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 working toward online gambling
Some Pennsylvania lawmakers have an interest in expanding gaming to the internet. While offshore sites already operate in Pennsylvania, these unlicensed companies contribute no taxes to the state’s economy.
New Jersey became the third state to legalize online gaming in 2013. It takes in tens of millions of dollars per year in taxes from online gaming. This does not include initial licensing fees. This tax revenue generated by New Jersey without raising taxes became appealing to Pennsylvania.
It all started with Pennsylvania Rep. Tina Davis. She introduced a bill in 2013 that would have permitted online poker and online casino games. There were some issues with the bill. Namely, a high tax rate and a restriction making it only available to residents as opposed to anybody located in Pennsylvania at the time of action. That bill died and a similar one also failed to make it out of committee the following year.
Rep. Davis was not the only one with the hopes of legalizing online gaming in Pennsylvania. Other sponsors have filed an additional four bills. An online gaming bill finally made it out of committee in 2015.
The bill ultimately failed, as did gaming legislation proposed in Pennsylvania in 2016.
With the start of the 2017 legislative session, once again PA lawmakers are facing a serious budget gap. They are once again looking into legalizing online gambling and daily fantasy sports, as well as enacting other gaming reforms in the hope of increasing revenue without raising taxes.
Pennsylvania online gambling FAQ
Who could operate a legal Pennsylvania online casino?
Operators of brick-and-mortar casinos in Pennsylvania would be permitted to spread online gaming. Additionally, software providers could partner with casino owners.
What games would be legal?
Any game legal in Pennsylvania casinos would be permitted online under HB 649. This includes poker, slots, video poker, blackjack, craps, roulette, keno, Three Card Poker, baccarat, Pai Gow Poker and many more proprietary games.
What would the tax rates be?
Pennsylvania would tax gross proceeds at a 14 percent rate. There would also be a $5 million licensing fee for casinos, as well as a $1 million licensing fee for software providers. As a result, this could generate $40 to $50 million in revenue the first year.
Which casinos are likely to be involved?
Harrah’s is likely to be one of the most involved in a Pennsylvania online gaming industry. A subsidiary of Caesars 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 Pocono in Pennsylvania. Additionally, it is the management company for Resorts in Atlantic City, where it operates a 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.
Would Pennsylvania online poker sites network with other states?
Language in HB 649 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. Therefore it would make it easier to get online poker in the state off the ground.
Who won’t be a factor in Pennsylvania online gambling?
Sands Bethlehem is not likely to have involvement in any Pennsylvania online gaming industry. The casino is owned by Las Vegas Sands. The company is fighting online gaming expansion at the federal level by backing a bill known as the Restoration of America’s Wire Act.
Las Vegas Sands is also running ads in Pennsylvania through a lobbying group known as the Coalition to Stop Internet Gambling. This lobbyist’s advertising appears to viewers as an antigambling group. It’s actually a casino company’s marketing to stop competition.
These facts make it clear that Sands Bethlehem has no interest in participating in the online gaming market. That is an interesting fact since Sands is the largest casino in Pennsylvania in terms of table games and revenue.