When Pennsylvania legislators indicated an aggressive push for a gambling expansion bill in 2017, they were not exaggerating. Some lawmakers are already taking action to make a court-mandated casino tax correction combined with other gambling measures, including the launch of an online gaming industry.
Online gaming proponent and State Representative John Payne ended his term in the legislature in 2016, but others have taken up the gauntlet. Pennsylvania Representative Rosita Youngblood and State Senators Kim Ward and Jim Costa are on the job to ensure that Payne’s efforts are not abandoned.
Pennsylvania Senator Jay Costa will soon introduce iGaming legislation with new proposed tax rate https://t.co/czOmg4xuR1 …— PokerPlayersAlliance (@ppapoker) January 4, 2017
See, What Had Happened Was…
Legislators ended their respective sessions in December with online gaming, as well as all of the gambling expansion and tax measures, without resolution. Despite a flurry of activity at the end of 2016, the final deed remained undone.
As 2017 kicked off, there was a state budget that had passed in the summer of the previous year that required $100 million in online gaming revenue. Legislators had to find a way to come up with the money that the governor expected would fill that revenue gap. While the House had passed the bill in 2016 to produce those funds, the Senate had not acted, which allowed the bill to die.
First Actions of 2017
Before the new year even got underway, Ward announced that she scheduled a meeting for January 3 to meet with representatives of all of the state’s 12 casinos to discuss the court decision regarding a local tax change, as well as other facets of potential gambling expansion. Results of that meeting have yet to be disclosed.
Meanwhile, Senate Minority Leader Jay Costa announced a plan to introduce a gambling expansion bill to fill the budget revenue gap. The first glimpse of his plan was made available this week in a Senate Co-Sponsorship Memorandum from Costa to all of his fellow members. It noted that the upcoming legislation would address the recent Pennsylvania Supreme Court decision regarding local slot machine taxes as well as to generate an estimated $137 million for the 2016-2017 budget. Using part of last year’s HB.1887 from Rep. Payne, the bill will also address online gaming and fantasy sports.
As for the internet gaming provision, Costa claims that all categories of casinos will be eligible for licenses, with a $10 million fee imposed upon casino operators and $5 million for vendors, such as the gaming platform providers. Revenues will be taxed at a 25% rate. In addition, tablet gaming will be allowed at the two primary airports in the state via a pilot program, and DFS can be offered with a $2.5 million licensing fee. Costa also wants the State Lottery to offer internet sales to increase revenue.
.Without my family, I wouldn't be where I am today.Proud to have them with me as I was sworn-in today on the Senate floor. pic.twitter.com/px7ublK4Sv— Senator Jay Costa (@Senatorcosta) January 3, 2017
With respect to the other side of the legislature, Youngblood is expected to introduce some form of similar legislation in the House in the coming days or weeks. She seemed particularly motivated when Online Poker Report asked her about it in December. Youngblood is likely to pick up where Payne left off.
Potential Stumbling Blocks
The primary objection that is already being discussed behind the scenes is the high tax rate. Combined with the licensing fees, many operators may find the costs prohibitive. Those who can afford to pay the fees and taxes may be limited to operators with extensive budgets and primary offerings in the form of online casinos. There will likely be an operator or two who will include online poker in the mix, but it may not be a priority. It remains to be seen if any of the participating casinos or potential operators contact Costa and other legislators to express concerns. The Poker Players Alliance will likely monitor that situation as discussions take place.
PA Senator expected to introduce bill to license iGaming. Hearing some rumblings that operators may not happy with tax rate. Need to monitor— PokerPlayersAlliance (@ppapoker) January 4, 2017
Another problem may come via the powerful Sands Casino Resort Bethlehem, owned by none other than anti-online gaming’s Sheldon Adelson. Though Sands does not carry more influence than any other casino in Pennsylvania, Adelson may threaten to hold back on casino expansions and other money-making ventures for the state if the bill passes. His lobbyists will likely be knocking on legislators’ doors with great incentive from Adelson to shut down the online gaming portion of any bill.
Poker players and fans should keep their eyes on the PPA’s Twitter account and website for new information and action plans.