Pennsylvania Senate Approves Online Gambling Bill

Facing continuing budget shortfalls, the Pennsylvania State Senate has finally passed legislation that would legalize some forms of online gambling for residents of the state. After several futile attempts to bring online gambling to the Keystone state, the Senate passed the current measure with a vote of 38-12. With a significant amount of bipartisan support, the bill seems likely to get through the House of Representatives onto the way to the Governor's desk to be signed into law.

It took a lot of hard-line negotiating, but the current bill looks reasonable for both the state and potential online operators. The bill calls for online operations to be run and monitored by the state's brick and mortar casino operators. The proposed licensing fee would $5,000,000 for the software providers with the state receiving tax revenues of 16% from the online operations.

While casino gambling and potentially sports betting stand as long time objectives for both operators and some government officials, the new legislation package only addresses online poker. Currently, there are three online poker sites that look to be willing to offer up the prescribed licensing fee. That would include PokerStars, 888Poker and Party Poker. It's noteworthy that all three of these providers are currently offering services to residents in New Jersey. With the Sands' Sheldon Adelson standing firmly against all forms of online gambling, it would appear that the Parx casino organization would be the most likely candidate to sponsor the online poker sites.

Should this bill pass the House and indeed get signed into law, several other mid-Atlantic states will being paying particular attention to the success of the new law. With tax revenues as the primary motivation for passage, states like New York will be closely monitoring results as they contemplate legislation similar to that which already exists in New Jersey or that being proposed in Pennsylvania.

In 2016, the Pennsylvania land-based casino industry brought in $3.2 billion in gaming revenues, a record annual high. Of course, it was only 2% higher than the revenues reported in 2012. Recent numbers show that gaming revenues have stabilized and need a boost towards continued growth. When it reaches full maturity, estimates indicate that online gambling could add as much as $300 million in revenues, which would add another $48 million into the state's coffers.