In news that is sure to be welcomed by the gambling industry in Pennsylvania, State Senator Jay Costa (D) recently issued a Senate Co-Sponsorship Memorandum. It introduced a bill that will make online gambling legal and regulated in the Commonwealth.
The industry was greatly disappointed in 2016 because its high expectations of getting online gambling and poker legalized came to naught. A gambling bill had indeed passed the House of Representatives but it was stalled in the Senate. Pennsylvania already has a very thriving land based gambling industry that brings in a lot of employment and tax revenues. Many lawmakers in the state have expressed desire to legalise gambling. But they were not able to come to a consensus regarding certain issues. This is why the bill was not able to become law. Incidentally, the Pennsylvania government is facing a budget deficit of $100 million. The defecit could possibly have been covered by revenues from online gambling.
Details of the Pennsylvania Memorandum
Senator Costa’s Memorandum seems to cover all important aspects of online gambling. For one, it proposes to allow all casino games on the internet. Casino operators in Pennsylvania would be permitted to apply for licenses at $10 million each. Vendors of gaming platforms would have to pay a $5 million license fee to operate in partnership with any of these companies. All of these fees would be paid into the state’s General Fund.
Furthermore, operators would have to bear a 25% tax on gaming revenues. The tax will be used to contribute to the Property Tax Relief Fund and the Commonwealth Financing Authority. In addition, casinos will not be permitted to allow internet gambling on their premises. This is necessary to prevent casinos from avoiding taxes. However, they can permit guests to sign up for online accounts. Moreover, operators would be permitted to place tablet gaming devices at the Pittsburgh and Philadelphia airports. This for a licensing fee of $2.5 million and 25% tax.
Senator Costa Keeps Mum About the Pennsylvania Gambling Bill
Senator Costa has chosen to keep people guessing about when he plans to introduce the bill. However, he did indicate that he would release it in the near future. Senator Costa indicated that his proposed legislation has borrowed much from HB 1887. It’s the ill-fated House Bill that did not receive any support from the Senate. He said that the law would ensure that no operator would feel left out. They would all get an equal opportunity to be part of the lucrative online gambling industry.
The Senator also said that a sensible gambling law is very necessary to reduce the fiscal strain on the state’s economy. He was specifically talking about the State Lottery Fund. The fund is struggling to remain solvent at present. This is going to be a major problem for senior citizens if it is not addressed at the earliest.
Heavy Tax Burden on Pennsylvania Operators?
Gambling operators are eager to get into the action. But they are uniformly unhappy about the proposed tax structure because it will cut into their profits tremendously. Besides, there is talk that operators of land based casinos will still have to pay $10 million every year. This is in form of host fees to their local administrative areas such as municipalities or counties. This local share provision has been a very contentious issue within the industry. They were very happy when it was struck down as unconstitutional by local courts.
It’s clear that Costa’s proposal is skewed heavily to the advantage of the state. But it’s the best hope that gambling operators have at present to take their business online. The next few months will definitely be significant for gambling in the state.