It’s been a whirlwind journey for online gambling in Pennsylvania

Where a hearing was held today to discuss the fate of the industry.

The House Gaming Oversight Committee’s hearing on Tuesday morning sought to provide an update on the uncertain status of daily fantasy sports and online gambling. Overall, the meeting was positive for iGaming proponents, though some concerns were voiced over the treatment of smaller fantasy sports operators.

Chairman John Payne, the author of HB 2150, implored all speakers to use the CliffsNotes versions of their testimonies. Reasonable cases were made as to why online regulation is necessary, but no vote was held. The House of Representatives already voted on and passed HB 2150 back in June; the Senate’s last chance to vote on the bill will be from 24-26 October, at which point it may have to be shelved until next year.

Tuesday’s hearing examined the local share tax, an issue that could be combined with the proposed online gambling legislation. Enacted with the state’s 2004 gambling law, the local share tax requires all casinos except those in Philadelphia and the resort venues in Valley Forge and Nemacolin to pay 2% of their gross revenue or $10 million, whichever sum is greater, to a host municipality.

On 28 September 2016, the Pennsylvania Supreme Court ruled this tax unconstitutional on the grounds of unfair treatment, and gave the legislature 120 days to suggest a fix. If no fix is applied, townships and counties across the state will face budget difficulties, as many of them rely on the casinos’ revenue. Distribution of these revenues is also a hurdle, since towns without casinos desire some portion of the revenue, and towns with casinos are clamoring for more.

Pennsylvania has been toying with the idea of online gambling since 2013, but only in the past year or so has the idea taken any real shape. Rep. John Payne introduced HB 649 in February 2015 in an effort to generate additional revenue by way of online gambling. Payne pointed to the success of online gambling in Nevada, New Jersey and Delaware as proof that regulation works. Though HB 649 eventually failed to pass vote, a new bill, HB 2150, took its place. This passed and was sent to the Senate, and has been stuck there ever since.

At today’s hearing, John Pappas, executive director of the Poker Players Alliance, spoke first, commenting that there is no political justification for delaying the regulation of Internet poker. Immediate concerns included the lack of consumer protection and revenue that is continually lost by players using unregulated sites.

Pappas mentioned Full Flush Poker, an unregulated online site that ate millions in player deposits when it shut down unexpectedly earlier this month, leaving players no way to get their money back. Regulator accountability and trusted gaming companies are essential for player safety, Pappas argued.

New Jersey, in particular, was pointed out as an example of what can go right with regulated online gaming. The state has had success in its use of geolocation services, the prevention of underage access and help for problem gamblers.
Online poker can only benefit from Pennsylvania joining the player pool since, as a peer-to-peer game, a certain number of players is required for games to be viable. Pennsylvania joining a network with other poker-friendly states would increase revenue and keep players coming back.

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