Another Pennsylvanian online gambling alternative?

Different perspectives are coming thick and fast in the Pennsylvanian political quest for consensus on the contents of HB271, which is currently being populated in the Senate Community, Economic and Recreational Development Committee after being referred by the House to motivate senators to lay down their requirements instead of ignoring the online gambling legalisation issues (see previous reports).

Our readers may recall that late April CERD sent the bill to the Senate floor, only to have it returned with a mandate to “fill ‘er up” before it goes to the floor.

Since then senators apparently unconvinced that online gambling does not pose a risk to the land-based casino gaming business have proposed imposing a punitive 54 percent tax rate on internet slot revenues (the same as that levied on the land operators) and a more bearable 16 percent on online poker activity.

The Senate appears to be equally unconvinced by industry warnings that such high levels of online gambling taxation are uncompetitive, impractical and will discourage the state’s land operators from taking up the exclusive online licenses.

This week another alternative in the seemingly endless stream of proposals and counter-proposals coming out of the Pennsylvanian political establishment is that if any of the 12 online licence offers are rejected by the state’s land operators, these could be available to a wider market.

The chair of the Senate CERD committee, Sen. Mario Scavello, raised the option in an interview with Online Poker Report in which he outlined plans for action early next week.

The idea is to mitigate the risk of the state losing out on tens of millions of dollars should Pennsylvania-licensed land operators decide to resist going online, Scavello explained

Scavello said that he and his colleagues in the Senate expect to fill all 12 licenses proposed, but if they were not taken up in the original exclusive offer “…then we might have to get some other companies who want to purchase a license.”

Existing Pennsylvania licensed land operators would have either three or six months to decide whether to take up online licensing once a finally agreed bill is passed by the legislature and signed into law by the state governor, he revealed.

The Senator also revealed that HB271 has thus far been populated with proposals that include online poker and casino provisions, but that the inclusion of video gaming terminals, which has raised the ire of local land operators, is not.

The bill will also include a solution to the local share tax on casino revenue in compliance with judicial rulings (see previous reports).

Scavello and other senators have in the recent past pointed out that Pennsylvania’s 54 percent tax rate on land slots revenue and lower rates for table games, although the highest in the United States,
have contributed handsomely to the state, and the (land) industry has thrived.

And they fear that a lower tax rate for online will prejudice rather than complement state revenues despite the wealth of empirical evidence to the contrary.

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