Tax debate on online gambling in Pennsylvania continues
News on 28 Apr 2017
News on 28 Apr 2017
The new chair of the Pennsylvania House Gaming Oversight Committee, Rep. Scott Petrie has said that he is not convinced that a lower tax rate should be applied to online gambling once legalised, apparently supporting proposals that have suggested unrealistically high tax rates that could make online gambling unsustainable for operators (see previous reports).
In an interview with Online Poker Report, Petrie apparently saw no differences between land and online casino businesses and felt they should pay the same high tax, seemingly disregarding the effect this might have when compared with the reasonable 15 percent levied in the successful and neighbouring New Jersey market.
Petrie also opined that creating a lower tax rate for online operations may persuade the land casinos running those operations to channel more of their business to the Internet at the state’s (tax) expense.
Pennsylvania has the highest casino tax rates in the USA at 54 percent for slot machines and 16 percent for table games, and yet land operators are successful, Petrie pointed out.
“We have the highest tax rate in the country for gaming, and yet one of the most successful casino industries in the country – I’d say the most successful in delivering dollars to the state,” Petri said.
Rep. George Dunbar, who earlier this year proposed more reasonable tax rates in his HB 392 online gambling legalisation bill, continues to call for the 14 percent tax rate on GGR which the House passed last year (the prior bill eventually foundered in the Senate due to a lack of interest).
Dunbar claims that charging the land casino tax rate for online activity will kill off interest in licensing and deny Pennsylvania land operators a powerful new tool for creating interest and revenues.
He points to the added costs which are necessary in online gambling such as platform and content royalty costs, player promotions and retention, advertising, payment processing and geolocation.
House Bill 271, effectively an approved shell which the House has invited the Senate to populate with its online gambling expansion requirements, remains with the Senate Community, Economic and Recreational Development Committee.
Earlier this month the committee progressed the bill to the Senate floor for debate and a vote, only to have it returned “for further work” in respect of adding Senate content (see previous reports).
There is surprisingly little urgency apparent at present, given judicial and budget deadlines of May 26 and end-June; last week a joint House Government Oversight Committee – Senate Community, Economic and Recreational Development Committee hearing was scheduled, only to be cancelled due to meeting conflicts.
