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Pennsylvania is the most populous US state with legal, regulated online gambling in 2020. The omnibus expansion package Gov. Tom Wolf signed into law in 2017 authorized interactive gaming across multiple verticals — including lottery, casino, fantasy sports, sports betting, and poker. Is online poker legal in Pennsylvania? Tom Wolf signed bill H 271 into law on Oct. 30, 2017, online gambling became legal in Pennsylvania.This bill includes poker, casino table games, slots, and sports betting. That made Pennsylvania the fourth state to legalize online poker. Seven of the 13 casino license holders in Pennsylvania applied for licenses to operate online poker sites.
Pennsylvania’s regulated gambling industry dates back to 1959 when the state legalized horse racing, but it was the legalization of slot machines in 2004 and table games in 2010 that turned Pennsylvania into a true gaming state.
Despite its very short history as a gaming state, Pennsylvania has emerged as the second largest casino market in the country, trailing only the casino juggernaut that is Nevada in gross gaming revenue.
However, stagnant revenues and increased competition from neighboring states has Pennsylvania once again considering further expansion possibilities. Horse racing in Pennsylvania
In 1959, the Pennsylvania legislature passed the Race Horse Industry Reform Act. The bill legalized horse racing in the state, but it would take several years before dedicated horse racing tracks started popping up in the state. The oldest track still in operation is Meadows Racetrack and Casino, which first opened in 1963.
Horse racing in Pennsylvania had very deep roots (Stephen Foster’s ode to betting on the ponies, Camptown Races, was set in Pennsylvania) as horse racing thrived in the state throughout the 1700’s and 1800’s, even when prohibited by the legislature. But horse racing was eventually forced to throw up its hands in disgust at the state’s restrictions (limited to racing at fairs and other odd venues) in the 1900’s, and most Pennsylvania stables simply raced their thoroughbreds out of state.
By legalizing thoroughbred racing, the state kept that purse money in-state and was able to capitalize on the tax revenue the racing industry generated. Slot machines in Pennsylvania
In 2002, gubernatorial candidate Ed Rendell made gaming expansion a centerpiece of his campaign. Rendell’s plan was to legalize slot machines and allow the state’s racetracks to apply for slot licenses, as well as creating a new license category for standalone slot casinos. Under Rendell’s plan, the revenue generated from the slot machines would go almost entirely towards easing property tax burdens and school funding, both of which were mounting concerns in the state.
The legislature passed a version of Rendell’s plan in 2004, which Rendell happily signed. Under the bill, up to seven racetracks could apply for slot licenses, and the state would create five stand-alone slot casino licenses, and three resort casino licenses.
Rendell noted at the time that slot machines wouldn’t be a panacea, but the revenue generated from slot machines (estimated at the time to be $3 billion a year) would tally about $1 billion a year for the state, on top of the one-time licensing fees the state would collect from potential casinos.Table games in Pennsylvania
The revenue from the slot machines was certainly helpful, and did offer a modicum of tax relief, but Rendell’s warning that slot machines wouldn’t be a panacea was realized within a few years, likely hastened by the economic collapse of 2008, and by 2010 the Pennsylvania legislature was looking at further gaming expansion to help close their growing budget deficit and rising property taxes.
The simplest and quickest fix would be the legalization of table games, and in 2010 the Pennsylvania legislature passed a bill that would allow the state’s existing casinos to add table games. Governor Rendell, the driving force behind slot expansion earlier in the decade, wasn’t a proponent of table games, but he did the sign the bill, making sure to tell reporters at the time that he had mixed feelings about it.
Rendell’s misgivings proved unfounded, as table games were seamlessly added to Pennsylvania’s existing casinos, and Pennsylvania has become the second largest gaming state thanks to the $3 billion in gross gaming revenue the state’s 12 casinos generate each year. Online gambling in Pennsylvania
In 2013, led by State Senator Tina Davis, Pennsylvania started looking into online gambling, but it wasn’t until 2015 that iGaming talk really heated up.
Representative John Payne, the Chairman of the House Gaming Oversight Committee, led the charge for iGaming legalization in 2015. Payne hosted a series of hearings on the subject and crafted HB 649, a bill that would legalize online gambling in the Keystone State.
The Pennsylvania Senate also explored iGaming expansion and crafted a bill of its own, SB 900. The Senate bill included other potential gaming reforms but wasn’t as industry-friendly as Payne’s bill.
Right now, there is still some hope that online gaming expansion will work its way into the 2015 state budget. Future expansion
In addition to online gambling, the legislature also explored several other gaming reforms they felt could support the casino industry while also increasing state revenue.
Among the gaming reform measures the legislature has discussed are:
*Legalizing and regulating skill-based games.
*Adding slot machines to off-track betting terminals.
*Removing some restrictions on category 3 (resort casinos) license holders.
What will the future hold for gambling in Pennsylvania. It appears that more options — including online gambling — are in the cards. How quickly we see new gambling opportunities open up remains to be seen.
Photo by Steve Elgersma used under license CC BY-NC-ND 2.0Valerie Cross
This is a developing story.
A major victory was declared Thursday for supporters of iPoker and online Casinos on Pennsylvania. The Pennsylvania legislature passed a landmark bill that will allow online poker, online casino, and daily fantasy sports (DFS) within the borders of their state. Pennsylvania is on the brink of becoming the fourth state in the U.S. to authorize and regulate online gaming.
The amended iGaming bill, H 271, was passed in the Senate Wednesday night and sent to the House, where it received a couple hours of debate both Wednesday night and Thursday morning. The House then passed the bill Thursday and Gov. Tom Wolf is expected to sign the bill into law soon. He has ten days to do so before the bill automatically becomes law.
UPDATE: Pennsylvania Gov. Tom Wolf signed the bill, making Pennsylvania the fourth U.S. state to legalize Internet gambling.
Wolf says he’s signed the massive gambling expansion bill passed last week.— Marc Levy (@timelywriter)
While Pennsylvania gained a lot of ground in the iGaming legislation front in 2016 leading into this year, earlier this month, that optimism waned when budget negotiations seemed to break down, making Thursday’s victory even sweeter.Bill Details
Along with online poker, slots, table games and DFS, the bill also allows for sports betting (if federal ban is lifted), online lottery sales, tablet gaming in authorized areas at some airports, video gaming terminals at approved truck stops, ten ’satellite’ casinos and alterations to Category 3 casinos to include more slots and remove membership fees, for a one-time fee.
Tax Rates
The tax revenues from online gaming are obviously one of the major advantages that states gain from passing such legislation. While similar to the iGaming bill in New Jersey, one key difference in the bill just passed in Pennsylvania is the effective tax rate for online slots, which stands at 54 percent. That is compared to the 17.5 percent rate for all iGaming in New Jersey and 16 percent for internet poker and table games in Pennsylvania. Pros Of Legalized Gambling
The tax rates for sports betting and DFS were passed at 36% and 15%, respectively. The implication here is that while the rates for poker and other table games seem reasonable, the steep tax rates for online slots and sports betting may prove problematic in terms of getting operators to offer the products, making profit and growing the industry.
It will be interesting to see how that affects the products offered by operators in the state. Pappas mentioned that the steep internet slots tax rate could impact how many casinos offer the product and said, “Ultimately, that rate needs to come down so Pennsylvania can reach iGaming’s full revenue potential.”
Licensing
As it stands, the Pennsylvania bill offers three separate licenses for online slots, house-banked games and peer-to-peer games like poker. According to Play Pennsylvania, operators can buy separate licenses for $4 million, while existing PA casino operators can purchase all three licenses for $10 million if they do so within 90 days of license availability. After 120 days, operators outside of the state are allowed to apply for licensure.A Win for AllWhen Did Pennsylvania Legalize Sports Betting
The bill being passed today is proof of the efforts of many, both in and outside of the legislature.
John Pappas, Executive Director of the Poker Players Alliance (PPA), applauded the passage of iGaming legislation in Pennsylvania, which comes four years after New Jersey passed their comprehensive iGaming legislation in 2013.
Pappas said in a statement: “Pennsylvania made the right decision today.
’This is a major victory for consumers who, for years, have asked the state to step up and provide meaningful protections. The iGaming law will also help create new growth opportunities for the Commonwealth’s brick and mortar casinos while providing needed revenue for the state budget,” continued Pappas.
Pappas also emphasized the success that iGaming in New Jersey has had and the potential future growth expected in the industry.
“The experience in New Jersey has been nothing short of exceptional. iGaming is responsibly operated by licensed casinos and the technologies they deploy ensure adherence to strict regulatory standards. Moreover, the industry is growing and so are tax revenues. Pennsylvania is now in the driver seat to do even better.” When Did Pennsylvania Legalize Gambling IllegalGet Involved in the FightWhen Did Pennsylvania Legalize Gambling Laws
The win marks a momentous victory for the Poker Players Alliance, which has been at the forefront of the fight for licensed and regulated online poker and iGaming across the U.S. and particularly in Pennsylvania. PPA members made their voices heard through emails, phone calls, media and social media to reach lawmakers, which proved to be effective.
With 1.2 million members nationwide and 25,000 in Pennsylvania, the PPA is the leading poker grassroots advocacy group. You can find out more about how to join the fight for iGaming in your state at The PPA’s website.
Lead image courtesy of Dominic Lacivita
*TagsiGamingNew JerseyiPokerPoker Players Alliance
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