iGaming and DFS Bills Currently Being Floated in Pennsylvania

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Friday, June 10th, 2016 | Written by Shane Larson

At the end of 2015, online gambling advocates were excited at the prospects of a fourth state soon entering the USA’s regulated iGaming industry. There was every indication that it would be Pennsylvania as the state was close to passing House Bill 649 that would pave the way for the legalization and regulation of online casino games and online poker in the Keystone State.

In fact, some people thought that lawmakers in Harrisburg would pass the bill before the New Year in order to get funding for the state’s beleaguered pension plan. Nevertheless, 2016 arrived, and optimistic industry insiders revised their forecast that that the bill would be passed before spring was finished, instead. Now, summer has arrived without any new word on HB 649. So what’s the hold up?

Daily fantasy sports just might be.

The State of HB 649

In a recent interview with the Online Poker Report, Pennsylvania Representative John Payne, the sponsor of HB 649, reassured those in favor of online gambling regulation that the bill was alive and well. He explained that while discussions have been tabled for the time being that the bill has been kept active and is still able to be voted on and passed. Payne said that the general consensus is that HB 649 will bring in the much-needed revenues required to keep the state pension plan running, and that he believed it would pass this year, or that it would be tied into the state budget and passed with that.

Why the Wait?

With Payne sounding so optimistic about the future of his bill, and the state having been genuinely interested in regulation just a few months ago, it seems puzzling that nothing has happened with House Bill 649. That is, it’s puzzling until you consider what else is being discussed in Harrisburg at this time.

Like many other states, Pennsylvania has been examining the legality of daily fantasy sports betting to make a determination about whether or not it constitutes gambling, and if it does, how it should be regulated. The Pennsylvania State Legislature has charged the Pennsylvania Gaming Control Board with researching daily fantasy sports betting and compiling a report of recommendations regarding how the state should move forward with daily fantasy sports betting.

The Pennsylvania Gaming Control Board report was due on May 27. Some industry insiders are speculating that the Pennsylvania legislature has purposefully kept House Bill 649 on the shelf, so that it could be passed as a comprehensive gambling reform bill. If this theory is correct, then Harrisburg lawmakers are waiting to examine the findings of the Pennsylvania Gaming Control Board report on daily fantasy sports betting. If the board recommends that daily fantasy sports betting be regulated in some way, which is likely, then language could be added to HB 649 that would allow the state to legalize and regulate daily fantasy sports betting, online poker and online casino games all at one time.

New DFS Bill (HB 2150) Introduced

With the daily fantasy sports betting report now submitted, we’ll have to keep a close eye on Pennsylvania to see what happens next.

In the meantime, this week state Rep. George Dunbar introduced a new bill entitled the Fantasy Sports Consumer Protection Act (HB 2150), with the piece of legislation scheduled to be voted on by the House Gaming Oversight Committee on June 15th. Similar to HB 649, Dunbar’s bill seeks to allow casino operators to apply for DFS licenses, but is different in that it does not require DFS operators to partner with one of Pennsylvania’s land-based casino operations.

According to HB 2150, successful DFS license applicants would have to pay either $50,000 or 7.5% of their revenues depending on whichever is the lesser amount. In addition, renewing DFS licenses will cost $5k per annum, with 5% of their revenues then being collected as tax every three months. Other points of interest in the bill include restricting the age of DFS players to 18 years or older, with land-based casinos given the option to raise the limit to 21 or older. Casino license holders will also be permitted to place “fantasy contest terminals” at various locations around their venues.