Pennsylvania has been flirting with the idea of allowing PA online casinos for several years. There is good reason to believe 2017 is the year the state finally legalizes and regulates PA online gambling.
The outlook for PA online casinos in 2017
This year appears to offer the best chance for legal online casinos in PA.
Currently, online gambling and poker are illegal in Pennsylvania. But the state is likely to consider a gambling expansion in 2017 that would allow licensed casinos and gaming facilities to offer online casinos.
Casinos would pay a licensing fee to run PA casino websites and offer real-money casino games via apps. They would also pay a tax on all online gambling revenue. The Pennsylvania Gaming Control Board would oversee all online gambling in the state.
One PA casino — SugarHouse — already operates an online casino (SugarHouse Online) in New Jersey, which legalized and regulated online gambling several years ago.
The market potential for legal PA online casinos
Pinpointing how much money would flow through legal PA online casinos is not terribly easy. However, estimates say online gambling revenue would land somewhere between $200 and $400 million when the market matures.
The final number depends at least somewhat on the final form regulation takes for PA online casinos.
- With more available licenses, and if most land-based casinos get involved, the ceiling could end up on the high end. It appears that most of the casinos in Pennsylvania would seek to get involved in online gambling in PA, should it be authorized by the government.
- Additionally, if the tax rate is kept relatively low, it would encourage growth and innovation in the PA online gambling market, giving another boost to the possible top end for revenue.
The total current market for PA casinos — which were legalized a decade ago — eclipses $3.2 billion. So the legalization of online gambling would likely represent an increase of about 10 percent — give or take.
Pennsylvania can look to the New Jersey online casino market, which saw online gambling help Atlantic City to its best revenue numbers in 10 years in 2016, as an example of what to expect from a nearly mature iGaming environment.
The legislative background for PA online casinos
The state legislature has been taking a look at the issue of online gambling since 2013. But last year was the first time that the legislative effort gained real traction.
Online gambling was a major part of discussions regarding PA casinos throughout 2016. The House of Representatives twice passed large gambling bills that included online gambling, but the Senate refused to act on either.
At one point, the statehouse and Gov. Tom Wolf agreed to fund the 2016-2017 fiscal year budget with $100 million in revenue from gambling. Almost all of that revenue earmarked for the budget would come from online gambling. That agreement between Wolf and the legislature still has not resulted in a gambling bill being passed, however.
The state has even more reason to act on gambling issues and to consider an omnibus gambling bill (one that would include PA online gambling and also other gambling issues) in 2017. A number of issues are on the radar of lawmakers:
- The state is in the midst of a budget crisis. Revenue is well behind projections — to the tune of hundreds of millions of dollars — for the current fiscal year. Deficits could run in excess of $2 billion in future years without something being done by the government. Bringing legal online casinos to PA could help stem that deficit.
- The state government must fix a tax on casinos benefiting their host jurisdictions. A law regarding this tax was struck down as unconstitutional by the state Supreme Court in 2016. The state government has until spring to deal with the tax issue.
- Daily fantasy sports was legalized and regulated by a number of states in 2016, and Pennsylvania is likely to revisit the issue.
- Slot machines at airports and off-track betting facilities are on the table.
PA online gambling will definitely be in the mix with all of these other issues, mostly because it is the biggest possible driver of revenue out of all of them.
Pennsylvania lawmakers — especially in the House — have shown a propensity for trying to deal with a wide variety of gambling issues in one fell swoop. And it appears that will be the case when gambling bills are introduced this year.
The Senate has largely been inactive on gambling issues — online gambling, included — outside of wanting to fix the aforementioned casino tax. But both Republicans and Democrats in the Senate have indicated their desire to advance their own gambling proposals, both of which appear all but certain to include online gambling.
The House, as discussed previously, has already voted to regulate online gambling, although there are new representatives in office after the 2016 elections. Wolf is not likely to veto whatever package to bring legal online gambling to Pennsylvania comes out of the legislature.
It all adds up to a climate in which Pennsylvania online gambling appears to be a favorite to be legalized and regulated in 2017.