PA House Approves Gambling Expansion Bill

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Monday, June 26th, 2017 | Written by Stephen Smith

The Pennsylvania House of Representatives recently narrowly passed a gaming bill by a vote of 102-89 that encompasses daily fantasy sports and online gambling regulation. As well as aiming to make online gambling legal, House Bill 271 also has proposed allowing video gaming machines to be placed at airports, bars and other venues across the state. At the heart of the gambling expansion plan, which is the largest the state has ever undergone since it legalized casino gambling in the year 2004, is the need to make up for the government’s huge budget deficit. Needless to say, this represents a big step forward for Pennsylvania, especially considering that legislation similar to this one failed in the House only one year ago.

Slots Expansion

Under House Bill 271, those establishments holding liquor licenses, including hotels, bars, fraternal clubs, restaurants and truck stops, will be allowed to offer slot style machines to their customers. The maximum number of these terminals will be set at around 40,000 across the state, while local casinos will also be offered the option to apply for approval to operate an online gambling room in Pennsylvania’s international or regional airport. The license fees will vary anywhere between $250,000 and $5 million depending on which airport it is located, and only those passengers with tickets to fly would subsequently be able to gamble on these machines. The airport would then get 20 percent of total gambling revenue, while the state will receive a further 16 percent of airport gambling revenue. Local casinos with a horse race track will also be allowed to run a maximum of 250 slot machines away from their tracks, and will be charged a $5 million fee, as well as being subjected to a tax rate of 54 percent.

Online Gambling

In addition, there is an amendment regarding the Pennsylvania Lottery that would allow it to hold raffle games, online games and offer instant tickets. Proceeds from these lottery games would be given to the state’s Lottery Fund, although the body will not be permitted to offer online casino games.

On the other hand, casinos that are commercially licensed across the state will be allowed to apply for a license to operate casino type games online and via smartphone apps. It would subsequently cost $8 million to operate a gambling website in Pennsylvania, with a 16 percent tax placed upon operators. Up until now, however, there have been only three other states in America where this is permitted, namely Nevada, Delaware and New Jersey.

Daily Fantasy Sports

One other important aspect of the latest piece of gambling legislation to come out of Pennsylvania is its provision for daily fantasy sports. Under this bill, those applying for a DFS license will have to pay a fee of around $50,000 for the privilege, as well as being subjected to a 19 percent tax rate. They would also be given the chance to obtain their own sports betting license, which could then be run at either their physical casinos, or via their online ones.

Senate Approval Uncertain

While the Pennsylvania House has given its approval, the sort of reception that the bill will be given by the Senate is not at all certain. In the meantime, Gov. Tom Wolf has also signaled his reservations of the plans to expand gambling in the state, despite the possibility of receiving an extra $250 million in new gambling revenue. As he subsequently explains:

“I want real revenue, and I want net revenue. I don’t want anything that we do in gaming or gambling to interfere with the revenues that are already in place. If it just cannibalizes and takes from one bucket called gambling to another, the commonwealth isn’t doing anything more than it has in the past..That’s what I’m looking for, something that is recurring revenue, not another one-time fix, not another thing that just kicks the budget problem, the deficit problem down the road for another year or two ”