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Moody’s, a credit-rating agency, was taking a closer look at the gaming package that PA passed last week.
While it said the state will benefit from tax receipts, it was not bullish on the prospects for existing gaming operators in PA. New satellite casinos and video gaming terminals around the state would serve to cannibalize some existing revenue, the report said.
It did not appear to lump online gambling in with those concerns. But it still called out the high tax rate.
Here’s what Philly.com wrote about the Moody’s report:
Though online gaming in Pennsylvania would provide a revenue boost for operators, the proposed 52 percent tax rate is higher than the 16 percent rate imposed by New Jersey, “making it unattractive,” Moody’s said in the report issued Tuesday. It noted that New Jersey’s online-gaming revenues have reached only about $235 million since legislation was passed in 2013.
With an additional two percent going to local municipalities, the effective tax on online slots is actually 54 percent. The rate for online table games and poker is 16 percent in PA.
The full Moody’s report is available here (for purchase).
The tax — and licensing fees — have put the prospective PA online gambling market in a bit of limbo.
Getting into the online gambling business should be a no-brainer for most existing casinos. But because of the tiered nature of both licensing and tax rates, it’s not exactly clear who is going to apply for which licenses, and how the market will shake out.
The when for online gambling is also up in the air, as the Pennsylvania Gaming Control Board has a lot on its plate with the many facets of the gaming expansion. But CapitolWire (subscription) reports that online gambling should be easier to implement than other gaming expansions, in talking PGCB spokesperson Doug Harbach:
The board is on more familiar ground when it comes to implementing internet gambling and fantasy sports betting. Board officials have testified at numerous legislative hearings on internet gambling and have New Jersey’s experience to draw on. The board has published a report on fantasy sports betting.
“We’ve done a lot of things to get ready for this,” said Harbach.