A Pennsylvania gambling expansion bill, which contains the authorization and control of online gambling, passed a vote of the whole state Senate by a 38-12 poll on 24th May. The bill passed two Senate Committee votes on 23rd May. HB 271 back in the state House of Representatives, was delivered to the Rules Committee on 7th June. Though, if one chief issue with the bill does not alter, Pennsylvania casinos would not trouble themselves with online betting, poker or otherwise.
Pennsylvania Online Gambling Bill
The bill puts a tax rate of 54% on most kinds of online gambling, containing admired games such as slots and blackjack. Online poker is levied at 16%. The licensing fee would be $5 million for online betting operators and the same charges would be applicable for acquiring online poker licenses. Thus, a casino that would desire to provide all forms of online gambling would have to pay $10 million. According to casino industry examiners, at 54%, the operators will apparently not resort to online gambling.
Comparing Pennsylvania Online Gambling Bill with Liquor Bill
Eric Schippers, representative for the Hollywood Casino compared the Pennsylvania gambling expansion bill with the 24-hours liquor sales bill. The liquor law was passed previous year that presented the casinos with the chance to purchase $1 million licenses for the authority to provide alcohol all day. Casinos were permitted to sell alcohol 20 hours each day, except between 2:00 and 6:00 am. Without the license, the regular hours for alcohol sales were enforced. No casino had applied for the license because there was no sense to be paying the money for supplying few patrons they possessed at the off hours.
State Senator Pat Browne, chairperson of the Appropriations Committee, do not find the comparison of the bill with the liquor bill valid, referring that the brick-and-mortar casino presently pays 54% tax on slot profits and pay $50 for a casino license.
Concerns Within the Online Gambling Bill
Using surrounding New Jersey’s numbers as an observation, it was discovered that 44 cents per dollar of online casino profit is utilized to entice and maintain customers. 30 cents per dollar is utilized for a bundle of operating costs, such as employee salaries and payment processing. Subsequent to all these payments, New Jersey online casinos’ revenue was roughly 5 cents per dollar revenue.
Senator Browne is either being reasonably corrupt or unaware in assuming that online casinos can handle 54% tax rate since physical casinos are able to do so. But the physical casinos possess a large group of profit streams in supplement to gaming, which are dining, hotel, shopping and other sources of entertainment that can benefit the casinos, which is not possible in case of online casinos as they gain nearly nothing except for the gaming revenue.
Senate Counting on Licensing Fee to Cover Expenses of the Commonwealth Budget
The Pennsylvania Senate is relying on the licensing fees to compensate $120 million of the Commonwealth’s 2017-2018 budget. Based on the present situations, the Senate would be unsuccessful to acquire even close to the estimated amount. Sands Casino is evidently not participating and Parx Casino does not approve online gambling.
Hollywood Casino and the two Rush Street properties would not request for licenses, hence, with these five casinos, there is $50 million fee the state would not be receiving at all. The likelihoods are that maximum of other casinos would not prefer to apply for licenses with the irrational fees and taxes, so the commitment of $120 million in addition to tax revenue could be reduced to zero lest few drastic modifications are made.