The Online Gambling Bills Are Piling Up In Pennsylvania

June 9, 2015
The Online Gambling Bills Are Piling Up In Pennsylvania

The Pennsylvania legislature seems determined to pass an online gaming bill this year, considering a powerful bloc of state senators are preparing to introduce what would become the state’s fifth online gaming bill of 2015, but the first to originate in the state senate.

On June 3, Senators Kim Ward, Robert Tomlinson, Elder Vogel, and Senate President Joseph Scarnati introduced a co-sponsorship memorandum for a bill that would reform gaming in the state, including the addition of online gaming.

“In the near future, we plan on introducing legislation, which would amend Title 4 (Amusements), Part II (Gaming), known as the Pennsylvania Race Horse Development and Gaming Act (Gaming Act) by providing for various enhancements and reforms,” the memorandum states.

Comprehensive online gambling would come to PA

On the iGaming front, the bill would allow “existing PA casinos to offer Internet gaming.” The bill is short on details, but the early language suggests both online poker and online casino games would be permitted.

Furthermore, the bill also calls on the Pennsylvania Gaming Control Board and the Department of Drug and Alcohol Programs to expand problem gambling programs in the state – which would likely be funded through a yearly stipend from the online gaming operators.

Most of the heavy lifting on this issue has been done by the House Gaming Oversight Committee chaired by Representative John Payne. The House GO Committee has hosted multiple hearings on online gambling and spoken with virtually all of the principles involved.

It would behoove the senate bill to adopt most of the language and policy points of Payne’s HB 649 iGaming bill, effectively incorporating HB 649 into the larger gaming reform plan.

One point of interest: Tomlinson has long been a proponent of higher tax rates for online gambling operators, something that could become a sticking point as the house and senate try to create a consensus bill.

A serious effort

As Chris Krafcik of GamblingCompliance noted on Twitter, this should be considered a very serious effort.

In addition to having the Senate President listed as a cosponsor, Ward has been calling for online gaming legalization since 2013, and Senator Tomlinson is a longtime supporter of the state’s casinos and spoke of iGaming expansion earlier this year.

What else the bill would do

In addition to legalizing online gambling the bill would also:

  1. Eliminate membership fees collected by Category 3 licensees (Resort Casinos) from patrons – a casino door charge of sorts. To offset the revenue loss the state would collect a one-time fee from each Category 3 licensee.
  2. Changes to the liquor laws that currently prohibit casinos from offering alcoholic beverages between 2AM and 7AM. Casinos would have to pay for this privilege, as a special permit would be created.
  3. Upon receiving a permit, Category 1 (Racinos) and Category 2 (Standalone Casinos) slot machine licensees would be authorized to place a limited number of slot machines at ancillary locations. This appears to be a way for casinos to lease their machines to bars or taverns in conjunction with the state’s small games of chance law.
  4. Reduce the number of days Category 1 licensees (Racinos) are required to hold live races.

Which bill will be chosen?

When examining the state’s proposals that address online gaming, two are more resolute efforts than the others.

This is the second gaming reform proposal in as many weeks in the Pennsylvania senate, but unlike Senator Sean Wiley’s problematic plan, the latest senate proposal seems more in line with the situation on the ground (and in the house of representatives), particularly when it comes to online gambling.

Among its many flaws, Wiley’s proposal was poker-only and called for an exorbitant tax rate (more on Wiley’s proposal).

There are three iGaming bills to choose from in the House of Representatives.

That being said, only John Payne’s and  Nick Kotik’s HB 649 seems to have any support, and seems to be the proposal the gaming industry in Pennsylvania is backing. However, HB 649 is a focused bill and could be rolled into the larger reform efforts being proposed by the state senate.

The other two bills in the house are either redundant or flawed:

  1. HB 920, introduced by Tina Davis, is nothing more than the reintroduction of her 2013 bill, which is simply a less polished version of HB 649. In addition to being dated, the bill also has fewer specifics than HB 649.
  2. HB 695, introduced by Nick Miccarelli, suffers from two fatal ailments. The bill would only legalize online poker and it includes bad actor language, which seems like a settled debate in every locale sans California.

It should be noted that in addition to sponsoring their own bills, Davis and Miccarelli are both cosponsors of HB 649.

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