Pennsylvania Votes to Legalise Online Gambling

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The tense wait for there to be a fourth US state with legalised online gambling could come to an end in the months ahead. As June 2016 came to a close, the Pennsylvania House of Representatives voted to approve legislation that would legalise daily fantasy sports and online gambling.

Now that the House of Representatives have approved the legislation with a 114-85 majority, the next stage is for the Pennsylvania State Senate to have their say. Without approval from the State Senate, the concept of Pennsylvania online gambling will not become legal like it is in Nevada, Delaware, and New Jersey.

How the System Would Work

Entitled HB 2150, the legislation will entitle 12 Pennsylvania casinos to establish partnerships with igaming software providers to launch online poker and casino sites. A week before the House of Representatives approved the legislation on 28 June 2016, HB 2150 had been denied because it included video game terminals. However, an amended HB 2150 obtained clear approval after the change was made.

The ramifications of legalised online gambling in Pennsylvania mean that land-based casino operators would be required to pay $8m [£5.93m] for their first digital gaming licence, with each renewal charged at $250,000 [£185,000]. There are yet more costs to consider, with operators charged 16% tax on their online revenue. Ultimately, 14% is for the state, while 2% will go to economic development initiatives.

Within the legislation, a cost has also been defined for software partners. Quite simply, any company that wants to work with a Pennsylvania-based operator will have the pay their own licence free of $2m [£1.48m]. Then they will also have to cover a cost of $100,000 [£74,000] for each of their licence renewals.

The one area of disappointment for operators will be that mobile gaming is majorly restricted. Operators will be able to offer mobile gaming, but they can only do so at Pennsylvania airports, which is a bizarre wrinkle to include. Those who wish to explore this avenue can acquire licences at a cost of $1m [£741,000] per airport, with a 34% tax applied to all revenue generated.

Will the State Senate Approve?

There is still a long way to go if Pennsylvania is to legalise online gambling. Fundamentally, it could come to the fact that the state has an enormous budget deficit to correct. For perspective, the state is in the process of attempting to pass a $31.6bn [£23.4bn] proposal to tackle the issue.

Pennsylvania Governor Tom Wolf has been widely reported in the media as reluctant to legalise the act, but he appears to be considering it in order to ease the state’s financial concerns. That being said, he will need to convince Sands Bethlehem CEO Mark Juliano, who runs the Pennsylvania-based casino and believes online sites will cannibalise traditional revenue.

If Pennsylvania does decide to legalise digital gambling then the state’s residents might soon have access to online poker. 888 would surely be one of the first operators to enter the new market, as it already provides US online gambling services.

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