The Keystone State has joined the ranks of other US jurisdictions in authorizing internet-based wagering. Governor Tom Wolf signed a sweeping gaming law, making Pennsylvania the fourth state to officially permit online gambling.
The Pennsylvania General Assembly passed House Bill 271 last week, paving the way for the regulation and legalization of online poker, slots, and table games within the state’s borders.
Existing commercial casinos in Pennsylvania can now apply for new online gambling permits and start offering services to players through computers, smartphones, and tablets.
The cost of a license is $10 million (€8.6 million), but if some of these permits aren’t claimed after the initial launch, they will be offered at $4 million to certain groups.
Pennsylvania intends to levy a 54% tax on online slots, while internet table games and poker will be subject to a 16% tax.
The state lottery can now also sell tickets over the internet, and the legislation opens the door for daily fantasy sports operators to offer services in Pennsylvania, assuming Congress grants nationwide authorization for such activities.
This proposed legislation would also authorize the creation of ten small gambling establishments within the state, in addition to permitting truck stops to operate video gaming machines and allowing travelers at Pennsylvania airports to participate in games on tablet devices.
However, this proposed legislation has not been met with universal support within the state. Chris Sheffield, Senior Vice President and Director of Interactive Gaming for Penn National, a Pennsylvania casino operator, voiced his disapproval of the 54% tax rate levied on online slots, labeling it “completely unworkable”.
Penn National is one of the licensees for twelve existing land-based casinos in Pennsylvania and is eligible for one of the newly proposed licenses. Sheffield told iGaming Business that “I don’t see how anyone can make a profit from this unless it’s a long-term investment”.
“We are obviously pleased that we are finally making progress on this, but a 54% tax rate on online slots is the highest in the world,” Sheffield stated.
“It’s completely unworkable. The only reason individuals would purchase licenses is to begin actively lobbying to have the tax rate reduced to a level where you can generate revenue from the operation.
“We have conducted the calculations multiple times and considering the license fees, setup costs, and operating expenses, there is simply no way to see how it can be profitable.
“I truly don’t see how anyone can make a profit from this unless they are making a long-term investment, and it’s likely that some early operators will exit at some point, just like what occurred in new markets previously.”
Aside from Delaware, Nevada, and New Jersey, every other state in the US has permitted some form of online wagering.
Relevant news:
Penn State condemns the “impossibility” of Pennsylvania’s online slot tax
Pennsylvania’s House of Representatives joins the Senate in approving a gambling bill
Pennsylvania’s Senate passes a bill to expand gambling
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