With four online gaming bills introduced by Pennsylvania legislators in 2015 (and a fifth due shortly), proponents of online poker in the state have cause for a healthy sense of optimism.
But before setting up shop in Pennsylvania, virtual casinos must navigate a few more hurdles.
The Adelson factor
One major stumbling block faced by PokerStars and other platforms hoping to break into the Pennsylvania market is the staunch opposition of Sands chairman Sheldon Adelson.
The resort mogul, who has described himself as “morally opposed” to online gaming, is a prolific contributor to political campaigns and lobbying efforts, and a powerful force in both state and federal policymaking.
With Adelson’s Sands Bethlehem commanding a strong market position among Pennsylvania casinos, the billionaire will continue to play a central role in any talks surrounding proposed legislation. Adelson’s Pennsylvania campaign has already enlisted prominent lobbyist Blanche Lincoln, who last month criticized online gaming in a PennLive op-ed.
“The risk to our families, Pennsylvania jobs and our communities is just not worth the reward,” wrote the former Arkansas senator, adding the venture has been a “proven, consistent fiscal loser” in Delaware, New Jersey, and Nevada.
Speaking before Pennsylvania’s Gaming Oversight Committee in April, Sands executive Andy Abboud reiterated the company’s opposition to the proposed legislation.
“Our investment has had profound effect on Bethlehem,” Abboud said. “None of this investment would have occurred if Pennsylvania had Internet gambling. None of these good jobs would have been created.”
Abboud argued online gaming would undermine the state’s efforts to keep minors from participating.
“There is no way to prevent a player from logging on and handing their iPad to a minor,” he said.
Bridging the tax gap
Also standing between PokerStars and the Pennsylvania marketplace is the question of proposed tax rates. In HB 649, the last bill to be formally introduced, virtual casinos would be taxed at a rate of 15 percent, significantly lower than the rates at which live casinos are taxed.
But some lawmakers fear that such a low figure would cause casinos to divest from brick and mortar establishments, lowering overhead costs to cash in on higher Internet profit margins, in turn costing the state much-needed tax dollars.
In a memorandum last week, Senator Sean Wiley announced plans to draft a new online gaming bill – which would be the fifth such bill of the year for Pennsylvania – which would instead tax virtual casinos at a rate of 36 percent.
Wiley’s bill would be contingent on a proposed study “to determine the impact online gaming would have on existing brick and mortar casinos,” as the memorandum read.
Where exactly does Parx stand on PA online gambling issue?
Further complicating matters for virtual casinos is an amendment recently proposed by Parx, which would require on-site casino registration for online players. Parx Senior Vice President of Gaming Development Don Ryan said the tactic would “strengthen the relationship” between the casino and its clientele.
While the widely-criticized demand is unlikely to find its way into a finalized bill, it reflects the generally tepid approach of Parx and its boss Bob Green toward online gaming in Pennsylvania.
“The first priority must be to protect the bricks and mortar casino industry,” Green told the Pennsylvania gaming board last year. Green has said that New Jersey’s legalization of online gaming caused a decline in Parx poker room receipts.
But Parx has nonetheless prepared for the possibility of online gaming in Pennsylvania, announcing a partnership last year with online platform GameAccount Network.