Online Gaming News in Pennsylvania

The past three weeks have been similar to  Fast and Furious 7 with all the activity involving online gaming. Pennsylvania has at least two additional bills that are related to internet gambling. One takes on the logistics involving registration and the exclusion of any holders of a Category 3 license. This would deny Valley Forge the opportunity to participate.

 

The new bills are also asking for a tax rate of 54%. This is  the same level that Pa. taxes slot play. This will not work in an online environment. New Jersey is making things work with a rate of 17.5%. That rate has the operators able to market the product and turn a profit. With the rate of 54%, there would not be internet gaming in New Jersey. Delaware taxes online slots at a rate of 43.6 percent and 29.4 percent for other games, including poker. The first $3.75 million per year has a 100 percent tax rate. They are not making any money.

Mark Lipparelli

Mark Lipparelli, Former Chairman of the Nevada Gaming Control Board, told a California House Committee that he felt the proper tax rate would be the high single digits and that any amount higher than the low teens would hurt the growth of regulated online gaming. Promotions are the drivers of internet wagering. They are limited when the profit margin is minimal. A rate of 12 to 15% is suitable. It could start at the low end and increase over a 4 year span.

 

I am sure that the compromise phase will come when the bills reach the floors of the House and Senate. Here are my three bullets of what can make this happen successfully and by 2016.

• Remove the registration at the property stipulation. That takes the convenience factor out of it. This also limits the operator to a locals only atmosphere.
• Set up the capacity for compacting agreements with any state that has online gaming. This would increase liquidity in Poker and Slots when tournaments are held. It would also drive more revenue to the participating states.
• Limit the amount of providers to casinos that are currently operating  in this state. They are stakeholders and would maintain the integrity of the online product. Allow at least one partner that is independent of the casino to buy into the platform of shared revenue, provided that partner can pass a review by the Pennsylvania Gaming Control Board. This would increase marketing efforts. 

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