Pennsylvania Online Casinos – OnlinePokerReport.com

Pennsylvania isone of the most likely candidates to become the fourth state in the US to offer legal online poker or casino games.

Read on for the latest news and analysis of the developing situation for regulated online gambling in PA. Scroll below for a synopsis of the status quo and background on efforts to bring legal gambling sites to Pennsylvania.

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Pennsylvania has taken multiple looks at online gambling, and gaming reform in general, during the 2017 session.

Gaming reform remains a contentious issue in the state, with legislators divided on what reforms to legalize and how to implement them.

Among the most hot topic debates are:

In the coming weeks and months, Pennsylvania lawmakers are expected to debate these issues, and (hopefully) reach some sort of consensus on gaming reform and the pressing local share tax issue.

There are currently 12 land-based casinos in Pennsylvania. Only one Sands Bethlehem will almost definitely abstain from online gambling. Or at least it will, unless it is acquired by MGM Resorts.

The rest are likely to either be enthusiastic or reluctant participants in the industry. Some, such as Mount Airy Casino, Parx Casino, andValley Forge have already forged online gambling partnerships.

Combine these fees with the proposed $2 million fee charged to significant vendors, and its easy to see the industry filling the $100 million earmarked by Gov. Tom Wolf for gaming reform in FY 2016/17. Internal projections have the final estimated upfront licensing fees at $126 million.

But the real question is: Once they collect fees, how much tax revenuewill the industry generate on a recurring basis?

The bestmeans of answering that question is to look at the performance of the regulated NJ online gambling market.

In its first full year (2014), the NJ industry generated nearly $123 million in gross gaming revenue.Using this figure as a baseline, and accounting for PAs larger population, we arrive at an estimate of $176 million. At a 20percent tax rate, thats $35.2 million in first-year tax revenue.

In reality, that figure stands to be much higher.Improvements ingeolocation technology,payment processing, and other areas willprovide Pennsylvania operators with luxuries that werent available in NJ at launch.

Accounting for this, it wouldnt surprise if Pennsylvanias first year was nearly as strong as NJs third (2016).

NJ generated nearly $197 million in online gambling revenue for 2016. If PA enjoys nearly as muchsuccessin its first year, online gambling revenue will top $230 million,rising to $364 million by year five.

Of course all efforts may be for naught if lawmakers insist on a 54 percent tax rate for slots, which could kill the industry before it finds its footing.

Pennsylvania has a booming land-based casino economy, but rising competition from neighboring states threatens to put a dent in the industrys margins. The state is trying to remain competitive.

Any online poker bill that makes its way to the Governors desk is likely includeonline casino games and other reforms. Although the presence of multiple reforms and the recent tax rate debatecomplicates the equation, theres still a fair chance Pennsylvania players will be playing on legal online poker sites within the next 12 18 months.

Presumably, yes. All bills to date have included online casino.

Its worth noting that online casino is a much bigger revenue generator in NJ than online poker games. It accounts for over 85 percent of annual industry revenue.

Under the provisions of all proposed legislation, land-based casinos would operate online poker and casino sites. License holders wouldhave to pay a fee between $8 10 million, and significant vendorsa $2 million fee.

The possibility is there. Certainly, New Jersey would likely be interested in forging an interstate online poker network with Pennsylvania. PA is roughly 1.5 times the size of its east coast neighbor, and will presumably make use of some of the same operators.

You wont have to hold residence in Pennsylvania to play at the states regulated sites. However you will have to be physically located within its borders.

For a time, it looked like Pennsylvania was a slam dunk to legalize online gambling in 2016. Those hopes were dashed when the Senate failed to reach a consensus before the last scheduled session day.

After a strong but ultimately fruitless push in 2015, the latest legislative effort started off with more of a whimper than a bang. It wasnt until late May that the wheels began turning. Thats whenthe House of Representatives consideredtwo gaming reform amendments. This amendments, if passed, would become part ofa separategaming bill, HB 1925.

The first, A7622, packaged online poker/casinoand other reforms alongside the inclusion of video gaming terminals (VGTs) at non-casino locations. The other, A7622, was a mirror of Rep. John Paynes omnibus gaming reform bill (HB 649) from the year prior, and did not include VGTs.

Confusion ruled the day, and both amendments were soundly defeated.(Although the margin of defeat for A7622 was significantly smaller.)

Momentum shifted to the side of online gambling proponents in late June. Thats when a new, multifaceted gaming reform bill that linked online gambling, daily fantasy sports, and other gaming reforms emerged in the House.

An amendment to allow VGTs nearly derailed the bill, failing by a vote of 118-79. But a last-minute amendment by Rep. Rosita Youngblood (the aptly titled Youngblood Amendment) calling for the exclusion of VGTs, turned the tide. The amendment ultimately passed 115-80.

In the week that followed, HB 2150 saw a whirlwind of activity. This culminated in thebill clearing a vote in theHouse.

In July, Governor Tom Wolf allowed a $1.3 billion revenue packagethat earmarked $100 million forgaming reform, to become law. All indications pointed to licensing fees from online gambling operators would be counted on to fill the gap.

Unfortunately, the Senate signaled that it would not be addressing online gambling legislation until the fall. In the interim, the legislature raised taxes on casino table games, while online gambling advocates spoke up about the need to pass legislation sooner rather than later.

Online gambling first appeared on the legislatures radar in April 2013, when State Rep. Tina Davis introduced HB 1235. The bill would permit both online poker and casino within the commonwealth. It also set operator licensing fees at $5 million, and called for a 28 percent tax rate on gross gaming revenue.

By June of this year, a general lack of interest among lawmakers resulted in the House Committee on Gaming Oversight chair Tina Pickett recommending the bill be stalled until 2015. But it wouldnt take nearly that longfor the ball to begin rolling again.

In December 2013, the Senatetook a mammoth step forward when it passed SR 273. The resolution tasked Econsult Solutions with conducting a study that would measure the economic impact of online gambling.

The results were published in May 2014, and were cause for optimism. Econsultestimatedthat online gambling would yield $68 million in first year tax revenue, and $110 million annually going forward.It also concluded thatonline gambling would have a complementary impact on land-based casino revenue.

Granted, the revenue estimates are alwaystaken with a massive grain of salt, as they presumed a blended 20 percent tax rate on online poker and 60 percent on slots.

In either case, the results provedfavorable enough for State Sen. Edwin Erickson to introduce a new online gambling bill (SB 1386) in June 2014. There was little actionon that particular bill, but it set the stage for what would prove a very active 2015 session.

Rep. John Payne introduced HB 649 in February 2015. Payne viewed online gambling as part of the solution to the states projected $2 billion budget shortfall. Hebacked his beliefs by championing online gambling legislation efforts for the next two years.

In the spring of 2015,two competing bills emerged in the House. One, HB 920, was from Tina Davis, a near replica of her 2013 bill. The other, Nick Miccarellis HB 695, was an online poker only bill. Of the three, Paynes becamethe most likelycandidate for serious consideration.

Ahead of the June 30 budget deadline, there was the introduction of a fourth bill this one from the State Sen. Kim Ward. SB 900 wassignificant in that it marked the Senates official entry into the conversation. Unfortunately, SB 900 was radically different than HB 649. It calledfor a 54 percent tax rate, a $10 million operator licensing fee, in-person registration, and the exclusion of Category 3 casinos.

Suffice it to say, the rigid nature of SB 900 would make it so license holders would have trouble operating profitably.

The Senate held two hearings on online gambling in June 2015. After thatlittle was heard on the topic until the fall. In October, Pennsylvania was still in the midst of a budget stalemate. When Gov. Tom Wolfs tax plan sawdefeat in the House, he becamewilling to discuss new revenue sources, online gambling among them.

The following month, the GO committee passed HB 649 by a margin of 18-8. This markedthe first time an online gambling bill passed a vote in Pennsylvania. But by then, an omnibus package was attached to the bill. It calledfor slot machines at non-casino venues and airports, Category 3 casino expansion, and a report on daily fantasy sports, among other reforms.

Its believed that the controversial elements of the bill, namely allowing video gaming terminals at non-casino locations, was one of the reasons efforts stalled in 2015.

Pennsylvania is currently home to 12 land-based casinos. Together theycreate the second-largest gambling economy in the United States. Hard to believe that just over a decade ago the industry was non-existent.

The ball got rolling in 2004, whenlawmakersauthorized 61,000 slot machines at existing horse tracks, resorts and slot parlors. Concurrently, the state set up thePennsylvania Gaming Control Board.The Board would issue up to 14 licenses, and provide regulatory oversight for the nascent industry.

On December 20, 2006, six licenses for existing horse racing venues and five more for standalone casino were awarded. Of the 11 licensed operators, 10 opened or expanded their facilities by 2010. And by 2011, two Category 3 casinos Valley Force Casino Resort and Lady Luck Casino Nemacolin had also flipped over the open sign.

The industry took a monumental step forward in early 2010, with the legalization oftable games including poker at slots casinos. By July 2010, top earners Sands Bethlehem, Parx Casino, and Harrahs Chester (later rebranded as Harrahs Philadelphia) had all instituted table games.

It was then that land-based casino revenue really began to take off, growing from $1.62 billion in 2008, to $2.49 billion in 2010, and $3.16 billion in 2012.

For fiscal 2015-16, PA recorded $3.2 billion in revenue a record high.Since, the industry has mostly stabilized,and is even beginning to show a few chinks in the armor.

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Pennsylvania Online Casinos - OnlinePokerReport.com