As lawmakers in Pennsylvania consider several bills in both chambers of the General Assembly to legalize and regulate online gaming, advocates for legalized online are warning their tax scheme is all over the board.
Proposed tax rates on internet gaming revenues in the three bills that would legalize a full range of internet casino games include a low of 14 percent in the bill sponsored by Rep. John Payne, chairman of the House Gaming Oversight Committee; 28 percent in another House bill sponsored by Rep. Tina Davis; and the high rate of 54 percent—the same as the land-based slot tax—in the bill sponsored by Senator Kim Ward. (A poker-only bill sponsored by Rep. Nick Miccarelli would set the tax at 14 percent.)
Speaking last week to the Pittsburgh Tribune-Review, leading internet poker executives and advocates urged lawmakers to choose the lowest tax. “People won’t invest proper marketing dollars to drive revenue if the tax rate’s too high,” said David Licht, executive chairman and CEO of All American Poker Network, which operates an online network in New Jersey.
Added John Pappas, executive director of the Poker Players Alliance advocacy group, “If the tax rate is exceedingly high, the operator is going to take that out on the consumer.”
Licht estimated that a revenue tax around 15 percent, with a $5 million licensing fee, would bring around $100 million in revenues the first year of legal internet gaming in Pennsylvania, on around $300 million in gross online gaming revenue.
Online gaming bills are part of a package of legislation that lawmakers are considering to boost gaming revenues, including 24-hour liquor licenses, secondary slot parlors, airport slot machines and skill-based gambling games.
