Pennsylvania Online Gambling: Where Does the State Stand?

by Kyle Miller

PennsylvaniaThe state of Pennsylvania has been poised as the next to pass legislation to offer online gambling but has yet to do so. Where does the state currently stand in their efforts?

Pennsylvania is the only state in the US that has shown major effort in trying to pass online gambling legislation. A bill to regulate online gambling made it past the House of Representatives but may not be approved by the Senate, which would bring the state back to square one. It seems the state takes one step forward and two steps back, never able to pass legislation.

Summer Efforts

In June, the House of Representatives of the state voted 114-85 in support of a measure that would regulate several options including interactive gambling, fantasy sports betting and slot machines in airports of the state. The goal of the bill was to help bridge a $100 million gap within the state budget. The bill had to pass to be able to avoid the same budget stalemate of 2015.

It took a total of four attempts of the bill, HB 2150, to see the measure pass. This means that the bill already had opposition and many industry insiders feel that the measure will face even more opposition as it heads to the Senate later on this year.

Details of the Measure

When HB 2150 was first created, the bill was basically focused on the daily fantasy sports industry and regulation. Once the need to raise funds arose, the bill was changed to include online gambling plus adding video gaming terminals at local restaurants and bars as well as providing slot gaming at airports. The VLT addition was dropped soon after as this portion of the measure was opposed with force.

When it comes to online gambling, operators would have to pay $8 million in licensing fees plus Gross Gaming Revenue taxes of 16%. The fees that operators would have to pay should be enough to provide revenues needed for the state if enough operators are interested. This aspect could help the bill to move forward within the Senate.

HB 2150 Faces Hurdles

The measure does face a few hurdles as the Senate is set to review the measure this fall. It won’t be long until the Senate is back in action and since the budget has passed, the bill will be able to have the full attention of lawmakers. There are several hurdles or obstacles that may hurt the measures chances of passing. This includes the opposition of lawmakers towards an expansion of gambling, the tax rate set in the legislation, lack of protection for players and the adjustment of other anticipated revenue streams.

We know that there is opposition to the measure as we have seen members of the House of Representatives discuss how they are not in favor of an expansion of gambling in the state. It is believed that even more opposition may be present in the Senate. As far as the tax rate is concerned, the 16% set in the bill is lower than what Senate members wanted in the past. Numbers such as 54% have been suggested which would be astronomical and might actually keep operators from wanting to participate.

It is also believed that Senate members are concerned about protections for players. In the bill, tax revenues are to be put in a trust to ensure payouts are made in a timely manner to the state. Yet there is not mention of protection such as this for player’s funds. The bill does state this money would be placed in a separate bank account by the operator.

All of these factors are to be considered and it will be interesting to see if the next legislative session will result in Pennsylvania finally moving forward with online gambling legislation.