The bill came to the House from the Pennsylvania Senate. This means it must go back to the Senate for final approval before heading on to Gov. Tom Wolf’s desk.
Granted, there is some skepticism as to whether H 271 will ever actually reach the governor. The House made several changes to the Senate’s bill. Those changes could end up being a sticking point.
The basics of H 271
Like most gambling bills, H 271 boils down to what it allows and what it charges in taxes and fees.
Which forms of PA online gambling are allowed?
The biggest wins included in H 271 are the provisions for the legalization and regulation of PA online gambling and daily fantasy sports. We thought these expansions might happen in 2016. But the legislation became mired in a sloth-like review process that never culminated in a successful bill.
In addition to these two major advancements, the bill would allow tablet gaming in certain airports. It would resolve local tax issues, and would do away with an unpopular one-time amenity fee.
All of these are seen as positives for the casino industry and for residents who want DFS and online gambling.
However, there is controversy over the fees and tax rates set forth by H 271.
Taxes and fees: The possible deal-breaker
The bill proposes that all Pennsylvania online gambling operations be charged a flat 15 percent tax rate. It also calls for an $8 million licensing fee.
These two figures differ from what the Senate sent to the House: 54 percent for online slots and table games and 16 percent for poker.
The House’s proposed tax rate is a refreshing counter-attack against the Senate’s outsized figure. If nothing else, it softens Pennsylvania’s long-standing tradition as the state with the highest gambling taxes in the nation.
According to Lancaster Online, backers of the bill say the tax revenue, although considerably lower than what the Senate initially proposed, still presents tremendous value to the state’s economy:
“Supporters said tax revenue from new gambling would benefit bar owners, local governments, veterans organizations and volunteer fire companies, while tapping into activities — online gambling and video gambling in bars — that are already going on, albeit illegally.”
Opponents of the bill say it will only serve to augment problem gambling. And according to one SUNY Rockefeller Institute of Government study, the tax revenue won’t be as big of a help as people think.