Pennsylvania is the second largest US gaming market. It only trails Nevada.
Pennsylvania passed Atlantic City in terms of gaming revenue in 2012. As a result, it was the first time in history that Atlantic City was not the second largest US casino market in terms of revenue.
Live casino gaming in Pennsylvania took in $3.1 billion in fiscal year 2013. This included $2.4 billion in slot revenue and $730 million from table games.
While Pennsylvania trails Nevada in terms of total gaming revenue, Pennsylvania is the top state for tax revenues pertaining to casinos. Additionally, Pennsylvania collected in $1.4 billion in taxes in fiscal year 2013. That is more than triple what Nevada took in during the same year, despite Nevada having twice the gaming revenue.
Pennsylvania legalizes online gambling
On Oct. 25, 2017, the Pennsylvania Senate passed a comprehensive gaming expansion package that includes online gambling in the form of online poker, online slots, as well as online table games. The next day, the PA House passed the bill as well, making Pennsylvania the fourth state in the nation to authorize online gambling.
The package then went to Gov. Tom Wolf, who signed the bill on Oct. 30, 2017, officially cementing PA’s status as the fourth US state to legalize online gaming.
The legislation, H 271, permits a variety of other gambling expansions, including daily fantasy sports, sports betting both online and off (should the federal government repeal PASPA), video gaming terminals (VGTs) in authorized truck stops, and tablet gaming at qualified airport locations.
Now that Wolf signed the bill into law, it will likely be around nine months before the first legal online gambling sites launch in Pennsylvania. Regulations will need to be promulgated, licenses issued, sites tested, and so forth.
When legal NJ online gambling was passed, it was roughly nine months before sites went live.
Pennsylvania online gambling FAQ
Who can operate a legal Pennsylvania online casino?
Pennsylvania online gambling law permits existing PA operators to apply for licensing within 90 days. There are three separate licenses in Pennsylvania: online slots, online house-banked games, and online peer-to-peer games and online poker. A PA operator can apply for all three for $10 million or $4 million each.
PA law will also allow non-PA companies to apply to operate in the state after 120 days. These companies have to pay $4 million per license as outlined above.
What games are legal?
Any game legal in Pennsylvania casinos would be permitted online under H 271. This includes poker, slots, video poker, blackjack, craps, roulette, keno, Three Card Poker, baccarat, Pai Gow Poker and many more proprietary games.
Daily fantasy sports and sports betting are also authorized. Sports betting, however, is still subject to a federal ban and therefore cannot be offered in PA until that ban is lifted.
What would the tax rates be?
Pennsylvania taxes its land-based casinos at the highest rate in the US. Unfortunately, it has also decided to impose steep levies on the online side. The tax rates are 54 percent for online slots, 16 percent for online poker and table games, 36 percent for sports betting, and 15 percent for DFS.
Which casinos are likely to be involved?
Harrah’s is likely to be one of the most involved in a Pennsylvania online gaming industry. It is a subsidiary of Caesars, which owns WSOP.com in Nevada and New Jersey. It also spreads Caesars and Harrah’s online casinos in New Jersey. 888 provides software to Caesars and operates under its New Jersey license. 888 also powers the Delaware online gaming industry. Caesars would be the most experienced Pennsylvania operator.
Mohegan Sun would also be a likely candidate for a successful online gaming business. Mohegan Sun operates Mohegan Sun Pocono in Pennsylvania. Additionally, it is the management company for Resorts in Atlantic City, where it operates a NJ casino site. Resorts partnered with PokerStars, which will give the license the potential of being the largest poker business in New Jersey. Mohegan Sun also operates a free play casino site through social networking.
Another likely player is SugarHouse, which operates the casino of the same name in Philadelphia. SugarHouse also operates a legal New Jersey online casino site, and doubtlessly will do the same once the PA market launches.
Would Pennsylvania online poker sites network with other states?
Language in H 271 would permit Pennsylvania poker sites to network with other states. No existing agreements are currently in place, but it is likely that Pennsylvania poker sites would connect to existing interstate networks upon launch. Nevada, New Jersey, and Delaware are the other three states offering online poker.
It was announced in October 2017 that New Jersey entered into an interstate online poker agreement with Nevada and Delaware. It is highly likely Pennsylvania will also get involved when the industry is operational.
Who won’t be a factor in Pennsylvania online gambling?
Sands Bethlehem, owned by online gambling foe Sheldon Adelson, for a long time was seen as being a major obstacle to online gaming legalization in Pennsylvania. In 2017, however, Sands Bethlehem entered into a purchase agreement with MGM Resorts.
Though that deal ultimately fell through, Sands is courting other buyers and apparently lost interest in resisting online gambling. It is probable that a new owner will operate some form of legal PA online gambling.