Fate of bill with Senate, governor uncertain
The Pennsylvania House of Representatives last week passed a comprehensive gaming expansion package that would make the state the fourth to legalize internet gaming, as well as implementing other expansion measures including authorization of slot machines at state airports and off-track betting parlors and regulation and taxation of daily fantasy sports sites.
One major portion of the bill that was not part of the final package was an amendment that would have authorized thousands of video gaming terminals to be placed at bars, taverns and truck stop. House members voted the amendment down before voting on the overall bill.
The bill now moves to the state Senate, where its fate is less certain, and where it is likely to be modified before passage. Pennsylvania Governor Tom Wolf has said he will veto any gaming expansion bill that is not part of a wider state budget package, which must be passed before the start of the new fiscal year this Friday.
The bill would legalize internet gaming with sites owned by the state’s 12 brick-and-mortar casinos, a model similar to that employed in New Jersey. Operators would pay $8 million each for licenses to operate iGaming sites. Online gaming revenues would be taxed at 16 percent, with 14 percent going to the state and 2 percent to a new program of grants that could be applied for by local governments.
Players over age 21 would have to register with the casinos to play games on smartphones, tablets or PCs. The casinos would be required to offer systems through which players could voluntarily limit bets and/or losses, and players could self-impose a suspension of their accounts when reaching a predetermined loss limit. Account statements showing a history of wins and losses would be available at log-in.
The system would employ age- and location-verification technology to prevent underage gambling and to ensure that online play only occurs within the state’s boundaries.
In addition to legalizing iGaming, the bill would authorize slot machines at airports under one of two methods—traditional gaming machines lining airports as currently exist in Las Vegas and Reno, or online via electronic tablets.
Casinos would be able to petition the Gaming Control Board for permission to install traditional slots at Pennsylvania airports, with the number of games and other regulations to be set by the gaming board. Casinos would be required to create plans for slot installation in conjunction with airport managers. Licensing fees in the bill would be $5 million for Philadelphia International Airport, the state’s largest; $2.5 million for Pittsburgh International Airport, and $1 million each for the state’s four other international airports.
Airport slots would be taxed at 54 percent, with 34 percent going to the state and a 20 percent local share to be reinvested in the airport.
The bill also permit airport slot machines to be offered on tablets, with games streamed online. Cost to licensees would be $1 million. The tablets would be fixed in airport lounges that would also offer food, drinks and other services. Taxes on tablet gaming revenues would be 34 percent, with 14 percent earmarked for the state and 20 percent as the airport’s capital-improvement share.
Rep. John Payne, chairman of the Pennsylvania House Gaming Oversight Committee, told the Pittsburgh Tribune-Review last week that he envisions airport slots as tied to the iGaming bill that he authored, which was the basis of the measure passed last week.
Payne said he envisions the electronic tablets to offer online slots, blackjack, roulette, poker and other casino games. “These machines, if they’re on a tablet, can be so simple,” he told the newspaper. “You can do all the game right on the tablet. It’s a secure system.”
He also said the tablets could be used to order food or drinks, or check on flight status.
Under the measure, casinos could also apply to place slot machines at the state’s off-track betting facilities. The state’s five racetrack casinos would be permitted to put up to 250 slot machines at up to four off-track betting parlors apiece. They must be outside a 50-mile radius of an established casino.
The casinos would pay a $5 million license fee for each off-track facility with slots, and daily gross revenue would be taxed at 54 percent, with 92 percent to the state, 4 percent to the host county and 4 percent to the host municipality.
Among other measures in the package are provisions to regulate daily fantasy sports, a framework for sports betting and changes to the current brick-and-mortar rules designed to increase revenue to the state.
The DFS measure would not require sites like FanDuel and DraftKings to partner with the state existing casinos, but casinos could operate their own fantasy sports contests. Participation in the DFS contests would be available to anyone over age 18, as opposed to the 21-year minimum age for other gaming.
The bill would require the participating commercial companies like DraftKings to obtain a license through the Gaming Control Board, and pay 5 percent of its revenues to the state, after player payouts. Contests would be restricted to professional sports.
The measure creates a framework to proceed with traditional sports betting should the federal sports wagering ban be eliminated. The bill provides that the Gaming Control Board will develop regulations to allow the state’s casinos to implement sports books in the event of repeal of the federal Professional and Amateur Sports Protection Act (PASPA). Licenses would be $5 million each, and revenue would be taxed at 18 percent, with 2 percent going to local communities.
Finally, the bill would relax rules that restrict gaming for Category 3 resort casinos. Patrons of the smaller casinos would no longer be required to spend money on other property amenities for entry to the casino, and the resorts would be able to add more machines—to a maximum of 850, compared to the current 600-game maximum. Maximum table-game count would be increased from 50 to 65 under the bill.
The expansion package, which passed on a 155-80 vote, is projected to add as much as $200 million to state coffers in the first year.
The bill’s passage was applauded by groups headed by the Poker Player’s Alliance, an advocacy group that has pushed for years for Pennsylvania iGaming. “It is about time,” said PPA Executive Director John Pappas in a statement. “This legislation is long overdue. Pennsylvanians deserve robust consumer protections and today the Pennsylvania House delivered. Additionally, this legislation will create jobs and help the commonwealth close its budget gap.
“This common-sense legislation is a win-win for Pennsylvania. The online poker community urges the Senate and Governor Wolf to act swiftly to approve this measure.”
The bill’s fate this week will be tied to the state budget. Wolf has stated a desire to increase state spending on education, but without raising taxes on state residents.
