Pennsylvania iGambling Bill Signed into Law

Pennsylvania has officially become the fourth US state to authorize online gambling after Governor Tom Wolf (photo) put his signature to House Bill 271. The piece of legislation was given the green light by both the Pennsylvania House and Senate last week, before Gov. Wolf gave it his final approval on October 30th.

In addition to a whole range of gambling products, the Keystone state now also joins Nevada, Delaware and New Jersey in offering online poker within its borders. Rather than spending valuable time building up its online poker market, though, Pennsylvania will also be uniquely placed to join and take immediate advantage of an online poker sharing compact agreed between the other regulated states earlier this month.

In terms of costs, those operators applying for an online license to offer poker, table games and slot machines will need to pay $4 million for each individual product, or alternatively $10 million if they would like to offer all three verticals. Companies offering poker and tables games will subsequently be taxed at a rate of 16% on their gross gaming revenue (GGR), although the 54% tax on internet slot machines has caused consternation amongst proponents who see the incredibly high rate as “completely unworkable”.

One such critic is Chris Sheffield, Senior Vice President of Penn National, who explains that the rate is unviable, especially considering the cost of investing in an online licence, as well as the products’ setup and ongoing costs. As he then explains:

“I really can’t see anyone making a return unless they are in for the very long-term and its likely some early operators will bail out at some stage as has happened in new markets before.”

House Bill 271 also permits tickets for the state’s lottery to be sold online, as well as the possibility of daily fantasy sports being offered in the future, if the required clearance is given by Congress. Finally, PokerStars may be prevented from applying for a Nevada online poker license on account of its ‘bad actor’ label, but no such term is applied to it in Pennsylvania, paving the way for the New Jersey and Pennsylvania to potentially pool their combined 22 million state populations.