As the calendar flips to 2017, the state of Pennsylvania is making a push to legalize online gambling. This comes on the heels of a movement in 2016 that was stopped in the state's senate. In June 2016, the state's House of Representatives voted in favor of a bill that would expand the current gambling in the state. In the amendment, HB 2150, would be language that would make online poker a legal activity.
It then made it through the House of Representatives and the Appropriations Committee - where it received financial approval - but the bill eventually stalled in the senate. This time around, there is co-sponsorship from the senate, which is a positive sign.
On Monday, Pennsylvania State Senator Jay Costa announced his plans to reintroduce legislation that would legalize online gambling in the state. Although Pennsylvania doesn't get the type of national attention that gambling hubs like Las Vegas or Atlantic City receive, the state has actually become one of the most successful in terms of gambling. It seems like the government has finally seen the light and is moving towards legalizing online gambling as well.
So what is the motivation behind the latest push? Well, there's a budget gap of about $100 million in the state and the legalization and regulation of online gambling could deliver the necessary tax dollars to close that gap.
Costa's bill would be great news for the players but he'll have to do a lot of convincing of the different entities involved. His hope is to legalize all forms of casino games on the internet, and right off the bat some land-based casinos might not want that type of competition. However, the plan is that players would only be able to play at the online sites created by licensed Pennsylvania casinos. We'll have to see what that means in terms of the quality for the player, but for the government it means about $10 million in licensing fees per casino.
Since these land-based casinos don't know a lot about the online world and don't have functional platforms where players can just get in the game, they'll likely have to partner with vendors who already know the business. However, if they do so, the vendor will also have to pay a licensing fee of $5 million. After that, any licensed internet gambling operators would be taxed at a rate of 25% on the gaming revenue.
Costa's bill also allows for two of the state's major airports (in Pittsburgh and Philadelphia) to set up tablets for gaming so that those hanging out and waiting for their flights can get some action - not unlike the slots seen at the Las Vegas airport. If the airports go for that, they'll have to pay a $2.5 million licensing fee.
If the bill passes, the state will see a big flow of revenue coming their way and they've already made plans for how to spend it. Most of the licensing money would go to the state's General Fund. In terms of the tax dollars, 15% will flow to the Property Tax Relief Fund and 10% will go to the Commonwealth Financing Authority (economic development).
This bill also includes language to legalize Daily Fantasy Sports and internet lottery sales too, so as you can see a lot has been packed in. Now we'll see if Costa can get the necessary parties on board.