Pennsylvania’s Latest Online Gaming Bill Clears Two Senate Votes

House Bill 271, an online gaming legalization bill has cleared two separate Senate committees in Pennsylvania, stirring hopes of the bill getting approval during this legislative session. The bill will now be presented for a full Senate vote shortly.

The two committees, Senate Community, Economic & Recreational Development Committee and the Senate Appropriations Committee have both approved the bill which includes provisions covering legalization of daily fantasy sports and online lottery sales apart from online gaming. Both the committees voted in favor of the bill by a large margin.

The bill was heavily amended in the Senate as a number of concerns were raised. The tax rate has now been set at 54 percent for online slots and table games, and 16 percent tax for internet poker. Some local media reports have highlighted gaming industry’s concern regarding the high tax rate on non-poker games.

Pennsylvania’s 12 brick-and-mortar casinos pay a 54 percent tax on slot machine revenue. All existing casino operators would be eligible to apply for online gambling licenses but if they choose to not participate, the licenses can be given out to casino operators from other states.

An internet poker license would require license fee of $5 million, as will a slot/table game license. Pennsylvania is hoping to net an additional $250 million for its budget from gambling expansion. According to sources the bill could be presented for a vote before the full Senate before the end of this week. If passed, the bill will be sent back to the House for ratification, after which it will head to the Governor for his signature.

With a relatively low tax rate, online poker is placed more favorably in this version of the bill. Pennsylvania is one of the biggest poker markets of the country. Its land-based poker rooms have recorded revenue of $20.38 million for the first four months of 2017, an increase of 1.4 percent compared to the same period in 2016. In 2016, state poker rooms netted $58.6 million, which was an increase of about $1 million over revenue when compared to 2015.

However for the online gaming market, casino games and slots are the ones that generate maximum revenue as seen in New Jersey. According to experts, online gambling could add around an estimated $300 million to the existing gambling market, which would make it 10 percent of total revenue. New Jersey’s online gambling market generated nearly $200 million last year, adding 10 percent to Atlantic City total gaming win.