A second Philadelphia casino has become yet another issue surrounding casino expansion currently complicating things for Pennsylvania lawmakers.

The Pennsylvania Legislature has approved spending levels on a $32 billion budget. However, discussions regarding how the state will pay for it, including online gambling legislation, have stalled.

A comprehensive PA gambling expansion bill

At the crux of the issue is a comprehensive gambling expansion bill that would legalize, regulate and tax:

  • PA online casinos
  • PA online poker rooms
  • daily fantasy sports
  • video gaming terminals at liquor licensed establishments; and
  • tablet gaming a airports locations.

Proposed tax rates for online casinos and video gaming terminals have proved the biggest sticking points.

The PA Senate originally passed legislation including a 54 percent proposed tax rate on online casino games and 16 percent on online poker. Pennsylvania’s 12 land-based casinos currently pay a 54 percent tax on slot machine revenue and 16 percent on table games.

However, the PA House amended the bill to include a 16 percent tax rate across the board. Plus, the House added the plan to authorize video gaming terminals at licensed establishments.

A decision was expected this week. But while insiders report the tax rate issue is close to being resolved, no agreement on video gaming terminals has been reached.

A proposed second Philadelphia casino

In the meantime, a bill aimed at clearing a path for a second casino in Philadelphia, and a 13th inside state borders, could be complicating things even further.

A proposal to build Stadium Casino’s Live! Hotel and Casino was approved by state regulators in November 2014. Once it opened near the sports arenas in South Philadelphia, just off I-95, the property would have been the Philadelphia area’s second casino. SugarHouse Casino in the Fishtown neighborhood is the only Philadelphia casino currently in operation.

However, SugarHouse and others opposed the project, claiming investor Bob Manoukian’s interest in it was in contravention of the state’s one and one-third rule. The rule states a majority owner in one casino can’t own more than one-third of another. Manoukian currently owns approximately 85 percent of Parx Casino in Bensalem.

Further complications

The Pennsylvania Supreme Court had asked the Pennsylvania Gaming Control Board to sort out the ownership issue. But in the meantime, Rep. Scott Petri, the Republican chairman of the House Gaming Oversight Committee, introduced a bill that would repeal the one and one-third rule.

In fact, last week Petri told the Philadelphia Inquirer newspaper his bill may be included as a measure in the comprehensive gambling expansion bill currently being considered by lawmakers, further complicating the entire issue.

In fact, adding another contentious issue may help push consideration of the entire gambling expansion package to the fall.