Pennsylvania’s House of Representatives approved late on Wednesday a wide-ranging gambling bill that, if signed into law in its current form, will change the state’s gambling landscape significantly.
Generally speaking, the 675-page legislative piece will legalize online gambling and daily fantasy sports, will allow for the addition of video gaming terminals across locations with liquor licenses, and will authorize the addition of tablet gaming at select airports.
HB 271 was amended by the Legislature’s lower chamber and was voted in favor of on Wednesday by the House Rules Committee. The full House then passed the proposed Legislature by a 102-89 margin. The bill will now need to be reviewed and voted on by the Senate.
Wednesday’s positive vote came a fortnight after the Senate had passed its own gambling bill. The House and the Senate pieces are very similar in their nature – they both call for massive gambling expansion across the state. However, the two pieces approach several very important matters in quite a different matter, and this may eventually turn out to be a big stumbling block in the state’s gambling expansion effort.
In the first place, the House bill’s VGT provision will probably be contested in the Senate. Under HB 271, around 40,000 of the slots-like gaming machines will be added at truck stops, off-track betting parlors, bowling alleys, bars and other establishments holding a liquor license. No VGT provision had been included in the Senate’s bill.
The other substantial difference between the two legislative pieces is the way these propose to tax online gambling, if it becomes legal in the state. Under the House bill, iGaming operators will have to pay a 16% tax and a one-off upfront license fee of $8 million.
The Senate bill, on the other hand, splits online gambling offering into two categories – online slots and table games and online poker. Operators of online casino games, both slots and table games, will be taxed at 54% on revenue. Online poker operators will be imposed a 16% tax rate. The application for a casino license will cost interested companies $5 million. The same goes for online poker license applicants.
Despite those significant discrepancies, the two legislative pieces are fairly similar in their other provisions. They both offer a resolution to the local share tax issue that emerged last year when the Pennsylvania Supreme Court voided the law that had determined casino payments to host municipalities and counties for years.
Under the House bill, casinos will have to pay 2% on their annual slot machines revenue to their host county and the annual amount of $10 million to their host municipality. Philadelphia’s SugarHouse Casino and smaller-scale resort casinos around the state will be taxed differently – they will have to contribute 2% to both their host county and municipality.
Other provisions that the Senate and House bill share include the legalization of online lottery sales, the addition of tablet gaming in several Pennsylvania airports, and the opportunity for the state’s casino operators to apply for a sports betting license, when and if a federal sports betting ban is lifted.
Upon presenting HB 271, House legislators said that the bill should be perceived as a build-on to the Senate proposal and that it aims to bring further revenue to the state’s coffers. Under the Senate’s bill, Pennsylvania is estimated to receive between $109-$147 million. If the House version is approved in its current form, the state’s gambling industry is expected to contribute between $250-$300 million to a state budget that needs additional sources.
