Pennsylvania is wasting no time getting its online gambling and daily fantasy sports ducks in a row but operators won’t be wild about the proposed tax rates.
On Monday, Pennsylvania State Sen. Jay Costa (pictured) filed a memo detailing his plans to introduce sweeping gaming industry legislation “in the near future.” Costa says his legislation will be based on HB 1887, the House bill that died in December after the Senate failed to bring it up for a vote before the legislative session concluded.
Costa’s bill will charge casinos a $10m license fee for taking their action online, while online technology vendors will pay $5m. The fees will go into the state’s General Fund. Previous bills set license fees at $8m for casinos and $2m for vendors.
Costa wants all categories of casinos to be eligible to offer “all casino games (i.e. slots and table games)” over the internet, but casinos would be prohibited from offering online gaming on casino property “to deter tax avoidance by casinos.”
Speaking of taxes, Costa plans to impose a hefty 25% rate on internet gaming revenue, three-fifths of which will go toward the state Property Tax Relief Fund, while the rest will go to the Commonwealth Financing Authority for economic development projects.
The 25% tax rate is significantly higher than the 16% proposed by last year’s House bill, although it’s significantly less than the 54% rate proposed by Sen. Kim Ward in 2015, so, you know, progress.
Costa’s legislation will also preserve last year’s ‘tablet gaming at airports’ proposal, albeit only at the Philadelphia and Pittsburgh airports and it will be subject to a five-year pilot (no pun intended, we’re sure) program. Airport mobile operators will face license fees of $2.5m and the same 25% tax rate. DFS operators will also face $2.5m initial fees and 25% taxes on revenue.
Ensuring that no operator feels left out, the Pennsylvania Lottery will be allowed to take its action online, based on Costa’s belief that “fiscal challenges have placed increased strain on the State Lottery Fund.” Costa says the Lottery needs to be provided with “the tools it needs to adjust and remain solvent” to ensure that senior citizens don’t have to be made into Soylent Green or something.
Costa’s bill will also tackle the slot machine gaming local share provision that was struck down by state courts as unconstitutional last year. Costa’s plan would ensure that host communities receive the same dollar total they received prior to the court ruling.
Late in December, Sen. Ward announced that she was summoning representatives of the state’s dozen casino operators to a meeting at her office on Tuesday to discuss the state’s gaming legislation agenda for the coming year. Coupled with Costa’s bill, it appears the state’s gaming expansion proponents are determined not to let the grass grow under their feet.
