Senate Now Considering Handing Over iGaming To The Pennsylvania Lottery

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The leader of the Pennsylvania State Senate threw a rather large kink into plans to legalize and regulate online gaming across the state on Tuesday evening.

Senator Joe Scarnati took to the social media site Twitter on Monday, expressing his apparent preference that the state-run Pennsylvania Lottery bring online gaming to the state.

Scarnati is a Republican and President pro tempore of the Pennsylvania State Senate. This position essentially makes him the senate leader and second in the gubernatorial succession behind the Lieutenant Governor.

Many Bills Have Been Introduced

The Pennsylvania legislature had been busy considering a number of options for gambling expansion in the state as a way to reduce its budget deficit. This included opening up a legal and regulated online gaming market in the state.

Up until Tuesday, the iGaming debate had centered around what tax rate to charge online gambling operations potentially set up by any of the 12 existing brick and mortar casino properties in the state.

Proposed iGaming legislation had included two bills seeking a 14 percent tax on iGaming operations and a third including a 25 percent tax rate.

The proposed legislation also called for upfront license fees of either $8 million or $10 million.

Pennsylvania’s 12 land-based casinos currently pay a 16 percent tax on table game revenues and 54 percent tax on slot machine revenues. This represents the highest tax rates on casino operations in the country. Some lawmakers had even been heard to be considering mirroring those tax rates for online gambling operators.

Why Go Through the Lottery?

Now, it appears the state may be considering cutting out the middle man altogether, and looking to set up iGaming operations through its own state-run Pennsylvania Lottery.

Detractors are already lining up in opposition of the idea. Online gaming industry strategist Chris Grove, in an op-ed on Online Poker Report, claimed that allowing the Pennsylvania Lottery to take over iGaming would leave the state out of upwards of $100 million in upfront licensing fees. Grove’s piece also stated plainly that the lottery lacks the experience and industry know-how to build and run competitive iGaming operations.

Lobbying group The Poker Players Alliance sent out a tweet of its own Monday, replying to Sen. Scarnati by saying Pennsylvania casinos are best equipped to offer iGaming in the state and if given a sustainable tax rate, they will succeed.

Pennsylvanians Should Contact State Reps

The PPA also warned that the Pennsylvania Lottery has little in the way of online poker industry experience and urged its Pennsylvania membership to contact their local representatives and urge them to give up on this idea before gains any momentum.

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

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