Progress regarding Pennsylvania’s online gambling regulation

With the introduction of SB 900, Pennsylvania has made some serious progress regarding the regulation of casino games and online poker. The SB 900 bill is sponsored by Senator Kim Ward and co-sponsored by Senator Elder Vogel, Senator Robert Tomlinson and Senator Joseph Scarnati.

All four represent powerful voices of this gaming issue and their buy-in is mandatory in order for efforts of regulating of online gambling to succeed. This now joins John Paine’s attempt of advancing HB 649, which addresses online gambling alone. More details on http://zzzslots.com/

Below you have some of the critical components of SB 900:

-Internet Gaming Permits (IGP) are only offered to entities that detain a slot machine license and a table game certificate (Category 1 or 2)
 -The PA Gaming Control Board is in charge of determining what games are acceptable to be offered online and issuing temporary regulations for online gambling
 -The Board has a maximum of 120 days from the day when the bill takes effect to publish initial regulations or to rule on IGP applications
 -The IGP permit fee is of $10 million and is valid for a 5 years period and the renewal fee is of $1 million. These are fees and not tax prepayments
- It is mandatory that game servers are “maintained only within the physical location of a permittee’s facility.”
 -Software or platform providers must acquire a separate license from the Board
- The bill requires in-person registration (13)(a)(2). “Except as provided under paragraph (4), an individual must apply to establish an Internet gaming account at the premises of a permittee’s facility and must hold an active players club membership.”
 -The only exception to the in-person registration rule is: “The board shall promulgate regulations for an individual who resides at least 20 linear miles from a facility to allow the individual to become an account holder using the Internet website of a licensed gaming entity.”
 -The tax rate on gross online gaming revenue is of 54%

June 10th is the day in which we will find out the industry’s reaction to Ward’s bill, as there is a hearing taking place on that day at 9 AM in front of the Senate Community, Economic and Recreational Development Committee.

While some other online gambling related bills are currently floating around Harrisburg, the general feel is that the budget process will be the one to serve as the path towards regulation.

The end of June 2015 stands as the deadline for Pennsylvania lawmakers to reach an agreement on the budget. However, procedural steps could take more time, possibly until the end of July.

Although the regulation of online gambling could have little to no influence on the tax revenue for the upcoming fiscal year, licensing fees would be received until then, fees that are expected to be between $50 million and $100 million in total.