914483_54526013Following the lead of Delaware, New Jersey, Nevada, Illinois, New York, California, Massachusetts and several other states, today the Pennsylvania legislature introduced House Bill 1235, which would effectively legalize online gambling within the Commonwealth’s borders.  The online gambling bill has already been assigned to a legislative committee, which will soon determine if the bill will be heard and voted on by the Pennsylvania House of Representatives.

Pennsylvania Bill Not Limited to Online Poker

Spearheaded by Pennsylvania State Representative Tina Davis, the online gambling bill, like the law in New Jersey, will not be limited to Internet poker and defines “Internet Game” as “[a] table game, slot machine or any other game approved by regulation of the Pennsylvania Gaming Control Board to be suitable for use for Internet gaming activities . . . .”  Representative Davis made clear that her motivation for drafting the bill with such an expansive stance on Internet gaming stemmed from the need to contend with the online gaming regimes of Pennsylvania’s bordering states, Delaware and New Jersey.  While Pennsylvania has a highly successful brick-and-mortar casino industry, second only to Nevada, it has recognized the need to evolve and enter the online gaming arena.

Concessions to Make the Online Gambling Bill More Enticing to Licensees?  

As reported by many gaming industry sources, Representative Davis made several last minute revisions to the bill, most notably lowering the licensing fee from $16.7 million to $5 million and reducing the taxable rate on returns from 43% to 28%.  It is unclear why these changes were implemented, but the revisions bring the licensing fee scheme more in line and competitive with New Jersey and Delaware.  Moreover, while the bill speaks to regulating intrastate gambling, Pennsylvania would not be limited from considering interstate compacts with other states, such as Nevada, in the future.

Benefits for the State of Pennsylvania

In addition to the obvious benefits associated with tax revenue and licensing fees to be received by the State (which could amount to over $100 million), Representative Davis expects that online gaming would create thousands of new jobs for Pennsylvanians and allow the State to keep players and the associated proceeds from leaking into New Jersey and Delaware.

The development of Pennsylvania’s online gaming regime is a significant topic for all gaming attorneys and those interested in Internet poker and gambling in general.

If you are interested in learning more about this topic or pursuing a venture in this area, please e-mail us at info@kleinmoynihan.com, or call us at (212) 246-0900.

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