Earlier this month, it looked like the chances of online poker legalization were dead in Pennsylvania for the rest of this year as state legislators still couldn’t agree on a budget bill, but sometimes life surprises us. On Wednesday night, the Pennsylvania Senate passed HB 271, a bill which would legalize and regulate online gambling, including online poker, by a vote of 31-19. The bill is now in the House, which was unable to vote on it Wednesday night, but will continue debate on the bill Thursday morning.

We would direct you to the bill to give it a look (follow the link above if you would like), but is nearly 1,000 pages when viewed in Microsoft Word, so good luck and see you next week. As mentioned the bill would legalize online gambling. This includes casino table games like blackjack, internet slots, and online poker. It would also permit for daily fantasy sports and even sports betting, the latter if and only if sports betting is legalized nationally.

This is all well and good, but there is still a big problem: the tax rate on online slots is insane. At 52 percent plus another 2 percent local tax, it will keep most operators from even applying for a license. Supporters of the outrageous tax will say that brick-and-mortar casinos have their slots taxed at the same rate, so online operators should be able to handle it just fine. What they fail to mention or realize is that the land based casinos realize other revenue streams from their guests, like hotel stays, dining, and shopping. Online slots have none of that, only gaming revenue.

The tax rate set by the bill for online poker and table games is 14 percent plus the 2 percent local add-on, which is similar to what we have seen in other states that have legalized online gambling.

Casinos in the Commonwealth will have first dibs on applying for licenses. It won’t be cheap though: $10 million for the trio of slots, poker, and table games within the first 90 days of the bill becoming law and $4 million each after that period. After 120 days, operators from outside of Pennsylvania can apply for licenses at $4 million a pop.

The bill covers lots of other gambling. Online lottery sales would be authorized and special tablet gambling areas would be authorized at certain airports in the state. The bill also legalizes video gaming terminals (VGTs) – think things like video slots and video poker – at licensed truck stops. This has been the subject of heavy disagreement in the legislature, as many lawmakers don’t want gambling to spread too far outside of casinos for fear of abuse and increased competition with casinos.

The House did begin debating the bill Wednesday night, but as mentioned, no vote was taken and debate will continue Thursday morning. It is possible that a vote could happen before the lunch hour, so we’ll keep our fingers crossed that online gambling will finally be legalized in Pennsylvania this week.

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