Online Gambling Bill Introduced in Pennsylvania

on March 3, 2015
Pennsylvania State Representative John Payne

Pennsylvania State Representative John Payne believes that online gambling could bring much needed revenue to his state (Image: yogonet.com)

Online gambling could be a windfall for Pennsylvania, and at least one legislator in the state thinks that it is time to start collecting that money now before it flows into other states in the region.

That was part of the reasoning given by State Representative John Payne (R-Dauphin) for the introduction of a bill to regulate online gambling in the state, something that he says could bring in much needed revenue for the state government without burdening citizens.

“We are currently facing a projected $2 billion budget shortfall,” Payne said in a statement. “I think it’s important we consider all responsible options to boost revenue before we consider asking our taxpayers for more money to fill that deficit.”

Bill Allows Variety of Games, Not Just Poker

Originally believed to be a “poker-only” bill, the language in the legislation, known as HB 649, was clarified days after it was originally introduced to make it clear that “any interactive game approved by the board” could be allowed in Pennsylvania under the law. In addition, there is no bad actor clause present in the legislation, meaning that companies like PokerStars would be judged on their merits by regulators rather than being excluded by law.

The bill specifies that online gambling sites would be run by current gaming license holders in the state, each of which would have to pay a $5 million fee to become eligible to operate Internet gambling sites. Software providers and other “significant vendors” would also have to pay a $1 million fee before entering the market. All players must be over age 21 and be located within state borders while playing, and there is language that would allow for interstate compacts with other jurisdictions that have regulated online gambling.

As for generating revenue, the bill says the state would take 14 percent of gross revenues from the sites. Payne cited a study that says this could earn Pennsylvania $120 million over the course of the first year that the websites are in operation, though this may seem highly optimistic given that New Jersey collected only about that amount in total gross revenues over its first year of Internet gaming.

Payne Says Regulation Better Than Status Quo

Still, even if the revenues can’t immediately meet the lofty goals Payne has laid out, there are other reasons to regulate online gambling as well. As many advocates for regulation have pointed out, people in Pennsylvania and other states will play online casino games whether they are regulated or not, so it makes sense to provide oversight rather than force Americans onto unregulated sites.

“Right now millions of Americans, including Pennsylvanians, participate in illegal online gaming where no regulation currently exists,” Payne said. “By enacting effective state policy, we can help curb the illegal market while ensuring strong safeguards are in place to protect consumers.”

Payne also pointed to the fact that three states (Nevada, New Jersey and Delaware) had already shown that it was possible to effectively regulate Internet gambling. Payne’s bill includes some specific consumer safeguards, including limits on how much players can deposit or lose and measures to provide help for problem gamblers.

But perhaps most importantly of all, Payne says, he doesn’t want to see Pennsylvania be left behind.

“We looked at the fact that Jersey has it, Delaware has it, Las Vegas has it,” he said. “It would be a mistake for Pennsylvania to sit here and wait until Ohio has it, Maryland has it, New York has it, and we’re the last ones coming to the game.”