VGTs Stickiest Issue in Pennsylvania Gambling Bill



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Earlier this month, a gambling expansion bill which would, among other things, legalize and regulate online poker in Pennsylvania, passed a vote of the state House of Representatives. Previously, it had made it through the Senate; this would normally be great news, but the House did not approve it as is. Rather, the House made changes to the bill which makes it differ significantly from the Senate version in a couple spots. According to Online Poker Report, members of both the House and Senate have been meeting to try to find common ground and get the bill passed.

“There have been a number of meetings take place in the past several days on trying to find a solution reconciling some of the differences between the House and Senate as it relates to an overall gaming proposal moving forward to the governor’s desk,” Senate Minority Leader Jay Costa told OPR. “Those conversations continue to take place, and we’re hopeful that we’ll be able to reach consensus before we leave on June 30.”

One of gulfs that exists has to do with the tax on internet casino games. The Senate bill proposes an insane 54 percent tax on such games (poker is not included – the tax set for online poker is 16 percent), while the House bill includes a much more reasonable 16 percent. Additionally, the Senate set two separate $5 million licensing fees for online casino games and online poker, while the House’s licensing fee is $8 million for both in one, combined license.

Industry analysts believe that a 20 percent tax rate is the absolute ceiling that could be considered at all reasonable. The Senate’s tax rate and its licensing fee would likely kill the industry before it starts.

Costa told OPR that he would like to see a 25 percent tax rate, on the low end of the middle ground. He said he has gotten “pushback” on that.

While the tax rate has gotten most of the attention in online gambling circles, it is the issue of video gaming terminals (VGTs) that, according to Costa, is the more divisive issue in the Pennsylvania legislature.

VGTs are video gambling machines, things like video poker and slots. The House added a provision to the bill that would allow taverns, bars, and similar venues around the state to have VGTs that their patrons could use. The Senate, as well as casinos in the state, are against VGTs, for fear that they would take business away from casinos.

“Video gaming terminals is an issue that I think a lot of members of the Senate are not supportive of, and that has become a roadblock, quite frankly, to reaching a consensus,” Costa told OPR.

He also said he thinks that if the two chambers of the legislature can come to an agreement on VGTs, they could hammer out the other differences.

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