Since 2013, the state of Pennsylvania have tried to pass online gambling legislation and failed. The first bill was introduced in 2013 and since that time, several measures have been introduced with the state showing promise to join Nevada, Delaware and New Jersey in offering some form of online gaming, but efforts either stalled or fizzled out. Since last year, it seems the state has grown closer to passing such legislation, but issues always arise to the contrary. So, what’s holding Pennsylvania back?
In 2017, several gambling bills have been introduced that include a number of factors involving gaming expansion for the state such as daily fantasy sports, skill-based games, video gaming terminals, gaming tablets in airports, etc. In September of last year, the state Supreme Court decided to rule that that the state tax on casinos for host communities was unconstitutional, which has seemingly thrown a wrench in the online gaming plans, or any gaming expansion for that matter. So much has been on the table at one time, legislators cannot seem to come up with legislation that everyone agrees on.
The host community tax levy situation has to be resolved and the time frame for something to be done is coming up soon. The state Supreme Court first gave the state until late January to find a solution. According to the law, casinos of the state were to pay 2% of slot gaming revenues or $10 million in fees annually to host cities and municipalities, which ever amount was bigger. The court found this to be unfair to the smaller gaming venues. A solution was to be found by lawmakers by January, but none was presented. Legislators asked for an extension and were given until the end of this month to find a solution.
So now, lawmakers are not only looking at online gaming legislation but also the airport gaming issue, VGTs, the tax levy, etc. It seems lawmakers cannot decide as to which area gaming should expand upon as well as how the host community tax should be handled, which has led to an overall stall of any gambling legislation.
Estimates have shown that online gaming revenues could start at $307 million and go as high as $413 million, based on studies from 2014 and this past year. With these estimated amounts, the state stands to make a pretty penny if they could get online casino and poker gaming off the ground. However, if proposed tax rates stay the same, interest may be lacking.
Some legislators have suggested that the tax rate for operators should be set at 54%. This rate is far greater than what New Jersey has set as well as international operators. Realistically, operators are not going to want to offer online gaming in Pennsylvania if they have to pay more than 50% of what they make to the state.
Online gaming would provide the state casinos with an additional amenity and appeal to an audience that plays at the venues but also to the younger crowd who enjoy the online aspect. It seems for now, legislators are moving in the wrong direction or have no sense of understanding as to how the online gaming industry works and how legislation needs to be created in order for the industry to take shape. Hopefully, legislators will be able to come to some type of consensus and something will emerge this year to see Pennsylvania become the next state to offer online gambling in the US.
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