Pennsylvania Online Poker News and Developments

PA Online Casino and Poker Sites

Pennsylvania is officially the fourth state in the US to legalize online poker or casino games, joining Delaware, Nevada, and New Jersey.

Gov. Tom Wolf signed a bill into law in 2017 that authorizes and regulates online gambling, and a full rollout is expected late in 2018.

Scroll down for the latest news and analysis of the developing situation for regulated online gambling in PA.

Pennsylvania iLottery

The Pennsylvania lottery is now online, for all players age 18 and older. Learn more about PA online lottery.

PA regulated online gambling news

Snapshot: Week of Oct. 15, 2018

Pennsylvania online poker 2018 – FAQ

Below are some questions and answers related to PA online gambling.

Who will be able to play?

Broadly speaking, individuals located in the state of Pennsylvania who are 21 and over can participate. You do not have to be a resident of Pennsylvania to play.

Employees of land-based licensees and key employees of platform providers are excluded, as are individuals who are barred from land-based casinos and individuals who have elected to self-exclude.

What games will be available?

In simple terms, online casino games and online poker games will be available. But the bill gives the Pennsylvania Gaming Control Board (PGCB) reasonably broad latitude to approve a wide array of games.

Due to the unique taxation structure that penalizes slot play and favors table games/poker, some new game variants may be developed for the Pennsylvania market that attempt to appeal to slot players while staying within the definition of a table game or a poker game.

Who will be able to offer online casino and poker?

The key licenses are initially limited to land-based casino licensees. With some licenses electing not to participate, the door is also open to “qualified gaming entities,” who do not have to have a land-based presence in PA.

Casinos have begun to partner with current and prospective online casino and poker operators, much as we’ve seen in New Jersey.

How many sites will there be?

This is an open question. The licenses to operate are limited based on the number of casino licenses issued by the state. As things currently stand, that means there are:

  • 13 licenses to operate online table games
  • 13 licenses to operate online slots
  • 13 licenses to operate online poker

That makes room for as many as 39 brands, but the number of licenses doesn’t necessarily equate to the number of sites.

New Jersey’s online casino market is a good example; there, the number of Internet Gaming Permits (similar to PA’s certificate) is limited to Atlantic City casinos. But licensees are able to partner with multiple brands under their license. Consider the Golden Nugget, which has the Golden Nugget online casino, Betfair’s NJ online casino, and the SugarHouse online casino operating under the Golden Nugget’s license.

Skins need to be partnered with a certificate holder and display their brand prominently.

Who are the current casino license holders in PA?

  • Harrah’s
  • Hollywood
  • Lady Luck
  • Meadows
  • Mohegan Sun
  • Mount Airy
  • Parx
  • Presque Isle
  • Rivers
  • Sands Bethlehem
  • SugarHouse
  • Stadium
  • Valley Forge

Will PA share player pools with other states?

The expectation is that they will.

Currently, Nevada and Delaware share player pools. Those states recently announced a deal with New Jersey that will see NJ online poker players added to the NV / DE pool. That will go live May 1, 2018 for WSOP and 888 players.

As Pennsylvania’s bill clears the way for interstate play, and given that regulators in New Jersey have confirmed that talks between the states about sharing players have been ongoing, it appears that there will be few hurdles on the path to interstate online poker for players in Pennsylvania.

What are the tax rates for PA online gambling?

There are three distinct tax rates:

  • 54% for “non-peer-to-peer interactive games which simulate slot machines”
  • 16% for “non-peer-to-peer interactive games which simulate table games”
  • 16% for “peer-to-peer interactive games”

Tax is based on gross gaming revenue, which is defined as “the total of all cash or cash equivalent wagers […] minus the total of cash or cash equivalents paid out to to registered players as winnings.”

How the tax revenue and local share are distributed is described in 13B52 and 13B53, respectively.

What are the license fees?

They vary slightly.

  • During the first 90 days after licensing opened, casinos could only buy all three categories (poker, table, and slots) in one bundle for $10 million.
  • During days 91-120, casinos could buy individual categories for $4 million apiece.
  • After day 120, “qualified gaming entities” can submit an application for the remaining licenses at a cost of $4 million per category.

PA interactive gaming permits are valid for five years.

How much revenue will PA make from online gambling?

There are two components to this question: The revenue from license fees and the ongoing revenue from taxes.

  • License fees: Our white paper on the prospects for PA online gambling figures that the state will see $120 million from licensing fees.
  • Tax revenue: Our revenue forecast estimates that the state will receive $400 million in taxes over five years.

Who oversees online gambling in PA?

The Pennsylvania Gaming Control Board (PGCB).

Background on Pennsylvania online gambling

Pennsylvania took multiple looks at online gambling, and gaming in general for years leading into the 2017 session. A bill finally got to the finish line that fall, when H 271 became law. Passage bought to a close five years of discussion of online gambling in the state.

The law was a part of negotiations over revenue to make up a shortfall in the state budget and is expected to generate $200 million to $250 million in new money for the state.

Other than iGaming, the law also legalizes and/or regulates, among other things:

  • Online lottery
  • Video gaming terminals
  • Satellite casinos
  • Daily fantasy sports
  • Sports betting

Senate punts on legislation in 2016

For a time, it looked like Pennsylvania was a slam dunk to legalize online gambling in 2016. Those hopes were dashed when the Senate failed to reach a consensus before the last scheduled session day.

After a strong but ultimately fruitless push in 2015, the latest legislative effort started off with more of a whimper than a bang. It wasn’t until late May that the wheels began turning. That’s when the House of Representatives considered two gaming reform amendments.  This amendments, if passed, would become part of a separate gaming bill, HB 1925.

Amendment A7622

The first, A7622, packaged online poker/casino and other reforms alongside the inclusion of video gaming terminals (VGTs) at non-casino locations. The other, A7622, was a mirror of Rep. John Payne‘s omnibus gaming reform bill (HB 649) from the year prior, and did not include VGTs.

Confusion ruled the day, and both amendments were soundly defeated. (Although the margin of defeat for A7622 was significantly smaller.)

Momentum shifted to the side of online gambling proponents in late June. That’s when a new, multifaceted gaming reform bill that linked online gambling, daily fantasy sports, and other gaming reforms emerged in the House.

An amendment to allow VGTs nearly derailed the bill, failing by a vote of 118-79. But a last-minute amendment by Rep. Rosita Youngblood (the aptly titled Youngblood Amendment) calling for the exclusion of VGTs, turned the tide. The amendment ultimately passed 115-80.

House Bill 2150

In the week that followed, HB 2150 saw a whirlwind of activity.  This culminated in the bill clearing a vote in the House.

In July, Governor Tom Wolf allowed a $1.3 billion revenue package that earmarked $100 million for gaming reform, to become law. All indications pointed to licensing fees from online gambling operators would be counted on to fill the gap.

Unfortunately, the Senate signaled that it would not be addressing online gambling legislation until the fall. In the interim, the legislature raised taxes on casino table games, while online gambling advocates spoke up about the need to pass legislation sooner rather than later.

The path to regulated online gambling in Pennsylvania

2013

Online gambling first appeared on the legislature’s radar in April 2013, when State Rep. Tina Davis introduced HB 1235. The bill would permit both online poker and casino within the commonwealth. It also set operator licensing fees at $5 million, and called for a 28 percent tax rate on gross gaming revenue.

By June of this year, a general lack of interest among lawmakers resulted in the House Committee on Gaming Oversight chair Tina Pickett recommending the bill be stalled until 2015. But it wouldn’t take nearly that long for the ball to begin rolling again.

In December 2013, the Senate took a mammoth step forward when it passed SR 273. The resolution tasked Econsult Solutions with conducting a study that would measure the economic impact of online gambling.

2014

The results were published in May 2014, and were cause for optimism. Econsult estimated that online gambling would yield $68 million in first year tax revenue, and $110 million annually going forward. It also concluded that online gambling would have a complementary impact on land-based casino revenue.

Granted, the revenue estimates are always taken with a massive grain of salt, as they presumed a blended 20 percent tax rate on online poker and 60 percent on slots.

In either case, the results proved favorable enough for State Sen. Edwin Erickson to introduce a new online gambling bill (SB 1386) in June 2014. There was little action on that particular bill, but it set the stage for what would prove a very active 2015 session.

2015

Rep. John Payne introduced HB 649 in February 2015. Payne viewed online gambling as part of the solution to the state’s “projected $2 billion budget shortfall.” He backed his beliefs by championing online gambling legislation efforts for the next two years.

In the spring of 2015, two competing bills emerged in the House. One, HB 920, was from Tina Davis, a near replica of her 2013 bill. The other, Nick Miccarelli‘s HB 695, was an online poker only bill. Of the three, Payne’s became the most likely candidate for serious consideration.

Ahead of the June 30 budget deadline, there was the introduction of a fourth bill — this one from the State Sen. Kim Ward. SB 900 was significant in that it marked the Senate’s official entry into the conversation. Unfortunately, SB 900 was radically different than HB 649. It called for a 54 percent tax rate, a $10 million operator licensing fee, in-person registration, and the exclusion of Category 3 casinos.

Suffice it to say, the rigid nature of SB 900 would make it so license holders would have trouble operating profitably.

The Senate held two hearings on online gambling in June 2015. After that little was heard on the topic until the fall. In October, Pennsylvania was still in the midst of a budget stalemate. When Gov. Tom Wolf’s tax plan saw defeat in the House, he became willing to discuss new revenue sources, online gambling among them.

So close and yet so far away…

The following month, the GO committee passed HB 649 by a margin of 18-8. This marked the first time an online gambling bill passed a vote in Pennsylvania. But by then, an omnibus package was attached to the bill. It called for slot machines at non-casino venues and airports, Category 3 casino expansion, and a report on daily fantasy sports, among other reforms.

It’s believed that the controversial elements of the bill, namely allowing video gaming terminals at non-casino locations, was one of the reasons efforts stalled in 2015.

Inside Pennsylvania’s land-based casino industry

Pennsylvania is currently home to 12 land-based casinos. Together they create the second-largest gambling economy in the United States. It’s to believe that the industry was non-existent just over a decade ago.

The ball got rolling in 2004, when lawmakers authorized 61,000 slot machines at existing horse tracks, resorts and slot parlors. Concurrently, the state set up the Pennsylvania Gaming Control Board. The Board would issue up to 14 licenses, and provide regulatory oversight for the nascent industry.

On December 20, 2006, six licenses for existing horse racing venues and five more for standalone casino were awarded. Of the 11 licensed operators, 10 opened or expanded their facilities by 2010. And by 2011, two Category 3 casinos — Valley Force Casino Resort and Lady Luck Casino Nemacolin — had also flipped over the open sign.

The industry took a monumental step forward in early 2010, with the legalization of table games — including poker — at slots casinos. By July 2010, top earners Sands Bethlehem, Parx Casino, and Harrah’s Chester (later rebranded as Harrah’s Philadelphia) had all instituted table games.

It was then that land-based casino revenue really began to take off, growing from $1.62 billion in 2008, to $2.49 billion in 2010, and $3.16 billion in 2012.

For fiscal 2015-16, PA recorded $3.2 billion in revenue — a record high. Since, the industry has mostly stabilized, and is even beginning to show a few chinks in the armor.

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