Earlier this week, Pennsylvania Senate and House of Representative passed H 271 bill which is set to legalize online gambling within the state borders. We are keen to set things straight and figure out what is the future of online gambling in Pennsylvania.
Online Gambling Background In Pennsylvania
Since 2013 Pennsylvania legislators have tried to legalize online gambling inspired by the revenues New Jersey has enjoyed from online gambling industry tax revenues. However, the first bill turned out to be only the beginning of the road as it was killed in the committee hearings. It was not until 2015 when Rep. John Payne. Became a Gaming Oversight Committee Director. As a strong advocate for online gambling John Payne ignited a legislative process once again, however it wasn’t meant to be for the next 2 years, as politicians came up with new reasons to avoid PA online gambling bill passage.
Political turmoil and budget hole in 2017
After Senate voting 31-19 in support of the bill and Pennsylvania House voting 109-72 in favor of the bill, it is up to governor Tom Wolf to act on the bill. Earlier this week it was expected, that Wolf will sign the bill. However, rumors have questioned governor’s intentions and some insiders believe that Wolf is not going to sign it. In this case, the bill becomes automatically a law on Nov 5th. If interested you can go through the actual copy of the bill
Where is the rush coming from? Currently, PA legislators are struggling to cover 2018 budget deficit and hoping to raise additional funds from online gambling legalization for 2019 state budget.
What is going to happen next?
If the bill becomes a law(at this point our insiders are telling us it is going to happen), online gambling provisions of the bill become effective only 60 days after the approval.
Afterwards, PA Gambling Control Board will start accepting applications for online gambling licenses(there are 3 categories of license in total) from existing casino owners. Casino operators have an exclusive 90-day window where only current holders of the existing gambling license are allowed to apply for an online gambling license. Afterwards, other entity can apply for a license.
It is not clear how fast the bill will be launched since there are many equivocal dates left for individual interpretation in H 271 bill, however there 2 things suggest that everything is going to happen rather fast.
- Pennsylvania fiscal year ends in June, therefore politicians expect to collect tax from online gambling revenues prior the end of the fiscal year. Keep in mind that this bill was drafted to cover a 2018 state budget hole. In the beginning of the October, online gambling bill appeared to be dead in the PA Senate. However, when budget talks fell through, as politicians struggled to cover 2018 budget deficit, H 271 bill was taken from ashes and approved in both houses in 18 hours.
- New Jersey took 9 months from bill passage to the launch of the first legal online casinos, therefore we can expect PA legislators to fast-track NJ timeline and launch the legislation faster than their neighbors.
When will officials start accepting online gambling license applications?
There’s no strict deadline specified in the bill but our insiders believe that it is rather sooner than later. The entire state government in under the pressure of a budget deficit, therefore there is a desire to put license fees under the belt of 2017 budget, henceforth Pennsylvania Gaming Control Board will be under pressure to grant licenses prior June 2018 (end of 2017 fiscal year in PA)
njnodeposit prediction: we expect the launch of the first online gambling casinos by the middle of 2018.
What exactly does the bill bring to the PA gambling table?
- Bill regulates daily fantasy sports-We all have waited for it!
- Regulates sports betting on the state level. Sports betting is illegal in the US, therefore this part of the bill becomes active only if sports betting becomes legal on a federal level.
- Legalizes the sale of lottery products online. Now you can play loto in front of the computer or from a mobile device.
- Legalizes computer gambling in qualifie PA airports.
- Allows gambling terminals at highway truck stops
- Provides land for new 10 mini-casinos. Mini-casinos can have up to 750 slot machines and up to 30 tables for games including poker
The bill provides equal gambling opportunities to those of New Jersey, therefore Pennsylvania residents don’t have to travel anymore when interested in online gambling.
Future of legal online gambling in Pennsylvania: FAQ and expert predictions.
At this point, we can try to predict the future of legal online gambling in Pennsylvania and answer some of the most frequently asked questions
1. How many new sites can we expect and who will operate them?
Currently, there are 12 legal casinos in Pennsylvania, therefore we can expect at least 12 websites in the near future. Some may argue that not all of the existing gambling license holders will take advantage of it, but it will be a really ridiculous step for gambling sharks to refuse such opportunity, considering that their NJ relatives even offer bonus money for online gambling.
Keep in mind that there is no clear restriction on the number of brands that can operate under single online gambling license, therefore minor casinos can partner up with the sharks in order to clinch a part of the online gamlbing market.
Njnodposit prediction: there will be around 20 online gambling websites.
2. Who currently holds PA land-based casino licenses?
- Mohegan Sun
- Sands Bethlehem
- Lady Luck
- Valley Forge
- Mount Airy
- Presque Isle
We can expect these folks to be the first to clinch Pennsylvania’s online gambling licenses but they will also have to pay for their pole position.
3. What are Pennsylvania online gambling license fees?
- During the first 90 days, casinos will have to pay is $10 millions for a bundle of 3 gambling licenses(either take it or leave it).
- After the “window closes” there is a 30-day window that will have $4 million per online gambling license but only available to the established casinos
- Afterwards, any legal gaming entity can apply for the remaining license at the same $4 millions per 1 license in each category.
4. Who is included in “legal gaming entity” definition
The bill rhetoric is redundant on this topic and specifies a lot of provisions that interested entity have to supply. It is clear that operators of legal land-based casinos in Pennsylvania fall under this category. However, what is clear is that in order to apply for a Pennsylvania online gambling license an entity does not have to operate a land-based casino in the state. Therefore as the 120-day window elapses, “newbies” are more than welcome to join the party.
5. Who will be able to play?
Everyone who is located within the borders of Pennsylvania and has reached the age of 21 will be able to enjoy online gambling. Nevertheless, H 271 bill restricts employees of land-based casinos and major employees of gambling platform providers from online gambling.
6. What games can we expect in Pennsylvania?
We can expect regular online casino games including online slots, online table games and live poker. Probably live dealer games will be introduced as well. However, a peculiar taxation structure that taxes slot games more heavily than table games promises us some new hybrids that will satisfy slot lovers but will remain under the provision of table games or poker.
7. What about player pools with New Jersey?
A player pool refers to an agreement between different states which allows their visitors enjoy online gambling websites registered in both states.
Currently, it is well known that there have been talks since 2017 between PA and NJ about player pools. New Jersey casinos were very much interested in the new player cohort from Pennsylvania. However, it is not just New Jersey that can directly benefit. If the bill becomes a law, Pennsylvania will be very interested in attracting thousands of online players from New Jersey-meaning new profits for the casinos and larger budget funds for the state. Currently, NJ shares poke pool with Nevada and Delaware, therefore we can see Pennsylvania join the family.
8. Is it just the poker that will be allowed?
Probably not, New Jersey, Delaware and Nevada have stuck the deal regarding poker only, but currently, all parties are interested in interstate play for the online casinos as well. We can expect the same to repeat with Pennsylvania online gambling. First, comes online poker, everything else follows.
9. How much will PA earn from the new law?
There are 3 answers to this question.
a) License fees: legislators expect to collect around $100 millions from license fees
b) Tax revenue: this is a big issue and possibly a problem for online gambling in the state. PA legislators included an enormous tax rate for online gambling profits.
- 54% for slot machines(non-peer-to-peer)
- 16% for table games(non-peer-to-peer)
- 16% for interactive games(peer-to-peer )
These rates are humongous when compared to NJ online gambling tax rate of 15% percent. Taxes will be collected based on gross gaming revenue, which means a total of all cash collected online by the casinos will be taxed.
c) Thousands of new jobs and a new industry for the state.
10. PA Online Gambling License Details
- Who will oversee online gambling in PA?-PGCB- Pennsylvania Gaming Control Board
- How long is license good for- 5 years.
- How long will it take for applicants to get approved?- officials have 90 days after the application date to make the decision.
11. What about Sports bets in Pennsylvania
Bill H 271 legalizes and regulates sports betting on the state level. However, sports betting remains illegal in Pennsylvania, because a federal law prohibits sports betting on a national level. Currently, the state of New Jersey is battling this law and a case against it will be reviewed in the Supreme Court early in December 2018. Over the last 5 years, New Jersey has been battling PASPA-a federal law that prohibits sports betting across the US. A Supreme Court decision is expected to be announced in the first quarter of 2018. Sports betting has been regulated in the NJ since January 2012 but remains illegal due to PASPA. Considering the fact that PA decided to regulated sports betting, regardless of the national ban, there will be additional pressure on the judges voting in support of PASPA.
12.What about online sports betting
Online sports bets is a humongous industry in Europe, therefore legislators were destined to regulate online betting. Assuming PASPA is ruled illegal, land-based sports betting and online sports betting will be legal in Pennsylvania.
2018 Has been a year of ups and downs for online gambling. Considering the fact that the bill was passed by both of the legislative houses in less than 24 hours, we can expect 2019 to end on a bright note for online gambling lovers.
njnodeposit prediction: Governon Wolf will sign PA online gambling bill and 2019 will be the year when first legal online casinos will open their websites in Pennsylvania.