Pennsylvanian lawmakers briefed on internet gambling

A senior executive from Caesars Interactive Entertainment, Marco Ceccarelli, gave Pennsylvanian lawmakers a demonstration Tuesday of the advanced technologies used by online casino operators to ensure that internet punters are within state borders, and that their ages and identities are verified.

The demonstration took place at the Capitol in Harrisburg a day prior to a scheduled hearing by lawmakers on Wednesday morning.

Demonstrating a real-time interactive map using cellular and WiFi triangulation to display the exact locations of everyone logged onto Caesars Interactive games, Ceccarelli explained in detail how geo location, tracking, identity and age verification and responsible gambling technology all interact to ensure compliance with state laws and protect the consumer.

Ceccarelli said that properly regulated operators enable players to monitor and control their gambling experience and empower them to set deposit limits, time limits and net loss limits, to avoid losing more than a certain amount every month.

Another Caesars executive, Michael Cohen, told lawmakers that there are thousands of websites that illegally facilitate online gambling by US gamblers, typically operated from outside the USA. He said these operators offer less consumer protection and contributed nothing to state taxes.

Cohen said that in order to register for online gambling, a potential player must go through several checks that include determining his or her age, address and Social Security number.

The demonstration was well-timed, given that state Sen. Kim Ward has scheduled the Senate Community Economic and Recreational Development Committee hearing on Wednesday morning to give casino representatives a chance to address online gaming.

Ward says lawmakers haven’t yet determined a potential tax rate for online gaming, and Cohen flagged the higher cost of technology that operator’s face as something to keep in mind.

He cited one study that found a 14 percent tax rate would lead to a gross profit of only 7 percent for the online gaming operator.

“If the tax rate is the same as the slot machines in the brick-and-mortar casinos … no one will participate,” Cohen said. “It’s a license to lose money.”

At 55 percent, Pennsylvania has one of the highest tax rates in the nation on land-based slots.

Cohen also assured brick and mortar operators that online gambling does not pose a competitive threat.

“Actually, it’s the opposite effect. We’ve seen no cannibalization,” he said. “We’ve seen that more players are coming to the bricks and mortar casinos because they’ve been playing online.”

He explained that online gaming attracts a different demographic, with 60 percent of online gamblers in the 21 to 39 age bracket – only about 30 percent of the typical land casino clientele.

State Rep. John Payne introduced bill HB 649 to the state House in February seeking to legalise online gaming and establish a 14 percent tax rate and a $5 million licensing fee .

Payne said Tuesday that the state brings in $1.3 billion from casinos, and he wants to increase that amount to around $2.3 billion.

“We keep the children off of Internet gaming,” said Payne, who chairs the House Gaming Oversight Committee and supports strictly regulated online betting. “We keep the compulsive gamer off. We know where the revenues are going. We will audit it. We know what the payout is and, most importantly, we’ll get some tax revenue from online gaming.”

The dissenting voice came from Mike Barley, a spokesman for the Coalition to Stop Internet Gambling and a former director of the state Republican Party, who commented: “I don’t think we need to make everyone’s cell phone, everyone’s smart device, everywhere you are, a casino device to go gamble.”

Related and similar