Mixed Views about Legalizing Online Gambling in Pennsylvania

Operators and state regulators discussed the possibility of legalizing online gambling in Pennsylvania

One of the hottest topics in a hearing held on June 3, 2014 in Pennsylvania was the topic about legalizing online gambling in the US state. Representatives from the gaming industry and state regulators had the opportunity to present their views.

“Representatives from the House and the Senate have expressed their positive views about having legalized online gambling market and they are planning on introducing a bill that would legalize online gambling in Pennsylvania in the upcoming weeks.”

Econsult Solutions presented the projections about Pennsylvania’s revenues which showed tax revenue of $68 million for the state in the first year and $110 million in tax revenue in the following years. The licensing fees proposed at $5 million per applicant were not included in the projections. They assumed a take rate of 60% on casino games and 20% on poker.

The Chairman of The Pennsylvania Gaming Control Board William Ryan warned that the state should be realistic about the revenue expectations from legalizing online gambling and took New Jersey as an example. The third US state that has recently legalized gambling on the Internet could not generate the big tax revenue numbers that it had projected. He also added that it would take a year before Pennsylvania would be ready to implement iGaming.

Industry Operators Have Different Opinions

Most online gambling operators said that they want to be the only licensees for online gaming and added that if tax rates are too high it might have negative effects to the success of online gambling in the state.

However, the manager at Sugar House Casino Wendy Hamilton said that with online gambling, things should be “proceed with caution” and suggested to wait a year and observe the states that have already legalized online gambling. She also believes that iGaming would cannibalize her land-based casino business.

Senior Vice President at Caesars Acquisition Company Michael Cohen denied this claim and pointed out that 91% of the online players at Caesars in New Jersey are new players. He also added that online gambling in Pennsylvania should be pushed forward and then a long implementation period should be enacted in order to allow law makers to get to a certain level of comfort with the technology.

What the Opposition Thinks

On the other hand, Andrew Abboud, a representative from Las Vegas Sands Corp., was against online gambling as expected and he pointed out that iGaming products would cannibalize land-based products.

The ability of implement technology that would determine a player’s true identity was also questioned by the state legislators. A talking point for the majority of opponents was the topic about preventing under-aged from accessing an adult’s account.

All in all, both operators and regulators show interest on the online gambling issue, but a real line is not drawn between them. Moreover, it appears that there are proponents and opponents in both the legislature and industry which doesn’t seem good for those that hope to see online gambling legalized in Pennsylvania in the near future.