PA Senate Committees Back Online Gambling Bill

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An online gambling bill has passed the Senate committee stage in Pennsylvania and is expected to be passed by the full Senate sometime this week.

In fact, the comprehensive gambling expansion bill could see a vote on the Pennsylvania Senate floor as early as today (Wednesday).

We need to get this started,” Republican Sen. Kim Ward told the Pittsburgh Tribune-Review newspaper.

Two Key Committees Passed

Bill H 271 was passed by the Senate Community, Economic & Recreational Development Committee 11-3 on Tuesday. Later that same day the bill also passed the Senate Appropriations Committee 24-2. It now needs to pass the full Senate before it moves to the House, where further amendments could be made.

Licenses Available, But Fees Steep

In terms of online gambling, the bill would authorize the issue of 12 online poker licenses and 12 online casino licenses. These would be offered first to the state’s 12 licensed land-based casino operations.

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Bringing World’s Highest Tax Rates Online

The tax rates have been the biggest issue in regards to online gambling in Pennsylvania and this bill would see online slot machine and table game revenues taxed at a rate of 54 percent. This is the same rate slot machines are taxed in Pennsylvania, and it remains the highest casino revenue tax in the country.

Online poker revenue would be taxed at a rate of 16 percent. Up-front licensing fees for online gambling operators would be $5 million each for casino and poker operations.

DFS, Airport and Lottery Gambling Included

The bill also seeks to legalize and regulate daily fantasy sports, charging a licensing fee of 7.5 percent of gross revenue and taxes of 12 percent.

The bill would also allow the Pennsylvania Lottery to offer online games and ticket sales. Plus, it authorizes tablet gaming at airports.

Local Share Fix is Key

The Senate has been making an effort to meet a May 26 State Supreme Court deadline for action in regards to the state’s local share payments.

These local share payments represent the tax money distributed to counties and municipalities hosting casinos in Pennsylvania. However, the State Supreme Court ruled the payments unconstitutional this past September, giving Pennsylvania lawmakers until January 26 to amend the law. That deadline was extended until May 26.

The bill includes language addressing the local share payment issue and continuing the payments in some form.

The Road Ahead

If the bill passes through the state Senate and the House, it would go to the Governor Tom Wolf’s office for approval before becoming law. Should the House seek to make amendments, including lowering the tax rates for online gambling operations, the bill would go back to the Senate again.

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Marty Derbyshire has been covering online gambling for various industry media outlets since 2007.

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