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This week it was State Representative Nick Miccarelli’s turn with HB 695, a reintroduction of an online gambling bill he first floated last year (as HB 2297), that seeks to legalize online poker in Pennsylvania.
Get more information on HB 695 and sign up for bill alerts at PALegis.
All of this is occurring as the Pennsylvania House Gaming Oversight Committee prepares for a hearing on Internet gambling on April 16th.
On its surface Miccarelli’s bill (HB 695) looks similar to Payne’s:
That’s where the similarities end.
As noted above, Miccarelli’s bill will be poker-only. Payne’s was originally believed to be poker-only, until it was recently amended to correct the definitions, which turned it into a comprehensive online gambling bill.
“Poker is unlike banking games in many respects that make it best for the introduction of interactive gaming, Miccarelli stated in his memorandum on the bill.
“Poker operators are not participants in the games and are indifferent as to the outcome.”
Another notable difference between the two bills is that unlike Payne’s bill, Miccarelli’s will includes strict bad actor / tainted asset language, which seems to be designed to prohibit PokerStars from applying for or receiving a license.
HB 695 is clear on so-called bad actors:
The board may not issue a license to or otherwise find suitable any prospective licensee or significant vendor, or key interactive gaming employee of a licensee or significant vender, who has:
(i) accepted or made available wagers on interactive games using the Internet from persons located in the United States after December 31, 2006, unless licensed by a Federal or State authority to engage in such activity; or
(ii) facilitated or otherwise provided services with respect to wagers or interactive games using the Internet involving persons located in the United States for a person described in subparagraph (i), if such activities or services would cause such person to be considered a significant vendor if those activities or services were provided with respect to interactive games pursuant to this chapter, and if such person acted with knowledge of the fact that such wagers or interactive games involved persons located in the United States.
Additionally, HB 695 apparently removes any chance that Amaya’s purchase of PokerStars would scrub them from the Bad Actor list.
The bill prohibits “Purchased or acquired, directly or indirectly, in whole or in significant part, a third party described in paragraph (1) or will use that third party or a covered asset in connection with interactive gaming.”
HB 695 considers the following to be potentially “tainted assets”:
(1) any trademark, trade name, service mark or similar intellectual property
(2) any database or customer list of individuals residing in the United States… with or through an Internet website or operator not licensed by a Federal or State authority…;
(3) any derivative of a database or customer list described in paragraph (2);
(4) software, including any derivative, update or customization of such software, or hardware relating to the management, administration, development, testing or control of the Internet website, the interactive games or wagers offered through the website or the operator.
The two bills present two very different paths for online gambling expansion in Pennsylvania, but Payne’s bill will likely appeal to more lawmakers and find more support among iGaming advocates.
Miccarelli’s bill will likely struggle to gain traction for two reasons:
Payne’s bill currently has 20 cosponsors (interestingly, Representative Miccarelli was one of the cosponsors) while Miccarelli’s bill has just four cosponsors.
This gap is not based on Payne’s bill being introduced ahead of Miccarelli’s; Payne began seeking out cosponsors on February 13th, while Miccarelli sent a cosponsor memorandum out a week earlier, on February 6th.
New Jersey’s online gambling industry produced $123 million in Gross Gaming Revenue in 2014, but only $29 million of that amount was generated at the online poker tables.
If Pennsylvania produced similar numbers in Year 1, the difference in the state’s take (14%) would be:
If, as Miccarelli states, the purpose of the bill is to help reduce property taxes in the state, $4 million isn’t going to be enough of a lure for lawmakers to take a controversial vote on expanding gambling.
As important as the revenue numbers are, Miccarelli’s bill has a more serious problem, as it is effectively running into the wind.
By excluding Amaya/PokerStars HB 695 not only loses the potential lobbying dollars of PokerStars, but it will also lose the support of Caesars Entertainment, who has partnered with PokerStars in an effort to advance online gambling in the U.S., and in doing so withdrawn their previous calls for Bad Actor/Tainted Asset clauses.
Image credit: Grisha Bruev / Shutterstock.com.