Pennsylvania Moving Forward with Online Gambling Push

by Jim Hall

Online Gambling is on the move in Pennsylvania with discussions having taken place this week along with a Senator announcing a new bill will be introduced soon.

It was believed that the state of Pennsylvania would start this year off with discussions of online gambling and get back to work trying to see legislation passed in 2017. However, many did not expect any developments within the first week of the New Year. Yet, here we are. Already, a meeting has taken place between casino operators and legislators along with a Senator announcing a new bill will be released in the near future.

Discussion with Operators

To begin, at the end of 2016, Senator Kim Ward announced she was going to host a meeting the first day of the legislative session with gaming operators to discuss what will take place in 2017 as far as the gaming legislation agenda for the state. This meeting took place on Tuesday and hopefully resulted in some quality info gathering and reassurances for the industry that good changes are coming. The exact results of this meeting have yet to be discussed or made public.

Senator Jay Costa’s Proposal

Senator Jay CostaAlso this week, Senator Jay Costa announced that he will be introducing a proposal for online gambling legislation that will cover all aspects including daily fantasy sports. The bill will be based on the same info that was found in HB 1887. This bill was one that the House passed but the Senate did not move forward with last year.

The bill proposed by Costa, which has yet to be introduced, will charge gaming operators a licensing fee of $10 million for going online. Any vendors providing online technology will have to pay a lower fee of $5 million. The money paid in fees will go towards the General Fund of the state. Bills that were introduced in the past had a licensing fee of $8 million set for casinos and $2 million for vendors offering services.

Included in the bill will be all categories associated with casino gaming including table games, slots, etc. for online gaming play. Casinos would not be allowed to offer online gaming at the casino property as a way to avoid paying taxes.

For the taxes associated, Costa has set a rate of 25% for online gaming revenues. This amount is a midway point when considering what has been proposed in the state before. In 2015, Senator Kim Ward wanted a 54% tax which is quite high when looking at the online gambling industry in the United States. Last year, a 16% rate was suggested. So the amount by Costa may not be totally approved by operators but it is a midway point when considering other amounts that have been proposed in past legislation. The majority of the money paid in tax will go towards a Property Tax Relief Fund while the remainder will go to the Commonwealth Financing Authority.

Also considered in the proposal will be something that was on the table last year, table gaming taking place at airports. Only the airports of Philadelphia and Pittsburgh will be eligible for such gaming and a pilot run will take place for five years. Operators who offer such mobile gaming will need to pay a licensing fee of $2.5 million with a tax rate of 25%. Also included in the measure is daily fantasy sports. The DFS industry will see the same tax rate on revenues and a startup fee of $2.5 million.

The lottery is also discussed in the new proposal with online options made available. Costa feels that allowing the lottery to go online will assist in gaining new revenues.

It will be interesting to see how the bill fairs once Costa introduces the proposal in the near future.