Lawmakers took another step along the long and arduous road towards legalizing online poker in Pennsylvania this week.
The Pennsylvania House of Representatives passed a bill to fund the state’s $32 billion budget Wednesday night. The bill will have to pass through the State Senate and be signed by Gov. Tom Wolf before it becomes law.
The bill currently includes $225 million in tax revenue expected to be generated from the adoption of legal and regulated online poker and other gambling expansion initiatives.
However, even if that measure remains in the bill, separate online poker and casino legislation would still need to pass.
Painting lawmakers into an online gambling corner
That said, passing this particular bill to fund the budget appears to paint lawmakers into a corner when it comes to online gambling legislation. Legislators will soon be forced to pass the legislation to pay for it if they pass a budget bill including $225 million in tax revenue from online gambling.
In the House, the budget bill passed by a slim margin of 103-91. Considering a spending freeze began Sept. 15, the Senate is expected to act quickly on the bill.
The PA House and Senate approved spending levels on the $32 billion budget at the end of June. However, they could not come to a consensus on how to pay for it.
The state legislature went into recess in July with the issue still outstanding. A comprehensive gambling expansion bill that includes online poker legislation has remained one of the most hotly contested funding issues.
The bill seeks legalize, regulate and tax:
- PA online poker rooms
- PA online casinos
- Daily fantasy sports operators
- Video gaming terminals at liquor licensed establishments
- Tablet gaming at airports
At the outset, debate centered around tax rates for online casinos. However, the proposal to authorize video gaming terminals at liquor licensed establishments around the state has quickly become the most controversial.
Tax rate and VGT issues remain
The Senate passed legislation proposing a 54 percent proposed tax rate on online casino games. It also included a 16 percent proposed tax rate on online poker.
Currently, Pennsylvania’s 12 casinos pay that same 54 percent tax on slot machine revenues. However, the state charges only a 16 percent on table game revenues.
The House amended the bill to include a 16 percent proposed tax rate on online gambling operators across the board. However, it also added a plan to authorize video gaming terminals at liquor licensed establishments.
Before the summer recess, the Senate did not appear to have the votes to pass the video gaming terminal plan.
Whether these issues have been fully resolved remains unclear. However, Pennsylvania lawmakers are forcing themselves into a position where they will be required to come to a consensus as the budget spending bill progresses.