Several Democratic State Senators have put forward a new bill in Pennsylvania that could legalize and regulate online gambling in the state. This would include Daily Fantasy Sports and the introduction of an online lottery framework in the Keystone State. The bill was introduced and co-sponsored by Senate Minority Leader Jay Costa, Senator Vincent Hughes, Senator Judy Schwank and Senator Wayne Fontana.
Many parts of SB 524 are similar to the other two pieces of legislation presented in the past relating to online gambling, namely SB 477 and HB 392. However, a number of significant tweaks were made as well, mainly in line with taxation.
What do we know about SB 524?
* It proposes a fixed tax on slots at category 3 casinos.
* It will allow mobile tablet gaming at select airports in the state.
* It calls for the restoration of the local tax imposed on host and surrounding communities.
* It will impose a 25% tax on online gambling (higher than the 14% tax rate proposed in HB 392).
* It allows multi-state progressive slot machines.
* An online gambling license will cost the operator $10 million.
What are the chances for SB 524?
The higher tax rate compared to the other two online gambling bills means that the issue of taxation could turn into SB 524’s biggest obstacle. Many analysts agree that a 14% rate – as proposed in the previous bills – is a more logical rate at this point, seeing as so the industry will be in a fledgling stage for its first few years. If the industry, indeed, proves to be as revenue-generating as proponents predict, the tax rates could always be risen.
In addition, Senator Costa’s bill increases the cost of a gambling license from $8 million in the previous bills to $10 million. Again, this may be too much of an increase and could deter potential operators from seeking to bring their business to the new Pennsylvania industry. If SB 524 is to advance at all, lawmakers will need to find a middle-ground. Some say that Pennsylvania should not tax operators more than 20% if they want them to be able to run profitable businesses in the state.
Another obstacle in SB 524’s way could be the continued claim by the land based industry that online gambling may cannibalize their business. This comes despite the fact that research shows that this is not true and that a viable online gambling industry actually boosts the numbers at land-based casinos.
