Pennsylvania Renews Online Gambling Push

February 27th, 2015 | by Greg Shaun
State Representative John D Payne.

Pennsylvania State Representative John D Payne: “Regulating online gaming will … give Pennsylvania the opportunity to become a top competitor among its neighboring states in the gaming industry.”(Image:AP Photo)

Pennsylvania’s efforts to legalize online poker have resumed with the introduction of bill HB 649 to the legislature by State Representative John D. Payne.

Payne announced the bill on Wednesday, but his repeated use of the phrase “online gaming” lead most of us to believe HB 649 was a push to regulate both online poker and casino.

Clarification was only provided when the text of the bill was uploaded on Thursday.

Unlike its predecessor last year, HB 649 has no specific bad actor provisions, which would allow room for PokerStars to enter the market.

It’s also very open to the idea of liquidity sharing. The bill proposes that only the state’s existing gaming licensees would be eligible to apply for a license.

It suggests a tax rate of 14 percent of gross gaming revenue (one percent lower than New Jersey), and a licensing fee of $5 million, offering hope that a regulated and taxed online poker market could contribute millions to a cash-strapped legislature.

“We are currently facing a projected $2 billion budget shortfall,” said Payne. “I think it’s important we consider all responsible options to boost revenue before we consider asking our taxpayers for more money to fill that deficit.”

Poker-Only May Not Be Enough

A study commissioned last year suggested online gaming could be the largest new revenue source for Pennsylvania’s gambling industry, generating approximately $120 million for the first year. Since the online poker revenue figures in New Jersey were under 30 million for the first year, however, that would seem to be optimistic.

Pennsylvania would do well to look across the border to New Jersey, where online casino revenue is vastly outpacing poker. Until liquidity sharing provides large enough player pools to create a healthy online poker ecology in the US, new online gaming markets need to offer both online poker and online casino options in order to have a chance to thrive.

Meanwhile, Payne has promised that consumer protection will be the priority of the legislation.   “Right now millions of Americans, including Pennsylvanians, participate in illegal online gaming where no regulation currently exists,” he said. “By enacting effective state policy, we can help curb the illegal market while ensuring strong safeguards are in place to protect consumers.

Hearing Scheduled

“Regulating online gaming will also give Pennsylvania the opportunity to become a top competitor among its neighboring states in the gaming industry,” he added. “The implementation of legalized online gaming in Nevada, New Jersey and Delaware demonstrates the technologies exist to regulate Internet gaming safely and effectively. This legislation is the first step toward ensuring future growth as the industry expands.”

While land-based casino operators broadly support online poker in Pennsylvania, it has one very vocal opponent in the form of Sheldon Adelson, who’s LVS runs the Sands Bethlehem, one of the state’s most profitable casinos.

Meanwhile, the Pennsylvania House Committee on Gaming oversight is scheduled to hold a public hearing on the question of online gaming on April 16, to be chaired by Payne.

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