Long speculated to be the next state to legalize online gambling, Pennsylvania is considering three different proposals for legalized gambling according to Republican state Rep. Scott Petri.
That could make the state the first to allow both online casino games and poker as well as online lottery sales.
Also on the legislative plate are proposals to allow slots at state airports run by the existing casinos and distributed gaming—slots at bars and restaurants across the state.
Delaware, Nevada and New Jersey currently allow online gambling, while online lotteries are permitted in Kentucky, Georgia, Illinois and Michigan.
Pennsylvania Lottery spokesman Gary Miller said that proposals for online lottery sales in the state are being discussed at part of the state Department of Revenue’s budget for the next fiscal year, set to begin in July.
Pennsylvania’s population is ageing and the state’s lottery revenue goes primarily to programs for seniors. The state is also facing a drop in lottery sales for the last year.
“With a growing number of senior citizens needing this, we need more options,” Miller said.
Petri also told reporters that legalizing online casino gambling is also being considered despite some opposition from the state’s land-based casinos, which see online gambling as a threat to their revenue.
Another proposal being considered would allow for a “mini casino” option, which would allow for small local shares in the industry, according to Petri.
One of the main sticking points in the debate has been what tax rate would be imposed on online gambling, Petri said.
“The entire industry thinks it should be 15 percent but not more than 20 percent,” Petri told Fox News. “That’s in contrast with the 54 percent brick-and-mortar slots rate.”
Several Pennsylvania legislators have pushed for the higher tax rate, which many analysts feel online companies simply would choose not to pay and avoid the state’s market.
Penn National Gaming said the company would sit out if the rate is too high.
“We are trying to knock down some sort of silly notion that you could have tax parity between iGaming and the slot machines and that it could be a successful industry and we’re trying to convince them that if they do this, no one will sign up for it,” company spokesman Eric Schippers told Online Poker Report.
Amid all the different proposals, some possible details have been emerging. For example, state Senator Joe Scarnati has proposed having online gambling sites run by the state lottery, rather than land-based casinos. However, critics say that could cost the state more than $100 million in projected licensing fees.
This is also a problematic solution. Unlike neighboring New Jersey, where iGaming has thrived over the past two years, Delaware has been virtually non-existent, and is run by the state lottery.
Delaware’s online gaming industry had a tough March losing 42 percent over March 2016.
The state took in just $151,811 for the month with online poker taking in only $17,715. Table games and video poker generated $134,096. The state’s revenue is down 12 percent for the first quarter.
The state’s fortunes have sunk since December when it took in a $229,987 and saw a total 62 percent increase in 2016 over 2015.
The Pennsylvania proposals also come as the state is facing a major deficit in its upcoming budget. Facing similar deficits in their last budget, state lawmakers actually included $100 million in online gambling revenue in their initial budget, despite the fact that online gambling hadn’t been legalized.
Reports also say that proposals are being floated to regulate daily fantasy sports. However, again, some proposals include vary high proposed tax rates such as a 25 percent tax rate on gaming revenue, as well as a $2.5 million up-front licensing fee for DFS sites.
