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Encouraging Signs in Pennsylvania and New York as iGaming Legislation Pushes Forward

With local legislatures around the country getting to work on their 2017 agendas, news out of Pennsylvania and New York suggests that the list of states where online gambling is legal will soon grow.

Currently, only Nevada, New Jersey, and Delaware regulate the iGaming industry, having established legalized online gambling in 2013. But despite several states floating similar legislation in the interim, progress has consistently stalled.

That trend may end this year though, as lawmakers in Pennsylvania and New York push forward with iGaming legislation that was nearly passed in 2016.

In the Keystone State, two attempts at comprehensive iGaming legislation – including online poker, casino games, and daily fantasy sports (DFS) – were approved by the Pennsylvania House of Representatives late last year, only to be ignored by the state’s Senate.

Further complicating matters, the state was faced with an ongoing budget crisis, one which was expected to be partially mitigated by a $100 million infusion of tax revenue and licensing fees generated by the bill’s expected passage.

Representative George Dunbar renewed the effort on February 8 by introducing House Bill 392.

The 209-page omnibus package would essentially replicate the iGaming components of last year, with online gambling revenue taxed at a rate of 14%, and interactive gaming licenses awarded to Pennsylvania’s casinos and racetracks requiring an $8 million flat fee for the five-year approval. Further upping the ante, the online gaming enterprises partnering with licensees would pay $2 million.

HB-392 was originally referred to the House Gaming Oversight Committee, but that hearing was cancelled in favor of a joint hearing by the House and Senate. This is widely considered as a move to streamline the process, following Governor Tom Wolf’s explicit mention of $250 million from gambling expansion efforts within his 2017-18 budget outline during his annual address to legislators.

State Senator Jay Costa has also been making the media rounds of late, expressing his full support for iGaming legislation and offering a general outline of his soon to be introduced bill.

New York is another state where iGaming legislation nearly crossed the finish line last year, and lawmakers are picking up right where they left off.

State Senator John Bonacic introduced Senate Bill 3898 in late January, which would legalize online poker only, and it was quickly referred to the Racing, Gaming and Wagering Committee.

As a carbon copy of last year’s iGaming package, which was overwhelmingly approved in the Senate by a 53-5 vote, SB-3898 had little trouble sustaining the same level of support, as the 11-member Committee voted unanimously on February 14 to move S-3898 forward.

Under the bill’s provisions, up to 11 online poker operators would be granted 10-year licenses at a cost of $10 million, while gaming revenue would be taxed at 15%.

In a statement made to industry outlet Gambling Compliance, State Senator Bonacic pointed to the limited focus on online poker as benefiting the bill’s chances of final passage:

“Last year, there was too much gaming for the Assembly to consider with fantasy sports and the efforts in New Jersey for a referendum to put a casino in the Meadowlands, and I really think that it got put on the back burner. So now we are putting it in the front burner.”

S-3898 will be reviewed by the Senate Finance Committee next, before facing a possible vote by the full Senate.

Meanwhile, Assemblyman Gary Pretlow introduced Assembly Bill 5250 to coincide with the Senate’s process, signaling that last year’s divide between the two legislative bodies has been addressed.

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