There was a big moment for proponents of legal and regulated online gambling in Pennsylvania this week.

The state Senate, for the first time ever, passed a bill that would authorize PA online casinos and online poker rooms.

Will both chambers of the legislature act on PA online gambling this year? It’s increasingly looking like that will happen in 2017. But there are still obstacles.

First things first: Senate passes PA online gambling

Things happened quickly in the PA Senate this week.

First, a shell bill was loaded up with a massive gaming expansion that we knew would be coming for months. We just didn’t know what the contents of the bill would be, and if online gambling would be included.

We got the answer to both questions on Tuesday, as online gambling was accompanied by a number of other provisions, including:

  • Tablet gaming in airports.
  • A fix to an unconstitutional tax that benefits casino host jurisdictions.
  • Regulation of daily fantasy sports.
  • Authorization of an online lottery.

The amended bill quickly passed through a pair of committee votes by wide margins before heading to the floor of the full Senate. After a short debate on Wednesday, the Senate overwhelmingly approved the bill, 38-12.

The bill now heads to the House. The approval of the package to increase gaming revenue comes as slot machine revenue has been on the decline for most of the past year.

Why the Senate vote is such a big deal

The fact that the Senate has never approved a bill containing online gambling makes this an important step for PA.

Wednesday’s vote came after the House twice passed bills with online gambling in 2016. But the Senate would not even vote on bills with iGaming in it last year.

That means the Senate is finally on board with online gambling in some form. And we know the House likely is too.

The only stumbling block is what the final bill will look like.

The PA online gambling bill has problems, however

The Senate bill contains what appears to be high taxes and fees for online gambling:

  • Online slot machine and table game revenue: 54 percent tax rate
  • Online poker: 16 percent tax rate
  • Licenses for operating either online poker or online casino cost $5 million a piece, or $10 million total for both.

That tax rate for online casinos is the same as the rate for land-based slots. But online gambling is a different animal entirely, and many casinos may balk at the taxes, claiming it won’t be possible to turn a profit.

We’ve learned from Online Poker Report that the House plans on trying to lower the tax; however, support in the Senate might erode if the tax rate is decreased too much.

The bottom line, however, is this: Pennsylvania has made more progress on online gambling than it ever has before. And that means Pennsylvanians might be playing at online casinos and poker rooms by this time next year.