Internet Casino, Poker once more on Pennsylvania’s Political Table

The regulation of internet casino and poker games has been a hotly debated issue in Pennsylvania for some years now. Somehow or another, a roadblock always arises to prevent legislation from moving through the House and Senate. One bill, which made great progress earlier this year, was shelved over the summer, but the topic will be revived once more at a hearing next week.

The PA House Gaming Oversight Committee has scheduled a hearing for Tuesday, September 27, in which they will conduct a “Review of states which currently have fantasy sports and/or I-Gaming.”

This is an obvious attempt by the Committee – Chaired by Rep. John Payne, who introduced the internet poker and casino regulatory bill, HB 649, in February of 2015 – to keep the topic alive and kicking.

Although HB 649 was “removed from the table” in June, there was a similar piece of iGaming legislation that passed through the House just before the summer break. HB 2150, a multifarious gambling expansion bill, was scripted to provide regulations for “interactive gaming” and “fantasy sports”, among other things.

There was hardly enough time left for the Senate to debate that particular bill before the session ended, but they are expected to revisit HB 2150 in the fall. And the results of next week’s hearing could have a definable impact on what happens to the legislation over the coming months.

Potential for Internet Poker, Casinos in Pennsylvania

It’s been estimated that, once matured, a state-regulated online gambling market in Pennsylvania would generate $300 million annually. That would boost the state’s existing land-based casino industry, currently valued at about $3 billion, by another 10%.

With a taxation rate of 16% on internet casino services, it would stand to generate nearly $50 million in additional revenue for the state, on top of licensing fees and other mandated contributions by participating operators.

The need to get this bill passed into law has never been so demanding as it is right now. Earlier this year, just before legislators adjourned for the summer, the state passed its annual budget. However, the accompanying funding plan that would normally provide enough money to cover that budget fell short by more than $1 billion. With iGaming projected to fill the coffers with $100 million in its first year – mostly from licensing fees – that’s a large chunk of change the government would be hard pressed to reject.

Keeping Up With The Jones’s

Tax revenue isn’t the only motive behind the state’s increased desire to regulate internet poker and casino sites. There are already three US states who’ve entered the iGaming market, and two of them – New Jersey and Delaware – are neighboring rivals of the Keystone State’s gambling industry. Following in their footsteps would help Pennsylvania remain competitive.

It’s also worth noting that, if Pennsylvania does manage to work an internet gambling bill all the way onto Governor Tom Wolf’s desk, and his signature happens to grace it’s bottom line, negotiating shared liquidity compacts with other iGaming-friendly states would be an option.

Nevada and Delaware have already agreed to a intrastate compact to share internet poker players on all 888-powered sites.

So far, New Jersey has been less acquiesce to the idea of sharing players with those two states, likely due to their existing low traffic rate, and the fact that most of NJ’s operators are not powered by 888’s software. However, regulators in the Garden State are seeking shared liquidity with European operators, and if Pennsylvania’s iGaming market happens to look as diverse as that of New Jersey, chances are they would be open to an intrastate compact with their neighbors to the northwest.