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New Approach To Legal Online Gambling In The U.S.?

Added: May 22, 2017

As you probably know, the topic of legal online casino action is currently being hotly debated in the Pennsylvania legislature. For the record, this back and forth on both sides of the aisle are all about HB 271 that would legalize online gambling sites in Pennsylvania.

That is the background. Now for the really interesting part of this debate. None other than Pennsylvania Senator Mario Scavello let on that in his opinion HB 271 could in fact allow for entities other than existing Pennsylvania brick and mortar casinos to apply for the online gambling licenses.

Now do understand, the language allowing for non Pennsylvania entities to apply for online gambling licenses states states this is a possibility if and only if the Pennsylvania casinos do not apply for the online gambling licenses.

Naturally, that triggers the question of why would existing brick and mortar gambling sites in Pennsylvania not apply for such an online gambling license? One area of contention that is causing some hesitation on the part of the land based casinos is the proposed tax rate for online slots.

Note that HB 271 is worded such that online slots would be taxed at a rate of 54%. You should understand that is in fact the very same tax rate that brick and mortar casinos already pay for slot machine games.

All appearances suggest that this comment by Senaro Scavello seems to be a tactic to get the existing Pennsylvania gambling sites on board. Consider this: there are 12 land based casinos in Pennsylvania. HB 271 would provide for 12 online gambling site licenses. Can you see where this is going?

To better understand this, remember there are tens of millions of dollars in upfront licensing fees associated with these online gambling site licenses. Is it any wonder that the Senator is in some respects, asking (demanding?) the Pennsylvania casinos pay up or else?

Note that according to the language in HB 271, the Pennsylvania casinos have up to 120 days after the Bill is signed into law. After the 120 day mark, then the licenses would be opened up to outside entities.

Now do you understand what this is really all about? In no uncertain terms, the push for legalization of online casino seems to be more about the revenue to be gained. Not good, bad or indifferent, mind you. But now you can understand the maneuvering going back and forth in the Pennsylvania legislature.