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Pennsylvania Legislature to Reconsider Online Gambling Legalization

January 12, 2017

After a near miss in 2016, it looks like the Pennsylvania legislature is ready to take another pass at establishing a law that would legalize online gambling for the state's residents. The new bill is being co-sponsored by State Senator Jay Costa, who has stated he would use last year's bill, HB2150, as a basis for creating a new bill.

Over the past four years, the legislature has battled over the legalization of fantasy sports and perhaps online casino gambling. The potential for bringing in tax revenues from the gaming industry to balance the state budget has been sited as the primary reason the bill almost passed in November of last year.

The most contentious parts of past bills have related to licensing fees and the taxation of land-based casinos that would be given the ability to offer online casino games. Past bills have also set out to look for ways to encompass and regulate fantasy sports sites, which are becoming overwhelmingly popular all over the country. 

Costa's new bill plans to call for currently established Pennsylvania land-based casinos to pay a licensing fee of $10 millions for the right to offer online casino-style gambling options. The software developers that would provide the gaming platforms would pay a $5 million "hosting fee" and the industry would be taxed on revenues at a rate of up to 25%.

As for the fantasy sports sector, the licensing fees would be set at $2.5 million per provider and again, revenues would be tax at a rate of 25%.

Over the past two years, similar bills have passed in the House of Representatives, only to be shut down when they reached the Senate. Based on the alleged proposals in Costa's forthcoming bill, it looks like there's an attempt to reach a compromise. Given the possible extent of the compromise, the prospects for a new law look better than ever before. 

According to Costa in a recent interview, the passing of a new bill is necessary in order to "allow the Commonwealth's gaming industry to continue to evolve and remain competitive in a responsible manner." 


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