Pennsylvania State Senator Edwin Erickson recently announced that he intends to introduce a new online poker bill. Edwin referenced a study that was released last month that showed the state could generate nearly $26 million in annual tax revenue from regulating online poker. The report also showed that Pennsylvania could generate nearly $70 million in taxes from regulating online casino games as well, but Edwin feels online gambling should be limited to poker.
Edwin said that the revenue from online poker would offset a reduction in property taxes. This could help rejuvenate the state’s housing market, which will ultimately grow the rest of the economy.
Online gambling providers would need to pay a one-time licensing fee of $5 million to be eligible to operate in Pennsylvania. Edwin’s bill would also require them to pay a 14% tax on all online gambling revenue generated. Any companies that violated the Unlawful Internet Gambling Enforcement Act of 2006 would be barred from operating in the Keystone State.
Gaming providers would probably need a physical presence in Pennsylvania to be eligible for an online gambling license. The state’s land-based casinos are among the most successful in the country, but the government is highly dependent on them for tax revenue. The industry brought nearly $1.5 billion for the state in 2011. Edwin and other lawmakers want to help stimulate the industry to boost revenue for their social programs.
Some experts are concerned that legalizing online gambling would damage the state’s land-based casinos. However, the recent report showed that regulation would most likely have a positive effect on the state’s casino industry. The authors estimated that the net impact on land-based gaming revenues would vary between a loss of $15 million and a gain of $92 million. Data from New Jersey casinos shows that online gambling appears to have boosted foot traffic at the state’s casinos, which is encouraging for Edwin’s bill.