5 million from when John Payne´s proposals passed the Gaming Oversight Committee [geolink href=”https://www.usafriendlypokersites.com/pa-online-gambling-bill-passes-committee-stage/”]in November 2015[/geolink]), and a tax on Gross Gaming Revenues of 25% (up from 14%).

If the increased licensing fee is not sufficient to deter online poker operators from entering the market, the extortionate tax rate will be. The amount of rake that would have to be charged in order to justify operating under these terms will make games of online poker unbeatable – discouraging players from visiting regulated sites and leaving them no option but to give their business to offshore sites.

No Rush to Move Forward with Legislation Either

In addition to dampening any enthusiasm about the regulation of online poker in Pennsylvania, Senator Costa appears to be in no rush to bring his proposals to the table. Although stating that he intended to introduce his proposals in the near future, and inviting colleagues to co-sponsor his bill, information given to Gambling Compliance´s Chris Krafcik implies a different timeline:

Many times in the past, legislation has been introduced that has subsequently been amended to suit the demands of stakeholders. Proponents of regulated online poker have used this historical evidence to suggest that nothing is ever set in stone until it is set in stone. However, Senator Costa effectively told Chris Krafcik that the high tax on Gross Gaming Revenues was non-negotiable:

Is Regulated Online Poker in Pennsylvania Already Dead for 2017?

Only the insanely pessimistic would claim that regulated online poker in Pennsylvania is already dead for 2017. There are options for companion bills to be introduced dealing with online poker as a stand-alone subject, and for alternative bills to be introduced if Senator Costa´s proposals fail to find favor in the state´s Republican-held legislative chambers.

The timeline, the tax issue and an apparent lack of provision for the horseracing industry might scupper Senator Costa´s proposals before they reach the committee stage, leaving the door open for one of the new champions of the cause to step up to the plate and introduce more poker-friendly legislation – hopefully this time with clauses that genuinely provide player protection.

Whoever that new champion may be, they will certainly have their work cut out to find a solution to the issues handicapping the progress of an online gambling bill in Pennsylvania. Whether or not their solutions eventually allow for the provision of regulated online poker in Pennsylvania, we shall have to wait and see.

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