Pennsylvania Senate Shelves iGaming Bill Until 2017

In the latest chapter of Pennsylvania’s tortured path to passing iGaming legislation, the state’s Senate has decided to shelve House Bill 1887 until 2017.

Per a November 1st report published by Lehigh-based newspaper The Morning Call, state senators are not yet prepared to decide on creating a regulated online gaming industry just yet. Republican Senator Jake Corman, who serves as Pennsylvania Senate majority leader, explained the delay as stemming from the House of Representatives’ insistence on including iGaming language in what was ostensibly a land-based casino tax share item:

“We told the House before, we don’t have consensus on I-gaming, yet they chose to load it into the host fee bill. That basically killed it for this session.”

The term “host fee” in this case refers to the two percent daily collection on slot machine revenue generated by Pennsylvania’s 12 brick and mortar casino venues. On a quarterly basis, accumulated funds from slot collections are then distributed to “host” towns where the casinos are physically located – places like Allentown, Bensalem, Bethlehem, and Paradise Township.

Under the system, casinos could opt to pay two percent of annual revenues over $500 million, or a $10 million flat payment. And according to the Pittsburgh Post-Gazette, every casino covered under the law has paid the $10 million per year.

This tax was instituted by the state’s passage of the Gaming Act of 2004, but the Pennsylvania Supreme Court ruled the collection scheme unconstitutional in late September. In the Court’s estimation, the system applied different tax rates on venues based on their size, a clear violation of longstanding uniformity standards.

From there, state lawmakers scrambled to “fix” the law and ensure that municipalities hosting casinos would not suffer drastic budgetary gaps. Their efforts resulted in HB-1887 – which was originally written to strengthen gambling administration reform – being amended to include the necessary tax share fix requested by the state’s Supreme Court.

HB-1887 was also amended by House lawmakers to include legalization of online poker and casino gambling, along with Daily Fantasy Sports. In doing so, members of the House essentially blended components of a previous iGaming bill, HB-2150, as the tax share fix added to HB-1887 created a hybrid version of both proposals.

In late October members of the House passed HB-1887 by a 110-71 margin, sending it on to the Senate while vocally urging their counterparts to take similarly swift action. At the time, House Majority Leader Dave Reed made it clear in a statement that the proverbial ball had been placed squarely in the Senate’s court:

“We made a decision this morning that is in line with what we’ve been saying for over a month: that the House had support for a gaming bill that fixed the local share issue and got us to the budgetary commitment of $100 million.

We hope (the Senate) will concur with that and send it to the governor so we could put both of these issues behind us.”

But rather than accelerate progress on passing HB-1887, the Senate collectively decided to punt on the issue for the duration of 2016, as stated by Senate Republican Chief Counsel Drew Crompton:

“We did what we did on gaming and I think that’s all we plan on doing for the rest of the year.”