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Horrendous Tweets for Pennsylvania’s Online Gaming Future Emerge

Published on by Adam

Horrendous Tweets for Pennsylvania's Online Gaming Future EmergeIf you’re beginning to feel lost for words with regards to Pennsylvania’s online gambling future, you can feel a slight respite in knowing that you’re not the only one. Netent Casino has been bringing you updates, both good and bad, regarding PA’s iGaming future for a while now, and it’s been a topsy-turvy flow of events. One day, it seems as though real progress is being made for online gambling in Pennsylvania, such as the news a couple of weeks ago that Republican George Dunbar had, effectively, wiped the slate clean, allowing the state to have full flexibility.

This was in complete contrast to just over a month prior when we were notified of a filed house bill which aimed to strike down iGaming in PA before it had even begun – discarding potentially a billion-dollar market in the process.

We’ve had a lot of tos and fros ever since, with adjustments being made to proposals in an attempt to find a middle-ground. While there is no doubt that certain Pennsylvanian politicians are hell-bent on crushing our beloved online entertainment before it’s even begun, there are mutterings that a different approach is being taken.

The above report which outlined Pennsylvania’s potential repeatedly insisted that a reasonable tax rate was essential. To give you an idea of what pro-online gambling activists were hoping for, neighbouring New Jersey’s tax was set to 15%. The author of the Play Pennsylvania report suggested 20% would certainly be acceptable, yielding an expected $295.8million to boost the state’s coffers – something which is badly needed, by the way.

However, in the last few days, tweets from a Gambling Compliance research director have suggested that the 25% tax rate put forward in SB 524 is the least of Pennsylvania’s problems – starting with this…

A 54% Online Casino Tax in Pennsylvania… Are You Serious!?

Unfortunately, if Chris Krafcik’s Twitter feed is accurate, then the state may be leaning towards a tax that goes far beyond damaging, instead reaching outright destructive. Not only would a 54% tax on casino slots and table games be more than double the frowned-upon 25% suggestion, it would also be higher than current land-based casino rate.

Currently, brick-and-mortar gambling establishments are charged 54% for slots and 16% for table games, whereas this potential proposal would see a flat 54% set for both. Incidentally, if this were to come into law, it would take the record for the highest online casino tax rate anywhere in the world.

Why the Whole Tax Argument Continues to Frustrate

First of all, if you’re wondering why we’re advocating for a lower tax rate, just take a look at this data. If Pennsylvania implemented the 20% suggestion from the given report, it is thought that a total of $364million would be generated by 2022.

However, a mind-boggling 54% rate would see online casinos cut back on pretty much everything – marketing, number of games, offers and promotions, player returns. Furthermore, that’s just the few operators that would even bother to apply, as another Mr Krafcik tweet suggested the eligibility list was slimming.

The age-old but much defunct argument in favour of these rates is that lower online gambling tax could impact upon land-based earnings. Players will move away from brick-and-mortars to online, they say. However, there is plenty of evidence to indicate that this would not happen in any way, with New Jersey again being the perfect case study.

What Other Damaging Aspects Have Been Unearthed from Mr Krafcik’s Tweets?

After the insane tax rate, we’re afraid we’re not done with the bad news. We just touched on it above, but the likelihood that many online casinos would apply for a Pennsylvania license under these conditions are slim – and that’s only going to hurt the state.

Play Pennsylvania projected a $126million instant injection from licensing fees the year online gambling in PA was legalised, and this comes from a more expensive license than the $5million being mooted now. The reason the cheaper licensing fee falls down is due to the fact that the state will not sell 10 poker license and are very unlikely to see 10 casino licenses. Again, the 54% tax rate comes back to haunt us.

Will Online Gambling in Pennsylvania Ever Happen?

We should be quick to note that, while these tweets are unequivocally concerning, they’re not yet confirmed by the authorities. We can only hope that Mr Krafcik’s sources are wide of the mark, and the Pennsylvanian authorities release a statement tomorrow expressing their delight for a 20% (or lower) tax rate. Okay, we’re probably in dreamland with that one, but surely some form of argument needs to be made against these new proposals if they’re true.

You can follow any updates on online gambling in Pennsylvania using our dedicated timeline, but for now, we’ll leave you with one final tweet that really hammers this bitter point home.

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