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US – Pennsylvania’s House of Representatives pass online bill

By - 28 October 2016

The Pennsylvania House of Representatives has passed HB1887, a bill which would regulate online gaming and daily fantasy sports in the state, by a vote of 110-71.

The bill, which would also allow online gambling via tablets in the Philadelphia Airport, and further changes to local share tax, will now be put before the senate when it returns in mid-November.
Republican Bill Adolph said that with so many city budgets dependent on revenue generated by local casinos as a result of the local share tax, approving online gaming, which could generate an extra $100m in tax revenue, was now essential for the state.

“The policemen, the firemen, public works, all these budgets, if we do not pass a local fix, will be in deep trouble,” he said.

Nine of the 12 casinos in the state recently signed a letter asking for online gaming although two of those who didn’t sign the letter, Philadelphia’s Parx Casino and Sands Bethlehem, are the biggest venues in the state. Sands’ boss Sheldon Adelson has been vociferous in his dislike of online gaming. Mount Airy was the other casino not to sign the letter.

In the letter, the nine casinos said: “We understand that some have suggested that some or all of the undersigned would rather pay a tax than have internet gaming to pay for additional local share. We want to make it abundantly clear that while we all may have differing views on internet gaming, we would all much rather accept internet gaming in lieu of any additional tax. Internet-gaming would provide a new source of funds to assist surrounding communities and it protects consumers from the existing illegal market.”

On the issue of the local tax share fix, the letter said: “Beyond the restoration of the local share assessments, we understand that other communities that do not host casino licensees are desirous of receiving local share payments and that a figure of between $2.5m and $5m has been discussed. We further understand that you are considering additional taxes/assessments against the casino industry to pay for this in lieu of pursuing a revenue enhancing activity that could be used as a “pay for”. We want to make it abundantly clear that such additional taxes/assessments are entirely unfair and would have devastating impacts on our businesses, our employee base (which would need to be reduced to deal with the additional cost), and our communities. Indeed, a tax like this several years back in Illinois led to layoffs, less capital investment, less tax revenues and less activity in communities. We urge you to reject any new tax which would be the third new tax on the industry since this summer (e.g. two per cent increase in table tax and the new assessment).”

The letter also covered the removal of admission fees at Category III casinos for a one-time payment to the state.

“We do not object to the removal of the Admission fee for Cat III licenses,” the casinos stated.

Penn National Gaming, who operates Hollywood Casino at Penn National Race Course in the state, said last week that lawmakers should ban out-of-state online operators from offering ‘branded skins’ via deals with local casinos.

There is no guarantee the bill will be passed by the senate. Indeed Senate Republican’s general counsel, Drew Crompton, hinted that the bill could be put on hold until next year.

“We did what we did on gaming and I think that’s all we plan on doing for the rest of the year,” he said, adding: “We hope that come next year we’ll have some renewed energy in order to find the $100m that we still know is pledged for the ’16/17 year.”

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