Notice: Trying to get property of non-object in /home/pokercom/public_html/soho-health.com/wp-content/themes/mesocolumn/lib/templates/headline.php on line 4
Notice: Trying to get property of non-object in /home/pokercom/public_html/soho-health.com/wp-content/themes/mesocolumn/lib/templates/headline.php on line 5
Archives for 2018-09-10
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.
Accusing Pennsylvania lawmakers of “apparent fiscal irresponsibility” in neglecting a lucrative revenue source, the Pennsylvania Patriot-News voiced its support of legalizing and regulating online gaming in the state. Citing the state’s looming $2 billion budget deficit, the PennLive editorial urged legislators to capitalize on the burgeoning market “because it can,” arguing the state “cannot afford to ignore a legitimate revenue source.” No law in the state currently bans online gaming, and many residents are already active on virtual tables. But until Harrisburg takes an explicitly state-sanctioned approach to the issue, the editorial said, politicians are failing to capitalize on millions in potential tax revenue. “Pennsylvania has the means, the motive, and the opportunity to pass online gaming legislation before the end of this budget cycle,” the PennLive editorial board wrote. “Online gaming is a resource Pennsylvania should mine now.” “It’s no silver bullet, but online gaming in Pennsylvania will help ease the deficit,” the editorial read. Online gambling can enhance land-based casinos in PA According to a May 2014 economic forecast prepared by the Philadelphia-based Econsult Solutions, online gaming would “most likely” complement live casino play in the state. Pennsylvania could stand to gain $68 million in direct tax revenue from the industry in its first fiscal year, the report said, and could reap over $110 million in subsequent years. Last week was marked by increased debate over online gaming in the state. Preceding the PennLive staff editorial, two op-ed articles also appeared on the site, written by influential figures on both sides of the issue. In a May 27 letter, two state representatives called for online gaming’s legalization, claiming it “makes no sense to leave online gaming unregulated.” A recent flurry of opinion on the issue The op-ed was authored by representatives John Payne and Nick Kotik, respectively the chair of the state’s Gaming Oversight Committee and the committee’s top-ranking Democrat. Payne and Kotik are the primary sponsors of HB 649, a bill to regulate and tax virtual casinos in Pennsylvania. Under HB 649, Pennsylvania would issue licenses to online casinos at a cost of $5 million, or $1 million to vendors deemed “significant” by the state. These proposed fees would be significantly higher than those of neighboring New Jersey, where Internet gaming licenses are issued at approximately $500,000 each. The representatives called regulation a “win/win” scenario, though HBN 649 has not been scheduled for a vote since its introduction in February. In opposition to online gaming, Sheldon Adelson lobbyist and former Arkansas senator Blanche Lincoln also weighed in on PennLive. In an indirect rebuttal to Payne and Kotick, Lincoln cited a Time report that the economic impact of online gaming has been “drastically, laughably overestimated.” Lincoln warned the legalization of online gaming could undermine the health of the state’s live-play establishments, which she says have performed well. “Billions of dollars have been invested in Pennsylvania’s brick-and-mortar casinos, which rival some of the best facilities in the nation,” Lincoln wrote. “Pennsylvania did casino gambling right and now the industry supports an additional 25,000 Pennsylvania jobs and generates about $3 billion annually in total economic output.” Wolf is “open” to idea of legal PA online gambling While Pennsylvania Governor Tom Wolf opposed online gambling during his 2014 campaign, the state’s harsh fiscal outlook appears to have warmed him to the possibility. Wolf also ran, more prominently, on a platform of curbing taxes in the state. With a sizable deficit approaching, online gaming may now prove a more attractive solution for the governor than a fresh round of tax hikes. Payne recently called the governor “open-minded” toward the issue, and with the state’s finalized 2016 budget due June 30, many legislators have found themselves scrambling to triage the anticipated multibillion-dollar fiscal gap.