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Online Gambling Movement in Pennsylvania

23 June, 2016

In a surprising move that few really saw coming, the Pennsylvania House of Representatives took a huge step towards legalizing online gambling in the state by passing an amendment to House Bill 2150 that included the legalization of online gambling. HB 2150 is a bill by Republican Representative George Dunbar and was focused on the regulation of daily fantasy sports, an important conversation that is taking place in many states across the country and which most recently saw the passage of a bill through the New York Legislature.  

 

The amendment successfully attached to HB 2150 was authorized by Democrat Representative Rosita Youngblood and was passed in the House by a comfortable 115 votes to 80. The current iteration of HB 2150 now includes both the legalization of online gambling and regulation of daily fantasy sport in Pennsylvania. If the bill passes in the Senate as it is written today, individuals aged 21 and over will be able to gamble and play poker online. Revenue from online gambling will be taxed at 16%, which is more closely aligned with New Jersey's online gaming tax rate as opposed to the material rate applied to Pennsylvania brick and mortar casinos today. The bill also contains proposals to add slot machines at both airports and race tracks for the first time; operated by license holders approved by the Pennsylvania Gaming Control Board.  

 

While the bill as passed won't implement a windfall of legislation all at once, HB 2150 does set a fascinating framework wherein casinos will have the option to enter into legalized sports betting should the federal ban be lifted – a provision we assume was required by the casino base to support the framework of DFS regulation – a space in which casino operators truly neither operate in or financially benefit from today. 

 

The passage of the Bill marks an important step forward in the fight for the expansion of online gambling into a fourth state. From here, the bill will be sent to the House Appropriations Committee to ensure that it is fiscally viable. It will then be returned to the House of Representatives for a further vote. The penultimate step will be a vote in the Pennsylvania State Senate before it is sent to the Governor to be passed into law.  

 

A vote that had occurred earlier in the evening and was centered around video gaming terminals (VGTs) had been defeated with 116 votes against and only 79 for. This earlier amendment to HB 2150 would have allowed every business with a liquor license to install up to five VGTs, and was seen by many as a poison pill to the bill's core elements of DFS regulation and online casino in state 

 

This is an important moment from the industry and one to be greeted with optimism. There had been concern that progress on online gambling in Pennsylvania ran the risk of stalling again due to the importance of the Presidential Election. However the passage of this bill, combined with iGaming legislative movement in Michigan and New York and ongoing efforts around daily fantasy sports, shows that the dominos may be slowly starting to fall with online gambling. Like many states across the country, Pennsylvania is looking for alternative sources of revenue, meaning that if the bill passes the State Senate it is unlikely that Governor Tom Wolf doesn't sign it. 

 

GAN will continue to monitor the situation both in Pennsylvania and across the country as movement towards online gambling continues to heat up.   

 

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