Pennsylvania to legalise online gambling

31 October 2017

Pennsylvania has become the fourth US state to officially legalise online gaming after Governor Tim Wolf signed an expansive gambling package into law.

Approved last week by both the Pennsylvania House and Senate, House Bill 271 allows for the regulation and legalisation of online poker, slots and table games within the state’s boundaries.

Pennsylvania’s existing commercial casinos will now be able to apply for a new online gaming licence and begin offering services to punters via desktop, mobile and tablet devices.

Licences will be priced at $10m (€8.6m) each, although if some of these are not claimed after the initial roll-out, then they will be offered at a lower price of $4m for certain market segments.

Pennsylvania plans to tax online slots at a rate of 54% while internet table games and poker face a rate of 16%.

The state lottery will now also be able to sell tickets online, while the bill opens up the potential for daily fantasy sports operators to begin offering services in Pennsylvania, should Congress give clearance to such activities on a national scale.

The bill will also allow for the creation of 10 mini casinos in the state, as well as for truck stops to operate video gaming terminals (VGTs) and passengers at Pennsylvania airport to play games on their tablet devices.

However, the bill has not gone down well with everyone in the state, with Chris Sheffield, senior vice-president and managing director interactive for PA casino operator Penn National, criticising the 54% online slots tax as being “completely unworkable”.

Penn National, one of the 12 existing land-based casino licensees in Pennsylvania in line to receive one of the new licences, and Cheffield told iGaming Business he “can’t see anyone making a return” unless they are in it for the long-term.

Sheffield said: “Obviously we are pleased that this has finally moved but 54% for online slots is the highest tax rate on the planet.

“It’s completely unworkable and the only reason one might buy a licence is to then begin an active lobbying effort to reduce the rate to where one might actually make money on the operation.

“We’ve run the numbers many times, and just can’t see how they work given investment in licence fees, setup costs and ongoing costs.

“I really can’t see anyone making a return unless they are in for the very long-term and its likely some early operators will bail out at some stage as has happened in new markets before.”

Delaware, Nevada and New Jersey are the only other US states to have legalised some form of online gaming.

Related articles:
Penn National slams “unworkable” PA online slots tax
Pennsylvania House joins Senate in passing gambling bill
Pennsylvania Senate passes gambling expansion bill