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Online Gambling Bill Finally Introduced in Pennsylvania

March 23, 2017

After previewing a new online gambling bill in January of this year, Pennsylvania State Senator Jay Costa has finally introduced his new bill to the public and the state legislature. The bill will go through the House and Senate as Senate Bill 524. Co-sponsors on the bill include Senators Wayne Fontana, Vincent Hughes, and Judith Schwank.

The Bill has been designed as a replacement for prior bills SB 477 and HB 392. Based on a quick comparison of all three bills, it would be a gross understatement to say the new bill poses some surprising changes. Based on these changes, one would have to wonder how serious these politicians are about legalizing online gambling throughout the state. 

The most controversial issues with Bill 524 relate to the fees and taxes that would be assessed on gaming site providers and their vendors. In the prior bills, there was a call for online site operators to have a $8 million license fee imposed for the right to provide services to Pennsylvania residents. The new bill raises that amount to an astounding $10 million, which would most likely eliminate the prospects of smaller providers to participate as operators.

Furthermore, the proposed fee for software and hardware vendors was increased from a manageable $2 million, all the way up to $5 million. Again, only the wealthiest vendors would have the means to provide services in the open market.

As restrictive as those numbers may see, they pale in comparison to Bill 524's prescribed tax rate. In the prior bills, a tax rate of 14% was being considered. In the new bill, the amount was increased up to 25%. While the 14% seemed more in line with the tax rate being used and/or discussed in other states, the 25% rate seems to be set forth as a punishment for anyone wanting the state to allow online gambling.

For what it's worth, there is one provision in the new bill that seems to have enough support to be passed. Airports throughout the state would be allowed to provide “multi-use computing devices” like tablets. This would essentially allow an entity other than casinos to provide gambling services.

 


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