However, before legal online casino play can begin in the Keystone State, the Pennsylvania Gaming Control Board is currently running background checks on online casino key personnel, the software providers whose technology will drive each PA each online casino and approve all the different game types that each online casino will offer to.

Contents

From the Associated Press:

Wolf says he’s signed the massive gambling expansion bill passed last week.

— Marc Levy (@timelywriter) October 30, 2017

The move came quickly after the legislature passed the gaming bill late last week, with the legalization and regulation of daily fantasy sports, sports betting and more also included. The bill Wolf signed was H 271. Wolf’s signature was the last step for the bill to become law.

Pennsylvania officially joins New Jersey, Nevada and Delaware with legal online gambling.

Almost game on for online poker, gambling in Pennsylvania

The biggest part of the gaming package is online poker and casinos.

Online casinos and poker won’t happen right away, however. The PA Gaming Control Board must still promulgate regulations and hand out licenses to conduct iGaming. (The bill puts an initial 90-day window for applying for licenses, followed by another 120-day window.)

By the time everything happens that needs to for a rollout of online casinos and poker, the second half of 2018 seems like a likely target date for launch in the state.

Revenue for PA from gaming

The House and Senate were counting on more than $200 million in revenue for the current fiscal year from gaming. The vast majority of that is likely to come from licenses for online gambling and poker.

The state will likely hand out a number of $10 million licenses that allow operators to delve into online slot machines, table games and poker all at once.

If licenses remain unclaimed after the initial rollout, PA will license operators piecemeal on those three segments at a pricetag of $4 million each.

Online slot machine revenue in the state will be taxed at a rate of 54 percent. Online table games and poker will be taxed at a 16-percent rate.

More on the possible outcomes of licensing and the tax rates here.

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Breaking a legislative logjam for online gambling

The three states mentioned above had legalized online poker and/or casinos by 2013. Between than and now, there had been no shortage of states at least looking at the prospect of one or both.

But none — most notably California and New York — had reached the finish line, till now. PA’s enactment of an online gambling bill had been five years in the making. And it ends what had been years of frustration from online gambling proponents on the legislative front around the country.

Certainly PA’s move into the iGaming sector could be a wake-up call for other states that have contemplated online gambling (and sports betting).

More than just PA online casinos

The bill also legalizes DFS formally, although nearly all operators — including DraftKings and FanDuel — already served the state. It’s the 17th state to pass a DFS law, and the second top-10 state in terms of population to take that step (joining New York).

The provisions for single-game sports wagering puts PA in a category with New Jersey and Nevada with final laws on the books. To offer sports betting, the state would still need a change in the federal climate.

That could come via the NJ sports betting case that’s in front of the US Supreme Court, where oral arguments take place in December. Such a change could also come via Congress.

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There are also a number of other provisions in the bill, including but not limited to:

• Satellite casinos around the state
• Video gaming terminals at truck stops
• Tablet gaming at airports
• Online lottery

More resources on new types of PA gaming

Correction: The story incorrectly stated how long it takes for the law to take effect. The law takes effect immediately.

Pennsylvania has joined the ranks of US states such as Nevada, New Jersey, and Delaware, passing their own online gambling bill. The bill has been in the works for some time now. About a week ago, it finally overcame all the administrative hurdles. On October 30th, Governor Tom Wolf signed the bill, making it into law.

New Revenue Stream

For Pennsylvania, the gambling bill was of extreme importance. Last year, state officials were counting with $200 million revenue if the bill was passed. Now that online gambling is finally a reality, this will be a huge boost for the state’s budget.

The bill, dubbed H 271, passed the House on October 26th. The next day, the Senate gave its go-ahead as well. The governor’s signature was the only remaining piece of the puzzle. This was a formality, however, as it was clear Pennsylvania is finally ready to have regulated online gambling.

Wolf gave his approval a week later, and now the stage is set and the works are underway.

Bill Provisions

The bill, which is now law, regulates several aspects of online gaming. Apart from online casinos, there is also online poker and daily fantasy sports. The bill also contains provisions for sports betting. This part will kick in if and when the sports betting ban is lifted. This depends on the outcome of the case brought before the Supreme Court by the state of New Jersey.

During the first three months, currently existing 12 casinos in the state will be able to obtain required licenses. There are three types of licenses, each costing $4 million. However, state casinos can apply for a package-deal to get all three for the price of $10,000,000. These licenses cover:

• Online poker
• Slots
• Table games

Who Regulates Pa Online Casinos Gambling

After this initial period, the licensing process will open to out-of-state casinos. If there are still licenses left, these casinos will be able to apply at the price of $4 million per license.

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Taxation Rates

One thing that worries operator in the new law is the matter of taxation. Lawmakers decided to use the layered system, with different activities being taxed at different rates:

• Online slots: 54% tax
• Table games & online poker: 16%
• Sports betting (if applicable) 36%

While rates for table games and poker are quite reasonable, operators are unhappy with provisions pertaining to slots. At 54%, this is by far the highest taxation rate anywhere. Many believe this isn’t sustainable and could deter casinos from applying for slot licenses.

If we take an average taxation rate on all online gambling in PA it comes out at 39%. This is more than double compared to New Jersey, for example, where all online gambling is taxed at 17.5%. Furthermore, licenses are much more expensive than in the Garden State where operators pay $400,000.

When all numbers are taken into account, it seems almost impossible for the operators to turn profit. High taxation rates and expensive licenses might prove deadly for the industry and kill it before it even starts to grow.

Time will tell, but it seems lawmakers were just a bit too greedy here. Of course, if things don’t pan out, it is possible these stipulations will be revised at a later date to create more favorable market conditions.

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