Senate advances sweeping online gambling expansion Updated Jan 05, 2019; Posted May 24, 2017 The omnibus gaming bill, which will next go to the House, is expected to generate between $109.
- Pennsylvania is considering a bill to authorize video gambling terminals at more than 10,000 bars, taverns and restaurants throughout the state.
- Some prominent Republican lawmakers support the bill, but it is widely opposed by Pennsylvania’s casino industry and by a bipartisan coalition of legislators.
- Opponents to the bill argue that it will only siphon gambling revenues away from existing gambling operators, including sportsbooks.
- The bill has longshot odds to pass, as the opponents to the measure have been quite vocal.
- What the PA gaming expansion bill does. The bill would legalize online slot machines, online table games and online poker throughout Pennsylvania. It also regulates daily fantasy sports, sports betting (if federally legalized), online lottery, video gaming terminals at truck stops, and tablet gaming in airports.
- Lawmakers are contemplating an expansion of gambling options in the state, which would go a long way to helping the recovery process, but at least one casino operator doesn’t think it’s a good.
- Highlights of Pennsylvania's casino gambling expansion bill Associated Press; Oct 26, 2017. The requirement had meant about $140 million that Pennsylvania's casinos pay annually to local.
HARRISBURG, Penn. – Republican lawmakers in Pennsylvania are pushing to pass a bill that would legalize and regulate video gaming terminals (VGTs) in more than 10,000 bars, taverns, and restaurants.
Many such establishments already offer unregulated electronic games of skill. The new legislation is billed as a way to bring gambling revenues from these establishments into the light.
Under the proposed law, businesses with liquor licenses could have up to five regulated VGTs—a motion that proponents of the bill say could generate up to $250 million in state taxes.
Efforts to pass the bill have been led by Senate President Pro Tempore Joe Scarnati (R, Jefferson) and backed by wealthy lobbyists from VGT companies.
If passed, individual counties and municipalities would be able to opt-out of legalizing VGTs.
The proposed bill has been opposed by a number of groups, including both Democratic and Republican legislators, Pennsylvania casinos, and the manufacturers of the existing games of skill, who say that they cannot compete with “flashy” VGTs.
Pennsylvania is already one of the most lucrative gambling markets in the United States, with full support for most forms of online and retail gambling. There is some fear that adding more gambling options would only harm other sectors of the gambling market without increasing overall revenues.
The bill’s prospects appear to be waning as it fails to gain traction in the Legislature.
How Would Expansion Affect PA Gambling And Tax Revenues?
If the bill, as its proponents claim, brings unregulated gambling into the light so it can be properly regulated and taxed, it would indeed help Pennsylvania shore up its budget.
Opponents to the bill argue that it will just further saturate an already crowded Pennsylvania gambling market and siphon revenue from casinos, sportsbooks, and other licensed gambling operators.
They also point to the coronavirus and the ongoing protests of police brutality as issues that deserve priority over gambling expansion.
The reality is likely somewhere in the middle, but the $250 million figure cited by expansion proponents is certainly a gross exaggeration. To raise that amount of money in state taxes, VGT-licensed establishments in the state would need to earn an average of $70,000 in VGT revenue annually.
That would likely entail an average annual betting handle of nearly a million dollars per establishment.
How Would Gambling Expansion Affect PA Sports Betting?
It is impossible to know for certain exactly how widespread availability of VGTs would affect the behavior of bettors, but it certainly wouldn’t increase sports betting revenues.
One possible silver lining is that legalizing VGTs would open the door for similar legislation to allow sports betting at the same establishments. Doing so likely wouldn’t increase overall sports betting revenues, but it would increase flexibility.
Ultimately though, the potential drawbacks for the sports betting industry would far outweigh the potential benefits.
News tags: Democrat Joe Scarnati Pennsylvania Pennsylvania Legislature Republican VGT video gaming terminals
With a dual background in English and sports performance and business analytics, Carter aims to write stories that both engage and inform the reader. He prides himself on his ability to interweave empirical data and traditional narrative storytelling. When he isn’t keeping readers up to date on the latest sports betting legal news, he’s banging his head against a wall regretting his decision to be a Tampa Bay Buccaneers fan.
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With the stroke of a pen, online poker and gambling will become legal in Pennsylvania. The bill lies on a desk awaiting the signature of Gov. Tom Wolf, who has ten days to sign it.
On Wednesday, Oct. 25, after several years of tweaking and amending, the Pennsylvania Senate approved H 271 which legalizes online poker and online gambling in PA. Today, the House approved that bill by a vote of 109-72. All that remains for the bill to become law is for the governor to lend it his autograph.
Pennsylvania would become the fourth state to legalize online poker and gambling, following New Jersey, Delaware and Nevada. Estimates for additional government revenue brought in by this bill are around $250 million.
What the PA gaming expansion bill does
The bill would legalize online slot machines, online table games and online poker throughout Pennsylvania. It also regulates daily fantasy sports, sports betting (if federally legalized), online lottery, video gaming terminals at truck stops, and tablet gaming in airports.
It also authorizes up to ten satellite casinos, which are smaller template gambling centers set up in lower population zones. Additionally, the bill changes Category 3 licenses to remove the membership fee for a higher one-time fee. The government outlines its fiscal estimates on the bill here.
Online gambling licensing in Pennsylvania
After the bill is signed into law, the state’s existing 12 casinos would have 90 days to apply for a discounted license to operate all three forms online gambling (poker, slots, and table games). The discounted price is $10 million, which after 90 days increases to $4 million per license.
Only after the existing PA casinos decide whether or not to apply for a license can out-of-state entities apply to be an online gambling operator.
Will it get signed?
Pa Gambling Expansion Bill 2020
Wolf has historically maintained a cautiously open-minded approach toward online gaming legislation. But confidence is high that he will sign it.
His main hesitation has been that online gaming should not steal revenue away from Pennsylvania’s current legal casinos and gaming outlets. The bill’s tax rate would be 16 percent for poker and table games. Online slot machines would be set at 54 percent to match the current rate set for land-based slots in the commonwealth.
About those tax rates…
It appears legislators have come to an agreement that these are suitable tax rates that they believe will not impact local gaming businesses, but others disagree. Eric Schippers of Penn National, which operates the Hollywood Casino, has been quoted saying it is considering suing to stop the bill.
“We’re considering our legal options because this would have a uniquely punitive effect on our casino, more so than any other casino in the state,” Schippers said.
Penn National’s issue with the bill centers around the fact that the company believes satellite casinos will impact its business more than other casinos throughout Pennsylvania. In an earnings call Thursday morning, Schippers saw “significant flaws” in the bill, noting the 54 percent tax rate for slots.
“We’re going to have to weigh all our options, and we’re going to have to dissect the 970 pages and go from there,” Schippers said.
Other critics of the tax rate have come forward to say that if $10 million is the price tag, no one will pay it. With razor thin margins in New Jersey for online gaming, there are few if any who would risk $10 million for such a slow and uncertain return on investment.
With questionable trends in Pennsylvania’s slot machine performance, a high tax rate may not be the appropriate solution to declining revenues.
The journey begins for legal online gambling in Pennsylvania
Pa Gambling Expansion Bill Status
Time money will tell if the current tax rate will make sense for Pennsylvania. One thing is certain. If Wolf signs the bill, it will only be the end of the beginning of online gaming’s legislative struggle.