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iGaming Back on Table in Pennsylvania

iGaming Back on Table in Pennsylvania

Just one week into the 2017 legislative session, online gaming was back for consideration in the Pennsylvania legislature. State Senator Jay Costa introduced a bill last month, picking up from where the state House of Representatives left off last year, passing a bill, but waiting fruitlessly for action in the Senate.

Costa’s bill would regulate, legalize and tax online gaming and daily fantasy sports. But he’s unlikely to get support from DFS participants, because it envisions a licensing fee of $2.5 million and a 25 percent tax rate, far higher than any other state that has legalized DFS. The highest rates—New York (15.5 percent) and Missouri (11.5 percent)—don’t even come close.

For online gaming, Costa’s bill envisions a $10 million licensing fee for land-based casinos, and a $5 million fee for vendors wanting to offer games via those casinos. The tax rate would be 25 percent. Land-based casinos are taxed at 54 percent (slot machines) and 16 percent (table games).

The bill would also allow the lottery to sell tickets online and permit “tablet gaming” at Pennsylvania airports. It would also reinstate the gaming local-share provision that the state Supreme Court struck down as unconstitutional last year.

Costa says the bill would raise $137 million for the state in this fiscal year, more than plugging an existing $100 million budget gap.

Meanwhile, the Poker Players Alliance and other pro-iGaming groups are criticizing Pennsylvania state Senator Robert Tomlinson for a letter just made public that he sent to the state Assembly concerning potential internet gaming passage, saying Tomlinson repeated misconceptions about iGaming which may have contributed to the issue being pushed to this year’s legislative session.

As state lawmakers convened for a post-election lame-duck session, a bill to legalize online gaming was before both chambers, and many thought the measure—which provided for state regulation of iGaming but left out the details—would pass. Tomlinson’s letter raised long-debunked myths about iGaming that could have convinced Assembly members to delay the issue until 2017. The letter suggested it would be difficult to prevent underage gambling, and that iGaming would cannibalize the land-based industry.

In a rebuke to Tomlinson, John Pappas, executive chairman of the Poker Players Alliance, wrote that Tomlinson’s letter ignored 30 hearings and three years of debate on iGaming by Pennsylvania lawmakers.

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