THE FIGHT: Pennsylvania and Massachusetts Get in the Ring

Tina Davis

PA Rep. Tina Davis (D-Bucks)

After a few weeks of relative quiet, THE FIGHT kicked back into gear this week, with the East Coast of the country taking center stage.

Rep. Tina Davis (D-Bucks) of the Pennsylvania House of Representatives finally introduced her long-awaited internet gambling bill yesterday. Although the full text of the bill is not yet available online, Chris Krafcik of Gambling Compliance reported yesterday that the bill would require a license fee of $5 million and would tax online gambling operators at 28% of their gross gaming revenue.

Those numbers may seem high, but they are part and parcel with Pennsylvania’s general regulatory approach to brick-and-mortar gambling – and they are significantly lower than where they started out in early drafts of the bill. Despite that movement, it’s not at all clear what kind of chance of passage this bill has in the House. We’ll get a lot more clarity on both the bill’s contents and its prospects next week.

There was finally some movement in Massachusetts as well, although online poker players will have mixed reactions to it. An amendment authorizing online poker was tacked onto the latest Massachusetts budget proposal by the House Minority Leader, Bradley Jones (R-Middlesex). That’s the good news. The bad news is that bill only authorizes up to three licenses and it restricts those licenses to companies that never have accepted wagers in the U.S. after October 13, 2006 (a so-called “bad actor” restriction), the date that former President Bush signed the UIGEA into law.

Look for that bad-actor cut-off date to change. Several brick-and-mortar casino interests are partnered with a number of sites that left the U.S. after passage of the UIGEA, but most of those sites did not leave overnight. In order to qualify for licenses, the casino groups will need to push that date back a few months, most likely to December 31, 2006, as was done in Nevada.

The Massachusetts bill calls for a hefty licensing fee of $10 million, with monthly upkeep thereafter. That cost is offset somewhat by the 10-year validity of the license.

There are some good things to take-away from this effort, even despite the negatives. The bill is being sponsored by a prominent Republican, which gives it greater initial visibility and momentum towards passage. The bill is also tacked onto a budget bill as a revenue-generating measure, a legislative approach that should ease its journey towards passage and implementation.

On the regulatory front, Rational Group finally completed its application to New Jersey regulators for permission to purchase the Atlantic Club casino in Atlantic City. The Division of Gaming Enforcement will have until July 9 to review the application and make a preliminary recommendation. The Casino Control Commission will then convene public hearing and make a final decision on the application no later than August 8.

The AGA and big-money casino interests like Caesars are expected to continue to throw the kitchen sink at Rational Group to prevent the company from acquiring a casino. Despite that effort, the political situation in New Jersey and the economic situation in Atlantic City likely will work in Rational Group’s favor in securing a license.

In a week with so much depressing world news, it was nice to see lawmakers taking up THE FIGHT on behalf of poker players, even if there’s still plenty of work to be done.

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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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