Online Gaming Bill Introduced in Pennsylvania

Tina Davis

PA Rep. Tina Davis (D-Bucks)

A Pennsylvania legislator introduced an online gambling bill in the Pennsylvania House of Representatives on Friday, putting the Keystone State squarely on the map of states fighting to legalize online gambling.

The bill, HB 1235, is being sponsored by Rep. Tina Davis (D-Bucks). Nearly a dozen legislators have signed on as co-sponsors.

Under Davis’ bill, online gaming in Pennsylvania would effectively be restricted to brick-and-mortar gaming licensees, on the operator side, and residents of Pennsylvania that are older than 21, on the player side. The two would have to cross paths in the real world at least once, as players would be required to set up their online gaming accounts in person at a casino.

Any game currently approved by the state Gaming Control Board would be ripe for online play, including poker. Licensees would get hit with a substantial up-front fee of $5 million, but thereafter would only have to pay a $500,000 renewal fee every three years. In keeping with its aggressive brick-and-mortar tax regime, Pennsylvania would collect 28% of the gross gaming revenue attributable to online play.

Interstate compacts and bad actor clauses have become hotly contested issues for the online gaming industry. Although Davis previously intimated that her bill would not allow for interstate compacts, the version introduced Friday does provide a mechanism for entering into such player-sharing arrangements. It does not, however, include any “bad actor” language, a boon to online operators who took bets in the U.S. after 2006 and who wish to partner with Pennsylvania brick-and-mortar casinos.

Davis has not appeared well-educated on the issues surrounding online gaming, making it difficult to forecast the chances of success for HB1235. The bill has been referred to the Gaming Oversight committee in the House, a 25-member committee on which Davis serves. She is likely to be opposed by fellow committee member Paul Clymer, who in late February said he would introduce a bill seeking to ban online gambling in Pennsylvania.

Online gambling has become the latest front line in the East Coast war for gambling market share. New Jersey, historically the leader in brick-and-mortar gaming, has seen its revenues eroded by casinos in Maryland, Delaware and Pennsylvania in recent years. New Jersey and Delaware have both already enacted online gaming measures.

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Kevin McGrady

Legislative and Politics Beat Writer: Kevin McGrady practiced corporate law in New York City for eight years before moving to Las Vegas in 2008 to join the gaming industry. Kevin is a graduate of New York University and Columbia University School of Law.
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