Pennsylvania Online Poker Bill Details

The Pennsylvania online poker bill has been released. The sponsor is State Sen. Edwin Erickson.

Sen. Erickson acknowledges in the bill that Pennsylvania players are already playing at offshore sites. It also states that poker is different than casino games that are banked by the house. This language supports the position in the bill that online poker should be legalized, while casino games would be limited to live casinos.

The Pennsylvania online poker bill includes bad actor language. It would exclude any company that accepted wagers in violation of the UIGEA after December 31, 2006. Excluded items include, “any trademark, trade name, service mark or similar intellectual property that was used to identify any aspect of the Internet website”.

The Pennsylvania poker bill would exclude assets if acquired by a company that would otherwise be found suitable. This would prevent mergers that involved excluded companies in an attempt to enter the Pennsylvania market through a back door.

This language would appear to exclude PokerStars, a company that is having a public battle over similar language in California poker bills.

While the bill would remove some of the suitability discretion, it does acknowledge that the Pennsylvania Gaming Control Board is qualified to carry out other regulating duties:

The Commonwealth has entrusted the control and regulation of casino gaming to the Pennsylvania Gaming Control Board for the past seven years, and, based on this experience, it is now appropriate to delegate the responsibility for the implementation and regulation of interactive gaming to the board.

A significant vendor license would be required for all companies that are not live casino operators. Significant vendors would include companies that provide software, trademarks, and customer databases. The bad actor clause would also apply to significant vendors.

The licensing fee for operators would be $5 million. The tax rate would be 14 percent. The licensing fee for significant vendors was intentionally left blank.

The bill explicitly allows interstate compacts. It specifically bans establishments that open for the sole purpose of allowing online access for poker.

There are two clauses that pertain to unlicensed gaming. Offshore sites that offer Pennsylvania players any form of online gambling would still be required to pay the 14 percent tax rate. This does not provide immunity from prosecution for the illegal gambling. It would prevent a state tax evasion charge.

The first offense for offering unlicensed gambling for an individual is a first degree misdemeanor. All subsequent offenses would be second degree felonies. Fines start at $75,000 on the first offense for companies found guilty of offering Pennsylvania player any form of illegal, unlicensed online gambling.

There is also a clause that pertains to players. Any funds derived from winnings at unlicensed sites are subject to forfeiture. All cash forfeited by Pennsylvania players would go toward problem gambling funding.

An online poker hearing is scheduled for June 3.

Update: It appears that a Pennsylvania House companion bill will be submitted soon with similar details.