Pennsylvania Casinos Not Betting on Online Gambling, But That Could Soon Change

Posted on: June 18, 2018, 01:00h. 

Last updated on: June 22, 2018, 09:08h.

Of the 12 Pennsylvania casinos, none have yet submitted applications to become licensed to operate online gambling.

Pennsylvania casinos Tom Wolf
Governor Tom Wolf gave Pennsylvania casinos more options to grow revenues last fall, but there’s been plenty of reluctance among operators over costly fees and taxes. (Image: Gov. Tom Wolf)

Last October, Governor Tom Wolf (D) signed a massive gambling expansion package that included the legalization of internet casinos. Now eight months later, and Keystone State residents still can’t place a bet from their home or mobile device.

A spokesperson with the Pennsylvania Gambling Control Board (PGCB) told Online Poker Report recently that no interactive gaming applications have been received.

Pennsylvania wants $10 million per internet gaming authorization. The fee allows casinos to operate internet slots and table games (including poker).

Should a Pennsylvania casino wish to operate online, the state would collect 14 percent of revenue on poker and table games, and 52 percent on interactive slots.

Wolf and the Republican-controlled General Assembly passed the gambling expansion in part of trying to bridge a state budget funding gap. The legislature assumed $200 million in new annual revenues from the package, which in addition to online gambling includes up to 12 satellite casinos, sports betting, slots inside truck stops and airports, and daily fantasy sports.

Folding on Poker

Pennsylvania lawmakers bundled slots, poker, and table games together for $10 million with the thinking that the casinos would jump at the chance.

After the initial 90-day application period, which will expire next month, casinos will be able to purchase iGambling applications a la carte, with each category costing $4 million.

In New Jersey, casinos have combined generated $9.38 million in poker rake and fees January through May. That’s a nine percent year-over-year loss.  

Betting on Sports Gambling?

Along with online casinos, Pennsylvania’s gambling expansion called for the regulation of sports betting should there be a change to federal law. That of course happened last month when the Supreme Court of the United States overturned the longstanding prohibition on the gambling activity.

With the Professional and Amateur Sports Protection Act (PASPA) now a thing of the past, Pennsylvania can move forward with determining its own laws on sports betting. The PGCB began accepting sports betting applications on May 31.

Regulatory specifics are still being decided, but casinos have already voiced concerns that while they might be willing to pay the one-time $10 million licensing fee for sports gambling, the 36 percent tax on net revenues is far too high.

Steve Crawford, a lobbyist that works on behalf of three Pennsylvania casinos, told The Patriot-News last week, “There’s no secret that we believe the tax rate is too high. We would like to see it lowered.”

Pennsylvania’s final regulatory law governing sports betting is expected to allow remote bets to be placed within state borders.

New Jersey, the state that successfully convinced the Supreme Court that PASPA was unconstitutional, taxes sports betting at 8.5 percent for in-person bets, and 13 percent for online/mobile wagers. Nevada, the state that lost its full-fledged sports betting monopoly through the Supreme Court repeal, taxes sports wagering revenue at 6.75 percent.

Sports Handle founder Brett Smiley called Pennsylvania’s sports betting proposal “absolutely ludicrous.”  He added, “I would be shocked if there aren’t conversations happening right now between casino operators and the state to lower that tax.”