The battle of legalising online gambling in Pennsylvania

Published on November 10, 2016 in Industry News

Online casino bill in PennysylvaniaState House Representatives of Pennsylvania passed a gambling bill last week Thursday; the House Bill 1887 was passed with a 108 to 71 vote. The bill is primarily sponsored by Rep. Jason Ortitay and legalises and regulates online gambling and daily fantasy sports in the Commonwealth.
 

“The Senate vote will have to wait a couple of weeks as they are already on an election break and will only reconvene on the 15th of November.”

The Poker Players Alliance Executive Director John Pappas expressed gratitude towards the House for their given support towards online gambling and also taking up “the critical local share tax issue”. Pappas then said the Senate should take immediate action and that “there is no policy or political justification” for them to delay their vote. He also concluded that every passing day without protection leads to vulnerable consumers and revenue left unprotected on the table.
 

Filling a Budget Gap

Internet gambling will be used to fill a $100 million gap in the next financial year’s budget. One could argue that the only reason online gambling has been allowed in Pennsylvania is because of the mass amount of revenue it could generate.

The House tried to include the expansion of slot machines into the state’s airports but the Senate was firm in opposing it. The Senate argued that allowing this could steal business from the twelve US casinos that are already available in the state. The House agreed to remove that part from the bill as they understand that airport slots might cause stress for local casinos.

The most important part of the legislation was fixing the casino “host payments”, after it was declared unconstitutional by the state Supreme Court just over a month ago. There are 9 non-Philadelphia casinos that were told to pay a “local share assessment” of either 2% of “gross terminal revenue” from their slot machines or a massive amount of $10 million per year. This arrangement is unfair as it creates different tax rates for each casino as it depends on how much slot revenue they generate. None of the Pennsylvania casinos generate $500 million in slot wins so they are left to pay the $10 million assessment.
 

Unfair Treatment

The owner of Mount Airy Casino & Resort in Monroe County had enough of unfair treatment and sued the state. The Supreme Court sided with Mount Airy and agreed that the inequality of the tax rates is not constitutional. 

The Supreme Court acknowledges however that the “local share” helps the casino’s host communities and is already factored into municipal budgets. This is why the state legislature has been given 120 days to rework the rules. The House is confident that they have succeeded in doing so through this bill.

The vote was incredibly hard as both options had negative consequences attached to it. Voting for it went against Sands Casino Resort Bethlehem – the one casino completely against online gambling and pays tax without complaints. Voting against it would results in the loss of millions in the Lehigh Valley’s town biggest cities.