Pennsylvania amends gambling bill to keep operators’ interest

PA gambling bill passes SenatePennsylvanian online gambling operators may be interested in the amendments to a gambling bill by the state’s House of Representatives.

It can be a bit hard to keep up with the Pennsylvanian parliament in terms of the number of gambling bills floating around, but this bill which passed the House on Wednesday night is a counter-proposal to the recent legislation passed by the Senate.

A flourishing online gambling industry was not looking good in the state when the Senate passed H 271 two weeks ago. While the bill legalises online gaming by allowing land-based casinos and poker operators to apply for a license, it taxes operators 54 percent – online poker operators would only be taxed 15 percent, however.

Even if Internet gambling is legalised, operators are unlikely to be interested in such a high tax rate.

Casino operators would also have to pay $5 million for an online casino license, as would poker operators – splitting the license applications in two.

The bill was approved and sent to the House. But amendments have been made and the online gambling industry has a fighting chance as legislators approved a new tax rate of 16 percent plus an additional 3 percent in local share assessment.

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Under the amended bill, operators would have to pay a bit more for online gambling licenses with the proposed amount set to $8 million, but the licenses are not split between casino and poker operators.

It also does not include a “bad actor” clause – New York recently added this to a bill attempting to legalise online poker – which prevents operators who have previously offered their services to the state’s residents.

While the amended bill now heads back to the Senate for concurrence, its future is uncertain as Senators may not agree with the amended tax rate.

But the biggest proponent of the amended bill which may get it thrown out is the reintroduction of provisions which would allow video gaming terminals (VGTs) at specific locations. The House wants up to five VGTs at venues with a liquor license and up to 10 at truck stops and off-track betting parlours.

Naturally, the state’s casino operators have a strong objection to the implementation of VGTs and there are only a few Senators who are interested in the move.

The same issue was in play last year but the Senate was strongly against it and as a result, the gambling expansion bill was thrown out – a likely scenario for this year too.

But there are a number of conditions the House and Senate agree on including fixing the local share tax, legalising and regulating online gambling, allowing the Pennsylvania lottery to sell its products online, and authorising tablet gambling at airports.

They both also agree on authorising daily fantasy sports, except there are some differing guidelines. The House has set the tax rate at 19 percent, while the Senate has set the tax rate at 12 percent for operators. The House has also proposed five-year licenses which would cost $50,000, and annual renewals, set at $5000 or 7.5% of annual revenue – depending on which costs less.

Also proposed is ‘fantasy contest terminals’. It is not clear what these terminals are.

The gambling legislation has been proposed to fill a hole in the state budget – legalising the industry is expected to contribute at least $150 million to the government. The budget is expected to be delivered by June 30, which means the Senate does not have long to mull over the amendments made by the House.