Pa Gambling Expansion Bill
On October 26, the Pennsylvania House of Representatives voted to pass House Bill 271. The gambling expansion bill previously passed the Senate on October 25 and will now be sent to Governor Tom Wolf, who has a period of ten days to sign the bill, veto it, or let it become law without his signature. Pennsylvania’s state House has sent a gambling expansion bill to Gov. Tom Wolf’s desk — effectively finishing the budget lawmakers have labored over this entire fiscal year, four months past the due date. The long, complex measure prompted hours of debate over the course of two days. Highlights of Pennsylvania’s casino gambling expansion bill By The Associated Press October 26, 2017 GMT A newly unveiled measure to expand casino-style gambling in Pennsylvania — already the nation’s No. 2 commercial casino state — is on the move in the Legislature in a bid to help the state government plug its biggest cash shortfall. November 14, 2017 – Alerts Gaming Alert On October 30, 2017, Pennsylvania Governor Tom Wolf signed House Bill 271 into law as Act 42. The law amends the Pennsylvania Race Horse Development and Gaming Act. A 675-page Pennsylvania gambling expansion bill took just hours to make its way through the House of Representatives, causing some legislators to bristle at its speedy passage.
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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
Pa Gambling Expansion Bill List
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?
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
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.
A newly unveiled measure to expand casino-style gambling in Pennsylvania — already the nation’s No. 2 commercial casino state — is on the move in the Legislature in a bid to help the state government plug its biggest cash shortfall since the recession.
The heavily lobbied legislation emerged from behind closed doors Wednesday night as part of wider budget negotiations, after competing measures passed the House and Senate in the last five months. It involves a jumble of concepts that offer a combination of license fees and taxes on new gambling losses. The Senate passed it, 31-19. The measure requires approval by the House and Democratic Gov. Tom Wolf. Here is a look at some of the elements:
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SATELLITE CASINOS
Each of Pennsylvania’s 10 larger casinos would be able to bid on a satellite casino license allowing up to 750 slot machines and 30 table games at a facility that is not within 25 miles of another casino. Bidding starts at $7.5 million, with a table games certificate costing an extra $2.5 million. License fees and taxes on gambling at the sites would go into the treasuries of local and state governments, as well public schools and economic and civic development projects.
Pa Gambling Expansion Bill Online
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GAMBLING AT TRUCK STOPS
Qualifying truck stops could operate up to five slot machine-style video gambling terminals. The revenue would be split between the state, the license holder, terminal operators and host counties and municipalities.
Pa Gambling Expansion Bill Status
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ONLINE GAMBLING
Licensed commercial casinos, both in Pennsylvania and beyond, can apply to the Pennsylvania Gaming Control Board to operate casino-style gambling on websites and mobile applications to people in Pennsylvania. A license fee of up to $10 million would be necessary to operate a website. Gross revenue from gambling on online slot machine-style games would be taxed at a 52 percent rate, while online table game revenue would be taxed at 14 percent. Just three states — New Jersey, Delaware and Nevada — allow online casino gambling.
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LOTTERY
The Pennsylvania Lottery would be able to offer keno and feature online games, including its existing games, instant tickets and raffle games. The proceeds would go into the state Lottery Fund, which subsidizes programs for the elderly. The lottery would be prohibited from operating casino-style games online, such as poker, roulette, slot machines and blackjack. Four states — Georgia, Illinois, Kentucky and Michigan — allow online lottery play, according to the National Conference of State Legislatures.
Pa Gambling Expansion Bill Vote
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LOCAL SHARE
Casinos would be required to pay millions of dollars annually to their host communities, reinstating a mandate struck down by the state Supreme Court last year because it treated casinos differently. The requirement had meant about $140 million that Pennsylvania’s casinos pay annually to local government budgets, institutions and projects in Philadelphia and 11 counties.
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AIRPORT GAMBLING
Casinos could seek approval to operate an interactive gambling parlor at an international or regional airport in Pennsylvania, with an agreement from the airport authority. The machines would be accessible only to ticketed passengers and license fees would be required. Eligible airports are: Philadelphia; Pittsburgh; Erie; Wilkes-Barre/Scranton; Lehigh Valley; Harrisburg; Arnold Palmer Regional Airport; and University Park Airport in State College. Taxes on airport gambling revenue would go to the state and local governments.
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FANTASY SPORTS
Daily fantasy sports betting in Pennsylvania would become regulated and taxed in Pennsylvania. Fantasy sports operators would have to pay a $50,000 license fee and a 15 percent tax based on in-state participation. Applicants would have to verify that players are at least 18.
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SPORTS BETTING
Casinos could apply to the Pennsylvania Gaming Control Board to offer sports betting at the casino or online, should it become legal under federal law or under a federal court ruling. A license would be $10 million.
Pa Gambling Expansion Bill Check
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RESORT CASINOS
Resort casinos — Valley Forge Casino in suburban Philadelphia and Lady Luck Casino Nemacolin in southwestern Pennsylvania — can pay a $1 million fee to be relieved from requirements in the original 2004 casino law that gamblers must also take part in other amenities at the establishment.
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CASINO OWNERSHIP
A 2004 provision limiting ownership of casinos to no more than one controlling stake in one casino would be repealed.
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Pa Gambling Expansion Bill Passed
Source: Pennsylvania Senate Republicans.