Pennsylvania Representatives Pass Online Gambling Bill

PennsylvaniaThe House of Representatives last night passed a gambling bill to license DFS, slot machines at airports and OTB parlors, and online gambling in Pennsylvania.

The state of Pennsylvania took another small step on the long road to online poker regulation yesterday when the House of Representatives passed HB 2150 by a majority of 114-85. The bill not only covers regulated online poker in Pennsylvania, but all forms of online gambling (including Daily Fantasy Sports), and a relaxation of the rules regarding slot machines.

HB 2150 passed only after proposals allowing Video Gaming Terminals (VGTs) in bars and diners were removed last week, and the bill now passes to the Senate – where it is no sure bet to pass – before seeking the approval of Senator Tom Wolf. If enacted, it would likely take around a year before regulated online poker in Pennsylvania is up and running.

Big Fees, High Taxes and No Mobile Gambling

As the proposals stand at present, the state´s twelve brick-and-mortar casinos would be allowed to pair up with approved online gambling operators to provide online casino and poker games. Each casino would have to pony up $8 million for a five-year license, while each operator would have to pay $2 million. Annual license renewals after the initial five years would cost $250,000 and $100,000 respectively.

Gross Gaming Revenues will be taxed at 16% – with 2% going towards economic development projects and the rest helping to fill the chasm in the state´s budget. Unfortunately for online gambling operators – and the majority of Pennsylvania´s online gamblers – playing poker on a mobile will not be permitted under the legislation. However, there is the provision to allow for interstate compacts to help liquidity – sometime in the future.

Despite there being no provision to play online poker on a mobile, mobile gambling will be allowed in six of the state´s airports. Airport mobile gambling licenses will cost $1 million per airport and revenues will be taxed at 54%. Off-track betting (OTB) parlors will be allowed to install slot machines for the first time, and DFS operators will be able to apply for licenses in Pennsylvania at the relatively cheap price of $50,000 plus a 5% tax on revenues.

Online Gambling in Pennsylvania By No Means a Done Deal

The next stage for the bill is its introduction into the Senate. Presently there is no indication about when this may occur but, if the revenues from online gambling are to be counted towards the state´s 2016/2017 budget, it would have to happen before Friday. This may not be enough time for Senators to get their heads around previously-expressed concerns regarding cannibalization of the brick-and-mortar casino industry, geolocation technology and problem gambling.

Furthermore, at last year´s hearing of the Senate Community, Economic and Recreational Development Committee, proposals were discussed that would see revenues from online gambling taxed at the same rate as brick-and-mortar casinos and airports (54%) – a figure that would make the provision of online gambling in Pennsylvania untenable. Even at this rate, the bill to regulate online gambling in Pennsylvania may not appease anti-gambling Senators.

Last December, Senate majority leader Jake Corman was asked by a reporter from NBC Philadelphia why the Senate was not considering the regulation of online gambling as a source of revenue. [geolink href=””]Senator Corman replied[/geolink]: We don’t have the votes for that, I mean, that’s just plain and simple that won’t happen. Even if his views – and those of the Senate have changed – nobody is quite sure about what side of the fence Governor Tom Wolf sits on.

Maybe we will find out in the not-too-distant future.

Jacqueline Packett
Jacqueline Packett