While progress on online poker legislation has seemingly stalled in California, Pennsylvaniahas been making strides toward regulating the industry. On Wednesday, the Community, Economic, and Recreational Development Committee conducted a hearing in front of the Pennsylvania Senate on several aspects of the Commonwealth’s gambling industry, including online and brick-and-mortar policy. Sourced for this report is a hearing summary published by USPoker.com.
In attendance were representatives from 11 of the state’s land-based casinos, who gave testimony on issues ranging from the expansion of tavern gaming and video game terminals to the legalization of internet gambling.
Specifically discussed was online gambling bill SB 900, recently introduced by Senator Kim Ward and sponsored by Senator Elder Vogel, Senator Robert Tomlinson, and Senator Joseph Scarnati. The bill would entitle casinos that hold both table game and slot machine licenses to open up their own online gambling site for a fee of $10 million, valid for five years.
The bill does not contain bad actor language, which would preclude sites like PokerStars from being licensed, but includes a few provisions that had already become points of contention at the hearing.
While other Pennsylvania iGaming bills would levy a tax as low as 14%, SB 900 calls for a 54% cut on gross gaming revenue.
In the hearing, Eric Schippers of Penn National voiced his support of iGaming, saying that the industry would be “a vital tool” for casinos and “would not cannibalize brick-and-mortar gambling.” “[The] opposite is true,” he added.
He also made several mentions of SB 900’s lofty tax rate and called for the 14% tariff and $5 million licensing fee sought in Representative John Payne‘s iGaming legislation. In fact, Schipper testified that such a high tax rate and licensing fee would cause his company to lose $20 million. Read about Payne’s legislation.
Another hotly debated provision was the legislation’s insistence that online gamblers register their accounts in person at the site’s land-based casino partner. The language is thought to be driven by Bob Greene of Parx, who expressed his lukewarm support for iGaming at the hearing.
The same in-person registration can be seen in California Assemblyman Mike Gatto‘s online gambling proposal AB 9. The Poker Players Alliance was quick to criticize that provision, stating that the requirement was onerous and would “defeat the purpose” of offering online gambling first place.
Melissa Richards of Harrah’s and Shawn Sullivan of Meadows Casino were also on hand and both voiced support for iGaming. The industry would “allow the gaming board to open new sources of revenue that will not be cannibalistic,” Richards testified.
Sugarhouse Casino‘s Wendy Hamilton argued that after two years of declining revenue, Pennsylvania’s brick-and-mortar gambling industry has peaked. She called for regulating iGaming in order to bolster the Commonwealth’s casinos and retain gamblers who have increasingly been attracted to casinos in bordering states.
Valley Forge is in favor of online gambling and seeks to remove membership fees on Category 3 licensees and add more table games and machines to its casino.
Mark Juliano, a representative from the Sheldon Adelson-owned Sands Bethlehem, was on hand and expressed his complete opposition to iGaming. He believes that the introduction of internet gambling would be detrimental to the state’s brick-and-mortar casinos, although study after study has shown the opposite to be true.
Juliano’s statements don’t take into account testimony cited by Parx’s Greene, which highlighted that 85% of Borgata’s online poker players are new or inactive players. That backs up iGaming proponents’ belief that legalizing the industry would revitalize brick-and-mortar casinos by bringing in new players, not cannibalizing them.
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