Pennsylvania Legalises Online Gambling

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Pennsylvania has become the fourth state in the US of A to say yes to online gambling. An amended bill was first passed in the State Senate. Then the bill was passed by the Pennsylvania House with a vote of 109 in favour and 72 against. There is one more hurdle to overcome. Bill H 271 has to be signed into law by state Governor Tom Wolf.

The bill covers the complete range of online gaming verticals. It will legalize online casino gambling, that includes slots machines and table games, and online poker within the state limits. But the lengthy bill includes provisions for daily fantasy sports, sports betting, lottery products, video gaming terminals at certain truck stops, tablet gaming at airports and up to 10 satellite casinos.

But everything is not hunky dory in H 271. The biggest anticipated hiccup is the tax rate on online slot machines. The bill proposes that these will be taxed at 54%. Many online gaming experts have opined that this rate is too steep to be viable. Some of them have pointed out that New Jersey, by comparison, has a 17.5% tax rate for online slots. Online table games and online poker in Pennsylvania will be taxed at a rate of 16% as per the provisions in the bill, which seems acceptable.

The law makers of Pennsylvania, it seems, want to discourage the citizens from taking to wagering on online slots. The H 271 bill allows for operators to purchase separate licenses for online slots, for house-banked games and for online poker. So if an operator feels that the tax rate for online slots is prohibitive, then he can go for licences for the other online gaming products only. A license for all three verticals combined can be purchased for $10 million by existing casino operators, provided the purchase is made within the first 90 days of the licenses being made available. Each individual license for the above products will cost $4 million.

PlayPennsylvania is a portal that tracks gambling in the state. It has projected $364 million in annual revenue for the state for the year 2022, with the bulk of it coming from online casinos. If bill H 271 is given effect this year itself, 2012 will be the fifth full year of legalised online gambling in Pennsylvania. The total tax revenue generated for the state in the five year period from 2018 to 2022 is $300 million.

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