Gambling Everywhere? Pennsylvania Proposed Gambling Expansion

On the heels of the Pennsylvania Senate passing a gambling bill, the Pennsylvania House of Representatives last week introduced and passed a much more sweeping bill which would significantly expand gambling in Pennsylvania.

The voluminous House bill legalizes fantasy sports betting, skill-based wagering, Internet gambling offered by Pennsylvania licensed casino operators including on tablets in airports, slot machines at off-track betting parlors, and up to 40,000 video gaming terminals in establishments with liquor licenses. The bill initially included VLTs in nursing homes, but that provision was heatedly deleted.

Just like the Senate bill, the amended House bill limits internet gaming to the current Pennsylvania licensed casino operators, but the tax rate of 16 percent for all games, plus a 3 percent share assessment is much more favorable than the tax rate in the Senate bill which, while taxing poker at 16 percent, taxes all other games at 54 percent. On the other hand, the House bill contains an $8 million upfront license fee versus 5 million dollars in the Senate bill. The casinos’ technology vendors will have a $2 million upfront licensing fee.

There is also a reinstatement- slightly tweaked- of the local share.

The Senate and House bill both allow the state lottery to offer online ticket sales as long as the games being offered are not similar to slot machines and table games. Both bills also permit sports betting if the federal government lifts its ban.

In addition to the tax rate disparity, the major difference between the two bills, and the most controversial part of the House bill, is the up to 40,000 video gaming terminals that will be permitted in establishments licensed to serve alcohol such as bars, restaurants, hotels, VFWs, truck stops and similar locations, with no more than five in any one location (except for truck stops that can have 10). In case anyone was wondering- these machines will look and act like slot machines.

Pennsylvania casino operators, and many in the Senate, strongly oppose the video gaming terminals.

Finally, although not much discussed, there is a provision in the House bill that could result in new casino ownership – as the House bill repeals the current law preventing a casino operator from owning more than one controlling interest in one casino.

June 30 is the budget deadline. The Senate and House must reconcile the bills and get Governor Wolf’s signature.

Stay tuned.