Pennsylvania Rep. Introduces Poker-Only Online Gaming Bill

Steve Ruddock February 26, 2015 680 Reads

The latest effort to legalize online gambling in Pennsylvania will be spearheaded by State Representative John Payne (R-106) who formally introduced his online gaming bill, HB 649, on Thursday.

As we noted earlier this week, Payne will also chair an online gaming hearing in the House Gaming Oversight Committee on April 16.

As it is currently written, HB 649 would authorize online poker in Pennsylvania, not online casino games. This is both a surprising, and not so surprising development.

Caesars called for poker-only approach in 2014

At a Senate hearing in June of 2014, Michael Cohen of Caesars Acquisition Company intimated that the company would be advocating for a poker-only approach in Pennsylvania, leaving the door open for later expansion into other forms of online gambling. Cohen limited his pro-legalization comments at the hearing to online poker.

When asked why they were interested in a poker-only approach Cohen told the Community, Economic and Recreational Development Committee:, it was a way to “dip their toes,” and that online poker would be a good “first step” in the process.

Caesars was also rumored to be the driving force behind State Senator Edwin Erickson’s 2014 bill that sought to legalize online poker. The key difference this time around is Payne’s bill would not prohibit PokerStars from applying for an online poker license.

The continued poker-only approach, and the absence of “Bad Actor” language leads me to believe Caesars is also behind this bill, considering that just a few weeks ago Caesars and PokerStars agreed to set aside their differences and work together to expand online gaming in the U.S., while simultaneously fighting against Sheldon Adelson’s efforts to ban online gambling.

To pass it will likely need to be amended

If the bill has any chance of passage it will almost certainly need to include casino games.

Without the revenue of online casino games,  online gambling expansion will be a hard sell in the PA legislature.

In New Jersey online casino accounted for more than 3/4 of the $123 million in gross gaming revenue (GGR) the state’s online gaming operators generated in 2014.

Considering the total gaming revenue in New Jersey has been widely criticized as disappointing, expecting PA lawmakers to vote for a gaming expansion measure that preemptively limits revenue to about 1/4 of its total potential seems more like wishful thinking.

With a poker-only approach PA would bring in about $30 million in GGR annually, of which the state would receive 14%, or about $4.2 million. This seems like a fool’s errand for a state facing a $2 billion (that’s billion with a B) budget shortfall, particularly when gaming expansion is primarily being considered for its fiscal impact.

That being said, HB 649 could quickly change from a poker-only bill to a comprehensive gabling bill by changing just a single word in the definitions section – changing the definition of Authorized Games from Poker to Gambling – as every reference in the bill is to Interactive Gaming, not as Interactive Poker.