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Online Gaming in Pennsylvania Passes Senate – But Not as We’d Hoped

Published on by Adam

Online Gaming in Pennsylvania Passes Senate – But Not as We’d HopedBack in what seems like a much simpler time for the Pennsylvania online gaming saga, we serialised a report by Play Pennsylvania which outlined how the Keystone State would benefit from a regulated iGaming market. Within the last few hours, it has been brought to Netent Casino’s attention that the PA Senate for Community, Economic & Recreational Development Committee voted in favour of HB 271 – but with a hugely damaging amendment of a 54% online casino tax.

We’d gotten word of this at the beginning of the month when tweets from Gambling Compliance researcher, Chris Krafcik, first suggested that this astronomical rate would be used. Unfortunately, it appears Mr Krafcik was spot on.

Amended HB 271 Passes with 54% iGaming Tax Attached

While we admit that we’re happy to see any sort of progress with regards to legalising internet casinos in Pennsylvania, the numbers do leave a sour taste. Senator George Dunbar drafted HB 271 in the hope of finally dragging this topic forward, but that selfless act has come at a price.

Let’s take a look at the actual figures included within the amended HB 271 bill:

  • A higher tax rate on online slots and table games than land-based casinos (they tax slots at 54% and table games at just 16%)
  • A 16% rate applied to online poker, or peer-to-peer gaming as it’s called, which matches brick-and-mortar’s. Considering this area hasn’t exactly taken off in New Jersey compared with online casino entertainment, it’s unlikely that operators will plump for poker only.
  • A total of 12 licenses for both internet casino and poker would be issued, although many land-based operators have already dismissed applying, while the high tax rates aren’t exactly appealing for new parties

From a player’s perspective, the high tax rates would likely impact the casino deals and promotions that operators would offer as they’d be forced to make cut backs. Again, this is hardly preparing the incoming iGaming industry with a fruitful framework.

What Happens Next?

The bill has been approved by the full Senate and is now in the hands of the House. A timeline on Pennsylvanian online gambling’s next move is anyone’s guess, but we do still hold out some hope when it does…

Pennsylvanian Pro-iGamers Aren’t Down and Out Yet!

As the House has been more reasonable with certain aspects of internet gambling in the past, we’re crossing our fingers for a few changes to be made to HB 271. For anyone who doesn’t have a grasp of the state’s laws, the bill isn’t yet set in stone and can be changed.

Therefore, it is hoped by iGaming supporters that the House will take a more structured view on the tax issue and attempt to negotiate a work-around. Whether this is found by directly lowering the tax rate, dropping the licensing fee, or another solution remains to be seen, but we’re still optimistic that some form of compromise can be found.

However, whatever is proposed is almost certain to be higher than the original report’s suggested 20% GGR. Play Pennsylvania precited a $1.4bn market if their assessment was followed, but now the industry’s maturity is up in the air.

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