Pennsylvania Online Casino News and Information

PA Online Gambling legislation updates

The history of Pennsylvania online casino and poker legislation is replete with failed bills. However, the state’s budget crisis and the need to tap new and recurring revenue streams means that there is a good chance iGaming legislation will finally be passed in 2017. Here are the latest updates in that fight:

Potential PA casino iGaming partnerships

While Pennsylvania has yet to legalize online gambling, the possibility remains tantalizingly close. In fact, several of the state’s 12 brick-and-mortar casinos are already preparing for that eventuality by forming partnerships with gambling software companies, which they hope will bear fruit when the industry gets the green light.

While the details haven’t yet been hashed out, using New Jersey as a model, we can surmise that each land-based casino will be allowed a handful of licenses which it can use to open up its own Internet gambling sites or to partner with one or more software brands.

Some of these relationships have already been confirmed by the casinos themselves, while others can be gleaned by their web of partnerships in the other states where online gambling has been legalized.

The following is what we know and what we can deduce about the future of Internet gaming alliances in the Keystone State.

Harrah’s Philadelphia (Probable partner: 888)

Harrah’s Philadelphia is owned by Chester Downs & Marina, a subsidiary of casino behemoth Caesars Entertainment Corp. In New Jersey and Nevada, multiple Caesars properties are already partnered with 888, which provides the platform for online casino games as well as peer to peer online poker at WSOP.com. 888 also has branded sites of its own, which includes its own poker site.

The software company has invested heavily in its All American Poker Network and Multi State Poker Network, both of which are designed to capitalize when and if iGaming is legalized in other states.

In all likelihood, 888’s relationship with Caesars would continue in PA, and would give properties in both states the chance to create poker compacts which would then feed into one large network.

Mohegan Sun Pocono (Probable partners: NYX Gaming/PokerStars)

The Mohegan Sun Pocono was purchased by the Mohegan Indian tribe in 2005, and was the first slots casino to operate in the state. In New Jersey, Mohegan Sun runs its own online casino through a partnership with Resorts, which it also manages. Also partnered with Resorts in NJ is online poker giant PokerStars, which could claim one of Mohegan’s other available licenses.

Mohegan Sun Casino is powered by NYX Gaming in the Garden State, and is very likely to turn to the same company for its PA offering. PokerStars’ poker room leverages its own award-winning software in New Jersey, which also runs a handful of casino games.

In October 2017, the governors of New Jersey, Delaware and Nevada struck a deal to allow operators to pool their respective poker players into networks. PokerStars would stand to gain immensely if it could expand out of NJ, the only state where it is currently allowed to operate.

Parx Casino (Confirmed partner: GameAccount Network)

Parx Casino is a state-of-the-art gambling property with over 3,500 slots, 130 table games and 80 poker tables. The casino has already solidified a deal with GameAccount Network (GAN) to provide its online casino software, should the industry go live. GAN currently powers Parx’s social casino, ParxOnline.com.

In 2015, GAN put out a press release confirming that it would work with Parx “for all forms of real money Internet gambling (including poker, for the avoidance of doubt) in the event the state of Pennsylvania enacts legislation to regulate real money Internet gaming.”

That said, statements by Parx officials over the past few years make it clear that the company is extremely wary, perhaps even opposed, to legalizing online gambling in the state. In 2014, Parx Chairman Bob Green commented that while he was skeptical of iGaming, the casino would play a role in shaping and participating in the industry if legalized.

In New Jersey, GAN provides the platform for Betfair Casino, one of the top grossing online casinos in the Garden State.

Mount Airy Casino Resort (Confirmed partner: 888)

Located in Mount Pocono, Mount Airy Casino Resort boasts 70 table games and over 1,800 slots. In 2015, 888 announced that it would provide the software platform for the property’s online casino and poker efforts, if iGaming becomes legal, via its All American Poker Network.

The following year, Mount Airy launched a cross promotional effort to advertise 888 Casino NJ on its website and inside its land-based facility. Players who sign up through Mount Airy can receive a $25 no-deposit bonus, which they can only use when they are physically inside the state of New Jersey.

888 also endeavors to host its own branded site, as it does in the Garden State, through its partnerships Caesars Interactive Entertainment.

SugarHouse Casino (Probable partner: Rush Street Interactive)

SugarHouse, owned by HSP Gaming and managed by Rush Street Gaming, is Philadelphia’s only casino. In New Jersey, PlaySugarHouse.com is partnered with Atlantic City’s Golden Nugget, and operates its own branded online gambling site using a platform developed by its iGaming wing, Rush Street Interactive. Even though it got a late start in the state – it launched three years after gaming went live there – it has done quite well for itself.

If PA decides to regulate, the casino will surely use the same in-house software, which it continues to refine in the Garden State.

Rivers Casino (Probable partner: Rush Street Interactive)

Rivers casino, located in Pittsburgh, is another Rush Street Gaming property and is therefore extremely likely to use the Rush Street Interactive gaming platform.

Sands Bethlehem (Probable partner: None)

Las Vegas Sands, Sands Bethlehem’s parent company, is headed up by billionaire Sheldon Adelson, a staunch opponent of the propagation of online gambling in the US. Adelson has waged a multiyear war against the industry and has contributed generously to lawmakers who push his bespoke anti-gaming bill, the Restoration of America’s Wire Act.

Adelson claims that his motivations are to protect the country’s most vulnerable residents, but others see nothing more than a cynical ploy to stave off competition to his land-based casinos. Unless the Sands Bethlehem is sold, the casino will not be launching an online gaming site.

Pennsylvania Gambling History Traces Back Over a Decade

Pennsylvania’s gaming history traces back a bit further, as slots were legalized in the state in 2004. Commercial casinos were first licensed in 2006, and table games followed in 2010. Presently, Pennsylvania is the second largest casino market in the country, trailing only Nevada in gross gaming revenue.

Representative Tina Davis (D) of District 141 pioneered the earliest official effort to legalize online gaming in the state back in April 2013 with the introduction of House Bill 1235 (HB 1235). The provisions in HB 1235 enabled existing casinos and slot machine license holders to apply for supplemental licenses that would have allowed them to set up online operations. Licensees would have been subject to a $5 million non-refundable authorization fee and would have paid a 28 percent tax on revenue from internet gaming.

HB 1235 would have authorized all manner of “table games, slot machine or any other game the Pennsylvania Gaming Control Board deems suitable for play on the computer.”  Games of chance the likes of bingo and keno would have been the only exceptions.

HB 1235 made it as far as the House Gaming and Oversight Committee before stalling. Reportedly, concerns about the possible detrimental effects of gaming expansion – as well as a high degree of uncertainty at the time about how successful New Jersey’s then-nascent online gambling industry would be – led to what amounted to a tabling of the bill for the balance of the 2013-14 legislative session.

2015 Brings Revival of PA Online Casino Legislative Efforts

With the state facing increasing budget issues, 2015 saw the revival of the online casino and poker topic, with both House (HB 649) and Senate (SB 900) bills being introduced. The latter proposed a particularly onerous 54 percent tax rate that was slated to be the highest in the world for regulated commercial online gambling.

HB 649 was co-sponsored by Representative John Payne (R) and his Democrat co-chair Nick Kotick, who was the new chair of the Gaming and Oversight Committee at the time, and set the minimum age requirement for players at 21. The bill called for a 14 percent state tax, plus a 2 percent local assessment fee, on gross online-gaming revenues. A one-time $5 million licensing fee for operators was also established, along with a $1 million fee for what were termed “significant vendors”.

SB 900, sponsored by Senators Kim Ward, Robert Tomlinson, Elder Vogel and Joseph Scarnati, was never able to gain true traction due to the aforementioned excessive tax rate. Other provisions in the bill included a “permit fee” of $10 million that would cover an initial five-year period, and a $1 million renewal fee thereafter. SB 900 also provided the Pennsylvania Gaming Control Board with the authority to determine which games were acceptable to offer.

In addition to these two main bills, there were two additional put forth in the House and one other proposal in the Senate:

  • Representative Nick Miccarelli’s HB 695, which sought to solely legalize online poker, called for a licensing fee of $5 million per operator, and taxed all interactive gross gaming revenue at 14 percent;
  • Representative Tina Davis second go-around on a gaming bill, HB 920, which called for the state’s Gaming Control Board to regulate all manner of online gaming, set an “authorization fee” at $5 million per operator, sought to “establish a reasonable tax rate that takes into account overhead and cost of operation for the casinos”, and directed that all proceeds from online gaming would be split between the Property Tax Relief Fund and the State Lottery Fund;
  • Senator Sean Wiley’s comprehensive proposal that designated the cost for a license at $500,000, set the tax rate at 36 percent, mandated that all online poker rooms would be operated by the state’s land-based facilities, and created a Casino Reinvestment Grant Fund that would receive all proceeds above $10 million annually in order to effectuate a school property tax freeze for the state’s senior citizens.

HB 649, after undergoing some facelifts courtesy of numerous amendments over time, made it the furthest. However, it ultimately was not passed during the 2015 session.

Pennsylvania Online Casino Bill Came Close in 2016

Two House-sponsored bills, HB 1887 and HB 2150, dominated a large share of the online gaming legalization debate in 2016. HB 1887 twice passed the House, with the second occasion having come later in the year after some amendments, including a temporary local tax share fix, were added.

Meanwhile, HB 2150 was a comprehensive gaming reform bill that additionally sought to regulate daily fantasy sports, authorize mobile gaming tablets at airports, and making the aforementioned temporary tax share fix permanent.  The bill called for an $8 million license fee for Pennsylvania online casinos and $2 million fee for “significant vendors.”

Although there was palpable optimism late in the year that HB 1887 would be the subject of a vote in the Senate, it ultimately stalled as well.

Renewed Optimism for Legal Pennsylvania Online Casinos

The new calendar year brings renewed hope that legalization of online gaming in Pennsylvania will finally become reality.

State Senator Jay Costa of Pittsburgh, who is the chamber’s Democratic leader, kick-started the wave of optimism when he authored a memo regarding his intentions to present a legalization bill early in the Legislative session. The memo, which was posted the day before legislators took their oath of office,  called for, among other things, allowing all forms of casino gambling online, regulating daily fantasy sports (DFS), and launching a five-year test of tablet gaming for travelers at the Philadelphia and Pittsburgh airports.

As per the memo, Pennsylvania would stand to generate $137 million in revenue from online gambling for the state’s 2016-17 budget solely from licensing fees. Under the bill, the internet gaming license that would be required and only made available to the state’s 12 large casinos and racinos would carry a cost of $10 million.

The bill also includes an array of other licensing/start-up fees, including $5 million each for internet gaming vendors, an airport tablet gaming fee in Philadelphia and Pittsburgh of $2.5 million apiece, and a $2.5 million license fee for DFS operators.

The memo also details that taxes on revenue from online gaming and DFS would be 25 percent, a significant reduction from the current 54 percent tax on slot revenue and 16 percent tax on table game revenue in the state’s land-based casinos, but a notable bump up from HB 1887’s online tax rate of 16 percent and DFS operator rate of 12 percent. Costa’s proposal would allow all casino games, including slots and table games, to be available online, although Internet gaming would be prohibited on casino property because of the difference in tax rates.

His proposal also would authorize iGaming tablets at the Philadelphia and Pittsburgh airports for a five-year pilot period and permit online lottery games.

Meanwhile, over in the House, Republican senators Kim Ward and Mario Scavello reportedly will work with other Republican leaders in the Senate on putting together a co-sponsorship memo on a comprehensive gaming bill that may also legalize ancillary slot facilities and allow gambling for travelers in the state’s airports.